How is Morocco shedding away foreign Investments

As I landed a couple fo hours ago in Casablanca coming from Dubai, I couldn't help but have some reflexions on the horrid customer service provided in the Moroccan airport. Coming across an exasperated businessman from Bangladesh, I realized that such lack of consideration for the customer is not only a failure to comply with the rules of decency every airport ought to implement, but also a grave attack on potential foreign investments that are a crucial component for recovery in the current shaky economic conditions...

How is Morocco shedding away foreign Investments

In these times of financial and economic uncertainties, the world is striving to power boost growth and encourage investments in order to cut loose the ongoing nightmares of the ailing banking system and its repercussions on the world finance. Yet, as these efforts to encourage a quick recovery are spreading, and indeed populating most of world leaders speeches and TV apparitions, one country is lacking behind: Morocco.

Although most observers might claim otherwise, Morocco’s approach and methodology in restructuring its economy and lifting the purchase power of its citizen is all but comprehensive and sound. The gross mistake the Moroccan authorities have been conducting throughout the years, and more acutely now, is that the government tries to induce a top down growth through encouraging multibillion dollars investments instead of building a strong investment base powered by the middle class and small businesses. The last visit of the king to the Gulf countries, a recurrent theatrical play where the monarchy squeezes billions of dollars from the Gulf royalties whenever the domestic economics are not adding up, is an astounding example of such state practice of top down investment. Channeling investments and projects by Gulf corporations to Morocco might be of short-term benefits since it creates direct jobs in construction or tourism; yet, most of these foreign ventures end up frozen due to the absence of consumers of such products, and deficiency of completive small businesses that can create the necessary environment for a full investment to operate. What I mean by completive small businesses are those enterprises that offer services and products that a Hotel cannot offer, as simple as that. Luxurious resorts and Hotels are a product locals cannot afford, a fact not hard to miss on since the market these investments target are foreign. This poses the question: will a businessman, celebrities or high-income consumers visit Morocco on the sole basis of staying in a luxurious hotel? What draws outsiders are unique travel experiences that are prosperous for them to initiate potential ventures, that is to say a compelling cultural setting, the existence of advantageous telecommunication services and infrastructure, the flourishing of small businesses that offer skilled technicians and resources and the presence of quality transportation firms. Thus begging for Gulf investments without laying the foundations for these very ventures to thrive is pouring water on the sand. A state that cannot cope with rainfalls, rising criminality, poor consumer purchase power, degrading middle class and fiscal irregularities and fraud is far from succeeding in getting the economic house back in order through a couple of foreign investors.

Another flaw in Moroccan approach to economic growth is the discrepancy in treatments offered to foreign investors. While western investors are treated with the greatest forms of respect and privilege, Asian entrepreneurs are disregarded as casual travelers who have to pass through the hardships and tortuous airline and airports process, a process that the Moroccan airports made the worst possible in any sovereign nation. Lost luggage, hours in line for the passport checks, empty cubicles meant to be filed by airport officers and no regards for customer service… many of the realities of Moroccan airports that would push away any investor from thinking about traveling to Morocco. These are the basic services that a state should prioritize if it seriously considers drawing foreign cash to the mainland.

Successful investment strategies are those that care about the small businesses, encourage entrepreneurship and facilitate foreign knowledge and expertise flow to the domestic market. If a nation cannot offer decent treatment for travelers and outsiders going through its airport –travelers who after all are walking wallets that can be tapped into -, then there is no premise for talking about economic recovery through foreign investments. It is saddening to see on one hand great nations deploy resources, efforts and time to empower small businesses as the ultimate path to recovery, and on the other hand witnessing one’s country waste money in lobbying and embassy held dinners to attract investments that will not impact the domestic economic landscape, because the state didn’t care enough to build a favorable base for these investments to flourish upon. The true change starts from within, not through aesthetic appliances to hide inherent flaws in the domestic scene, thus if Morocco is to ever join in the global effort to regenerate wealth and growth, it should start by permitting small businesses -domestic and foreign- to prosper, not by helping them financially, but simply through fulfilling the tasks every state is elected to accomplish in the first place.

Mohamed Amine Belarbi

International Affairs on the Edge Magazine

Finally our Magazine is out! This 1st publication compiles recent articles by Mohamed Amine Belarbi on various topics, ranging from A potential war on Iran to US Foreign Policy.

