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Morocco
The Development Challenge: Morocco is a middle-income country with the human and social development levels of a low-income country. Per capita income is nearly $1,200, while social indicators rank among the lowest in the region. Approximately 48% of adults aged 15 and above were illiterate in 2000, placing Morocco 20th among the 22 Arab League countries (surpassing only Mauritania and Yemen). Women are particularly affected, with a female illiteracy rate of 62%, and higher in rural areas.
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Despite macroeconomic stability, the hopes of large segments of the population striving for better living conditions remain unmet. Job creation has not kept pace with rapid growth in the labor force. While there have been some improvements since 2001, nearly 20% of the urban labor force was unemployed in 2002. Progress made in the early 1990s in poverty alleviation has been lost, and approximately 19% of the total population remains below the absolute poverty line (about one dollar per day). Two-thirds of the poor live in rural areas (3.5 million, or more than 10% of the population). Moreover, about 55% of the rural population and 33% of the urban population were considered "economically vulnerable" in 2003.
Rural poverty is the result of adverse climatic conditions, primarily an increase in the frequency of droughts over the past 35 years. Rural poverty is further aggravated by government policies that prevent rapid modernization of the rural economy, diversification out of cereal production, and efficient use of scarce water resources. Migration from rural to urban areas further exacerbates urban problems.
In 2003, with the appointment of a new government headed by a business-oriented, non-partisan prime minister, the economic reform agenda began to move. Under the new government, adoption of long-needed reforms, such as the labor code and the insurance code, has begun.
Politically, Morocco is being transformed from a highly centralized government to a system that promotes stability through democratization, local participation and decentralization. King Mohammed VI and his advisors recognize the clear message that came out of the most recent elections: political reforms must be accelerated and deepened. Morocco requires a more flexible, competitive, and transparent political order that creates tangible improvements in people's lives, and yet at the same time does not provide an opportunity for extremists to destabilize the country. The September 2003 municipal elections, coming one year after the first fair and transparent elections of parliamentary representatives, confirmed the engagement of the government in the democratization process. Moreover, Morocco is on the eve of a major change in gender relations with the coming declaration of a new family code (moudawana), which will put Morocco in the vanguard of Arab countries in terms of women's legal rights.
The U.S. Government's highest economic priority in Morocco is the negotiation, conclusion, and implementation of the U.S.-Morocco Free Trade Agreement (FTA). The FTA offers an opportunity to accelerate the major economic reforms and restructuring that will attract investment, open global markets, and create jobs. Besides promoting broader economic development in the context of the FTA, the United States will also support programs in basic education and democratization. President Bush's specific references to Morocco in his May 9, 2003 speech underscore the importance and visibility of these initiatives for Morocco.
The USAID Program: The goal of USAID's strategy for Morocco is to support the overarching U.S. foreign policy interests in Morocco: promoting regional stability, economic development, and democratic values and combating international terrorism.
USAID activities support the Government of Morocco's goal of providing jobs, opportunities, and political stability through the promotion of free trade, education and workforce development and a government that responds to the needs of the people.
Other Program Elements: USAID manages a number of activities funded by the Middle East Partnership Initiative (MEPI), including:
- a girls' scholarship program that provides safe housing for rural girls to attend middle school;
- training for local political parties and newly elected parliamentary members;
- technical assistance to improve women's legal rights;
- a women's literacy program;
- work with civil society;
- microcredit programs for small businesses; and
- activities to help Morocco negotiate and implement a free trade agreement with the U.S.
Other Donors: General trends in official development assistance (ODA) show a decrease in assistance levels since the early 1990s. After a peak at about $1.2 billion in 1992, net ODA disbursements decreased progressively to approximately $336 million in 2002. With disbursements of about $302 million over the 2000-2002 period, France maintained a leading position, far ahead of Germany ($65 million), Spain ($38 million) and the United States ($33 million).
Bilateral donor assistance focuses on infrastructure development, distribution and management of water resources, and workforce training. Loans provided by the European Union (largest multilateral donor over the 2000-2002 period) and the World Bank are dominated by large policy reform programs in multiple sectors, including public administration, housing, water and sanitation, transportation, health, education, financial and legal sectors. The multilateral donors also provide resources for developing the private sector and strengthening the workforce.
USAID's activities will focus on critical areas, consistent with the Government of Morocco's priorities, which either complement or are not addressed by other donors and in which USAID has an established comparative advantage.
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