Morocco eyes Gulf investment to offset slowdown

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Morocco, facing slower growth and effects of the economic crisis in European partners, aims to attract investments from the oil-rich monarchies of the Gulf which King Mohammed VI has toured.

The North African nation is accustomed to growth rates of between four and five percent, but will have to make do with a figure of three percent for 2012, according to official forecasts.

The budget deficit reached over six percent of GDP in 2011, against a backdrop of 30 percent youth unemployment in a country where an Islamist parliamentary election win amid Arab Spring-related upheaval in the region has raised fresh hopes of change.

In search of new partnerships, Mohammed has completed a week-long tour of Gulf and Arab monarchies, visiting Jordan, Saudi Arabia, Qatar, the United Arab Emirates and Kuwait.

The tour amounted to “the opening of a new chapter in historic and strategic relations between Morocco and these countries,” Les Echos newspaper said in a column on the “diplomatic offensive.”

Trade and investment with the region has “lost steam,” said Khadija Mohsen-Finan, a French university professor and Maghreb specialist.

Official figures showed that none of the Gulf and Arab countries were among the kingdom's top 10 trading partners in 2010 except for Saudi Arabia, in fifth place with $2.1 billion of investment.

In mid-2011, the six-nation GCC invited Morocco and Jordan, the two non-Gulf monarchies in the Arab world, to join the club, closed to outsiders since its creation in 1981.

The move, seen as an attempt to protect themselves both from the spread of Arab Spring revolts in countries throughout the region and from arch-foe Iran, was welcomed by Rabat.

But Morocco carefully reiterated its “natural and irreversible commitment” to building the Arab Maghreb Union (AMU), formed to strengthen economic cooperation between several North African and Sahel countries.

Under the new rapprochement with the GCC, a strategic partnership was signed to finance development projects in Morocco worth more than $5 billion over five years.

Mohammed’s tour allowed for an assessment of “Morocco’s audience in these countries” where investors “currently possess the greatest potential direct foreign investment in the world,” Les Echos said.

Director of UAE holdings company Al-Maabar, Yusef al-Nuwais, said “renewable energy, tourism, industry and real estate” were the most promising areas of potential investment, according to Moroccan news agency MAP.

Al-Maabar is already a major developer of the Bouregreg valley in the Rabat-Sale region, a project worth seven billion dirhams ($815 million) that is now being finalized.

Tourism agreements signed with Gulf countries have amounted to 49 billion dirhams ($5.7 billion) over 10 years.

While Europe remains the principal source of tourists, Tourism Minister Lahcen Haddad said in an interview with CNN that the kingdom’s focus now is on “emerging markets” including the Gulf.