King Salman of Saudi Arabia has a preferred vacation site – Tangier, Morocco. At the end of July he landed at the local airport, was received with pomp by the prime minister, settled into his 74-acre estate and housed his entourage in the city’s most expensive hotels.
Over 1,000 people including ministers, advisers, relatives, security people and associates landed with Salman. About 800 hotel rooms were reserved, 200 cars were leased (in addition to the vehicles the king brought with him) and the finest catering companies were brought on board. The month-long vacation is expected to cost more than $100 million.
That’s apparently the most expensive “all-inclusive package” ever. You probably shouldn’t plan a trip to Tangier this month, especially if you plan to go around by car.
But not only the Saudi king enjoys himself in Tangier; the Moroccan Finance Ministry and local industries including the hotel and tourism sectors are also bullish. Salman’s vacation is expected to account for 1.5 percent of the country’s revenue from foreign tourism this year, which is estimated at $6.5 billion.
In fact, tourism and remittances by Moroccan workers abroad are responsible for 12.5 percent of the country’s gross domestic product. Only the phosphates industry does better, at 18 percent.
This year, the government signed agreements with the Chinese and Russian tourism ministries to add new sources of tourists. According to the Tourism Ministry, credit-card spending by Chinese tourists has surged around 10-fold. Meanwhile, since June, about 2 million Moroccan expatriates have arrived in the country as part of Operation Marhaba, designed to get Moroccan expats to vacation in their homeland.
Another reason for the tourism bonanza is that Morocco isn’t suffering terror attacks like its neighbor Tunisia, though over the past year the government reported the discovery of 18 terror cells. About 1,500 Moroccans are thought to have joined the Islamic State.
Morocco’s economy is flourishing after last year’s drought that stung agricultural production and exports, which constitute 15 percent of GDP. In the World Bank’s most recent report on Morocco, the country was praised for its economic policy, which includes subsidy reform, new legislation to encourage foreign investment, and the accelerated development of industry. This particularly covers sectors that require advanced technology such as the manufacture of spare parts for the European aeronautics industry.
Last year’s weak economic growth of 1.5 percent is expected to climb to 3.8 percent this year or even top 4.5 percent, analysts say. Morocco’s budget deficit is a modest 3.9 percent, which is planned at 3 percent for next year if the forces of nature don’t interfere.
Growth should be helped by the new car factories to be built by European companies (their names have yet to be released). These firms will join the large Renault plant and the planned Peugeot-Citroen plant.
Morocco aspires to become Africa’s largest car manufacturer in Africa – a title now held by South Africa. Morocco makes about 40 percent of the spare parts used in its manufacture of cars, a number it expects top 65 percent in 2020. That of course could reduce the country’s high unemployment rate – Morocco’s Achilles’ heel.
The country has had problems reducing unemployment, currently at 9.3 percent, or 23.5 percent for people between 15 and 24, and 17 percent for people with diplomas. It’s true that many of the unemployed generate income by working as peddlers, taxi drivers or unregistered temporary workers, but those aren’t the kind of jobs that tamp down the frustration that morphs into anger and political protest.
For example, demonstrations in Al Hoceima in the north erupted last fall when a fishmonger was crushed inside a garbage truck, trying to save his goods from the work of government inspectors. The protest spread to other cities, but Morocco has been spared the revolutions of the Arab Spring, in part due to the generous assistance of the Gulf countries, mainly Saudi Arabia and Qatar.
Still, these grants, which have steadily shrunk, couldn’t bridge the gaps between the small wealthy class and the majority of workers, who earn on average 400 euros a month. These gaps are the tinder from which protests and revolutions explode, so they require an economic policy taking into consideration that over 60 percent of Moroccans live in large cities. The country needs to invest in the outlying areas, especial where the Berbers are a majority, such as the Rif region and the Grand Atlas Mountains.
Eighteen years after becoming king, Mohammed VI is impressing with his administrative skills, and his popularity is stable despite his use of the many powers the constitution grants him. The question is whether he can balance the economic pressures in a way that neutralizes the threat of political shocks.
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