Open publication - Free publishing

Post-revolutionary Egypt: What’s next? Part 2

Never too late: industrialization, services and technology

Egypt, since the major period of industrialization under the Nasser administration, fell back on the international arena to a mere import oriented economy relying for its most on foreign production to fulfill its market’s needs. Nowadays, after a toppled regime and a genuine declared war against corruption and centralization, the Egyptian economy is ready to engage once more in the competitive sector of major industries spanning from the petrochemical sector to the production and assembly of automobiles and military weapons. The educational system in Egypt is one which is acknowledged for its quality and excellence, a success mostly witnessed through top class intellectuals and engineers whom Egypt exports throughout the world.

One would doubt the necessity and indeed the potential attributes of an imminent industrialization in Egypt, especially in a world which industrial wheel has been rotating since the 19^th century, but the current situation in the Middle East and especially the Gulf attests of a different reality.

Acetex, Corporation has entered a newly formed joint venture to build a US 1 Billion $ plant in Jubail Industrial City in Saudi Arabia[1], and this comes after Qatar built the biggest gas-to-liquid plant at the grand pleasure of the Qatari Emir. The region is witnessing a fervent ascension to major industrialization, and it is a favorable time for Egypt to enroll in such efforts.

Whether through implementing gas and petroleum refinery plants in joint ventures with the gulf countries as did Tunisia along Qatar in a 2 Billion 2$ Investment[2] (Especially that the oil and gas fields in Egypt are poorly exploited through an old and inefficient exploitation and delivery infrastructure), or be it through the privatization of the state owned plants in order to reform and improve the soviet dated firms and production lines to the requirements of the 21^st century.

Another aspect of the Egyptian economy is its large agricultural activities which account for 13.5% of the GDP. Looking back at the wealthy fields across the Nile strikes the viewer immediately: the scene never exceeds the view of poor installations, few human resources and archaic tools of production. Nations with far smaller land mass whose workforce in the agricultural sector is dwarfed by that of Egypt still manages to have a colossal input in the world market. What is needed is indeed a reform and improvement of the mean of productions in Egypt, a qualification of the workforce and the introduction of technology, genetic selection and mass production in the agricultural fields. This will boost not only the productivity, but will as well expand the usable land mass in the vast desertic fields as what is been done in Saudi Arabia and co.

Egypt is rich in resources, and the abundant oil, gas, iron, manganese, limestone or phosphates are here to further confirm it. The human resources to exploit these natural riches are as well in excess, so what is needed is a true political willingness to advance the economic competitively of Egypt instead of using induces poverty and illiteracy as political tools to enslave the people as has been done during the Mubarak Era.

Furthermore, the prospects of monetary rehabilitation are appealing, and the necessity for Egypt to uphold thus far a diplomatic and strategic foreign policy supportive of the US is more than encouraged in order to secure the American Billions of dollars’ worth of aid. This, coupled with an up to market prices trade with Israel over the oil exports would enrich the state monetary reserves of another dozen of billions $. Finally, the alignment of Egypt with the West and the gulf countries in their effort to ignite a war against Iran will inevitably poor on the Egyptian reserves juicy banknotes issued by the petro-dollar rich and grateful gulf nations  for the Egyptian efforts to sustain “peace and stability” to the region.

An enhanced industrialization, a fierce war on corruption and a rehabilitation of the monetary system and relief of the aggregating debts is to engage Egypt in the path of economic competitiveness and major industrial production, a deeply needed pathway where the economic survival of the nation ultimately rests.

To be Continued...

Next: Political Reforms

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[1] http://www.siteselection.com/ssinsider/snapshot/sf040419.htm

[2] http://af.reuters.com/article/investingNews/idAFJOE84E09Z20120515

The New Gulf Vision for International Education

An NYUAD future undergrad insight 

On the request of a friend, I'll be writing this post on a subject loosely related to politics, specifically on the New York University of Abu Dhabi, with a modest approach to the Gulf politics, just so to keep the writing line of the blog present...

It is quite unique to observe a new trend in Education, sourcing in the Gulf countries, namely Qatar and the UAE... students around the world have noticed the fierce advertising of a new "kind" of Universities who, strange enough, bear US brands while being located in the middle of the oily arabian deserts.
Quite an explosive cocktail one would say, especially that the Middle East was never recognized for being the harbor of US Universities with great caliber. (Some even still think of the Middle East as an empty desert populated by bedouins...)

After the invasion with tanks, Fighter jets and ground troops, the Arabian peninsula is now living the era of intellectual incursion, and incursion one would argue which benefits the locals more than it offers a fruitful ground for brainwashing and Westrn conditionning for propsective Arab leaders.

As I am heading to the New York University of Abu Dhabi to be part of the 2016 class, I believe an insight on the new educational fashion promoted by the wealthy Emirates from my part would be highly appreciated, as some of my countreparts evoked.

