Doing Business in Morocco
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FT SPECIAL REPORT Doing Business in Morocco Tuesday November 24 2015 www.ft.com/reports | @ftreports Inside Fledgling sector A carefully managed transition spreads its wings Growing aeronautics industry is buoyed by Peaceful evolution has has given nominally more powers to the government and parliament, which low labour costs avoided disturbances they can do a lot with if they want to use Page 2 that have afflicted the them. The King is still the supreme leader and strongest actor, but he no Catalyst for change region, says Heba Saleh longerhasalltheprerogatives.” How King Mohammed Four years after it came to office, the PJDremainspopular,eventhoughithas VI secured priority for hree large photographs of achieved little of its plans to improve renewables King Mohammed VI of conditions for the poor while enacting Page 2 Morocco stand on easels in austerity measures, most notably the the hallway outside the abolition of energy subsidies to achieve T office of Mohamed Sadiki, adeficittargetof4.3percentofGDPthis the newly elected Islamist mayor of year. The party’s success in sweeping Rabat,theMoroccancapital. local elections in Morocco’s big urban The pictures are a powerful reminder centres suggests it may be heading for of the immense influence the king another strong performance in next exerts over politics in the north African year’sparliamentary elections. Many of country, even if in recent years he has those who voted for it did so, analysts set in motion a slow evolution towards argue, not because of its Islamist cre- more representative politics to try to dentials, but because of its reputation A click from success calm popular agitation for change after for integrity in a country where people Start-ups’ biggest theArabuprisingsof2011. say they are tired of pervasive corrup- challenge is a dearth of Mr Sadiki, from the governing Party tion. of Justice and Development, PJD, is one But while King Mohammed’sreforms investors, but help is at of several Islamist mayors elected in created a more inclusive political sys- hand for entrepreneurs September to lead almost all the king- tem, the PJD is careful not to cross red Page 2 dom’s main cities, including Rabat, the lines. It poses no challenge to the role of political capital, Casablanca, the eco- the centuries-old monarchy and to the Private universities try nomic nerve centre, Tangier, Fez and king’s political and religious authority Agadir — a development that would as“CommanderoftheFaithful”. to fill the learning gap have been unthinkable a few years ago Over the years, the party has deliber- The public education when,analystssay,thestatewouldhave ately “restricted” its appetite for power, system is seen as interferedtopre-emptsuchvictories. saysMrMasbah,whonotesthathurdles resistant to reform Mr Sadiki says he is looking forward King Mohammed VI (centre), his son Prince Moulay Hassan (left), his wife Princess Lalla Salma (right) — Fadel Senna/AFP/Getty Images are periodically placed before it by to exercising extra powers that come Morocco’s “deep state” to contain its Page 4 into force at the beginning of the year areresponsibleforourdecisionsandwe Stabilityhasbeenhelpedbyaprocessof largestpartyinparliament. growth. A decision last month from the and form part of another reform — the areheldaccountable.” cautious co-operation between the “The situation is that there is a very finance ministry to bypass Mr Ben- A pragmatic approach devolution of decision-making to local Reforms initiated and controlled by monarch and the moderate Islamists of slow political reform process with posi- kirane and give control of a $5bn invest- elected councils that can now set budg- King Mohammed to defuse protests in thePJDheadedbyAbdelilahBenkirane, tive and negative fluctuations,” said ment programme to develop the coun- The Islamist prime etsandauthorisespending. the wake of revolts in Tunisia, Egypt the prime minister, who has led a coali- Mohammed Masbah, non-resident tryside to the agriculture minister, a minister is careful to “In the past, local councils voted on and Libya have allowed Morocco to tiongovernmentsinceelectionsin2011. scholar at the Carnegie Middle East member of another party close to the co-operate with the budget, but the Wali [the governor escapetheupheavalsthathavetroubled The poll came after the adoption of a Center. palace, was seen as an attempt by ruling appointed by the King] had to sign on other countries in the region, blighting constitution that requires the king to “However, the general trend is posi- circlestoclipthewingsofthePJD. the monarchy the spending,”says Mr Sadiki. “Now we economiesandevenleadingtocivilwar. choose the prime minister from the tive. For example, the new constitution Continuedonpage2 Page 5 2 ★ FINANCIALTIMES Tuesday 24 November 2015 Doing Business in Morocco Start-ups seek strength in numbers to woo funders King’s carefully Technology broadcasts health messages in doctors’ meet entrepreneurs and have all the whether the idea is good — or crap!” Council, the UK educational and cul- waitingrooms. tools I needed — mentors, networks, laughsMrSebti. turalcharity. managed A dearth of investors is the “In France, the UK and other western everything,” she says. “But here in Ms Biaz’s difficulties in setting up In three years Ms Biaz has gathered countries there is a generation of entre- Morocco in 2012 it was a desert. People NWLmirroredthosefacedbytheentre- 6,000 people at the events she has transition biggest challenge facing the preneurs, mainly in the web, who suc- barely knew what the word start-up preneurs she nurtures. With few struc- organised and is associated with some country’s nascent digital ceeded and are giving back [by invest- meant.” tures available to provide financial sup- 100 entrepreneurs. Thirty companies economy, says Siona Jenkins ing]. We don’t yet have these successful Discussions like these are part of the port to start-ups, she invested her own havebeenformedatNWL’spremises. people who have this mindset,” adds company’s mission to create a space money, calculating that it would be at As Morocco’s entrepreneurial net- Continuedfrompage1 Fleur-Eve Le Foll, whose company where entrepreneurs can share ideas least two years before she began to see a work slowly grows, NWL is making con- Like other Arab countries where On a drizzly autumn evening in Casa- Maker Mind developed Cod Cod Codet, and experiences, and meet potential return. nections further afield. Ms Biaz has her Islamists have emerged as political blanca, a group of young technology aprogrammetoteachchildrencoding. investors. Networking functions, inspi- “The period from the ‘idea’ stage to sights set on Africa’sthriving tech scene forces, there is considerable polarisa- entrepreneurs debate the challenges of Moderating the discussion is the actually making your first sales is very, andisplanningaworkshopcalled“Hello tion in Morocco between secular seg- building a business in Morocco. Seated evening’s host, Fatim-Zahra Biaz, an verylong—longerthaninEuropeorthe Africa” before the end of the year. “We ments in society,often urban elites, and around a ping-pong table in a cheery energetic 33-year-old many credit with US,”shesays. tendtolookwestandwe’veforgottenthe the more conservative and religiously- third-floor apartment they are, by their helping to nurture the entrepreneur- ‘In Morocco in 2012 it was a She has the support of companies and challenges we have are here [in Africa] minded. The difference, however, is the own admission, pioneers in the coun- ship scene in Morocco’sbusiness capital desert. People barely knew organisationsthat“understandtheben- andourmarketishere,”shesays. PJD avoided pushing a religious agenda try’snascentstart-upscene. through her start-up New Work Lab. efit” of a thriving start-up network, and She is also trying to encourage female or raising controversial issues such as Betweensipsofmintteathegrouphas Part co-working space for entrepre- what start-up meant’ that are keen to foster the country’sdig- entrepreneurs and this year launched the application of Islamic sharia law, alivelydiscussiontouchingonthereluc- neurs, part collaboration hub and part italeconomy. the Moroccan chapter of Girls in Tech, a whichwouldhavefuelleddivision. tance of local backers to invest in entre- entrepreneurship champion, the com- rational talks and events such as pitch- These include telecoms operator start-up support group founded in Cali- “We consider sharia to be much preneurship and the need for more panyprovidesafocusforlocalstart-ups. ing competitions, where entrepreneurs Inwi, and the OCP Foundation, the phil- fornia. She now offers training and broader than what others think,” says institutionalsupport—aproblemacross A Casablanca native who worked in try out their funding pitches on each anthropic arm of Moroccan phosphates workshopstohelpdeveloptheirskills. Saad Dine Elotmani, a PJD leader who the region, where entrepreneurs strug- Franceasamanagementconsultant,Ms other,helpstart-upshonetheirskills. giant OCP, which is one of the country’s “This is the right time to be in the served as foreign minister in Mr gletofindfinancing. Biaz says she came up with the idea for “We’dneverheardofstandinginfront most active funders of start-up initia- start-up business in Morocco,” says Mr Benkirane’s first government (before “We can count on two hands the NWL after noticing there were almost ofagroupofstrangersandpitchingyour tives. Sebti,whocreditsNWLwithgalvanising the withdrawal of one ruling party number of people who want to invest nosupportsystemsforentrepreneursin