The first impression that most of us would have is the stereotype of the wealthy fat sheiks and how a University planted in the Gulf would ultimately enjoy the many financial benefits of the area...and indeed it turns out to be true!
The logistics, infrastructure and budget of the US Universities out there, or at leat the ones I know (NYUAD and Georgetown University in Qatar) are virtually limitless! Ranging from Luxurious dorms to 3D TVs, passing by scholarship packages which include countless benefits and Filipino servants clearing your plates, this new Gulf/US branded universities have the primary weapon to drag the brightest students who are more than willing to study for free and get pocket money over it.

Another prominent feature of these Gulf branches of imminent US Universities is the outstanding faculty they manage to gather in their campus corridors. Draging top professors from Yale, Harvard, Oxford and numerous prestigious institutions, the head hunters don't go easy in selecting a stunning panel of teachers to make the University stand out internationnally, with of course fat paycheques being thrown left and right.
More impressive, the University I am attending in a couple of months welcomes the NYU president John Sexton bi-weekly so that he can teach his famous course (Government and Religion) to both the NYUAD students and an Emirati selected group, raising concerns about the costs of such journeys without mentionning the fury it starts among the environementalists who would get pissed off when it comes to the presidents' carbon footprint...

From personal experience, I can totally confirm the luxury these Universities afford to their students, especially after a journey I undertook to Abu Dhabi as part of a candidate weekend (part of the selection process).
Bringing 70 students from around the world to the UAE and bearing all the costs of travel, stay in a luxury hotel with on the top fancy activities in the desert and in the 7 stars hotel Emirates Palace(fancy dinner in Emirates Palace. pic down), this is what one would call hardcore advertisement!

And indeed it is one of the most powerful tools to expand the influence of the University, making the students go crazy over how fancy the trip to AD was and spread the word about the institution among their fellow coyears...(Bear in mind that not all the students got admitted at the end, though they were brought from the end of the globe to take part in sample courses and undertake a campus tour among others...)

It is indeed impressive that the Arab Gulf countries are heading in this new educational road where new perspectives and revolutionary vision are being drawn alongside the tall skycrapers which burst in the deserts of Arabia!
John Sexton  didn't spare words when describing the vision he sees taking place in NYUAD, a vision which reflected the eagerness of the UAE to take over the global leadership in the domains of Education, Business and Technology.

The UAE is a country which is still building and shaping itself, and the efforts of nation-building undergone in the oil rich emirates are to be met with an equivalent effort by the international community in order to foster peace and prosperity in times where wars are waged, ignorance is spread and hunger is a valuable currency in world marketing.

Coupled with the limitless financial capabilities made possible by the oil revenues, the new world vision taking place in the Gulf is to be taken on serious grounds, especially that the economic uncertainties in the West and the shifting of geopolitical centers to the East makes the emergence of centers of power in the Gulf a certain outcome. A clear display of such ground breaking changes is the shining of the star of Qatar in the last Arab Uprising where the tiny country unblocked huge funding ans tactical moves which threw it on the front line of those benefiting from the advantages of regime removals.

From organized protests in Qatari studios to political and logistical support to rebels, without forgetting the highly trained media staff which organized the unfolding of the revolutions in Aljazeera corridors, Qatar has shown that the determination of the Gulf countries to enclench its fist and grab the torch of leadership is not an ephemer fantasy, but a true vision for a New World Order where the rules of the global gameplay are drawn differently.

Heavy International investments are no more than a small fraction of what the Gulf has to offer, yet, the era of subordination and passive politics is now gone. Turning from the receiver to the active player, the Sheiks of Arabia have learned the lesson and are ready to make drastic changes (relatively ;) in order to channel the power of oil into palpable holdings in politics, business and education.

The conventional is not welcome in the Gulf of the 21st century, and so is the idea behind hosting US campuses while boosting their capabilities to make them outsmart their mother institutions back home. Give them money, give them logistics, give them buildings, internships, stunning faculty, countless research opportunities, study abroad programs, trips, conferences, evenings with top world personalities, luxury in its most mindblowing forms, and collect the results!

It is still an experimental process which found many supporters and critics, yet the fact that there is a genuine willingness to move the Gulf forward and make it a new hub for intellectual, political and economic leaps brings hope and faith in the Middle East as a whole, especially that it doesn't lack capabilities to bring real change to the ground, provided the West allows such re-emergence and sees it as a collaborative advance rather than a potential threat to the US and EU predominance in the global scene.

Mohamed Amine Belarbi