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FY14-17 Country Partnership Strategy

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FY14-17 Country Partnership Strategy Document of The World Bank FOR OFFICIAL USE ONLY Report No. 86518-MA INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL FINANCE CORPORATION MULTILATERAL INVESTMENT GUARANTEE AGENCY COUNTRY PARTNERSHIP STRATEGY (CPS) FOR THE KINGDOM OF MOROCCO FOR THE PERIOD FY2014-2017 April 1, 2014 Maghreb Country Department, World Bank Middle East and North Africa Region International Finance Corporation Middle East and North Africa Region Multilateral Investment Guarantee Agency Middle East and North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency unit: Moroccan Dirham (MAD) as of March 1, 2014 US$1 = MAD 8.13705 MOROCCO FISCAL YEAR WORLD BANK GROUP FISCAL YEAR January 1 – December 31 July 1 – June 30 List of Abbreviations and Acronyms AAA Analytical and advisory activities AFD Agence Française de Développement (French Development Agency) AfDB African Development Bank AMC Asset Management Company AMDL Moroccan Agency for the Development of Logistics ANAPEC Agence Nationale de Promotion de l’Emploi et des Compétences (National employment and skills promotion agency) ASIMA Social and Integrated Agriculture BAM Bank Al Maghrib - Central Bank BCP Banque Centrale Populaire BPO Business Process Outsourcing CEM Country Economic Memorandum CNEA National Business Environment Committee CSP Concentrated Solar Power CPSCR CPS Completion Report CTF Clean Technology Fund DTF Deauville MENA Transition Fund DPL Development Policy Lending ESCP Economic Competitiveness Support Program ESW Economic and Sector Work EU European Union FDI Foreign direct investment GCC Gulf Cooperation Council GDP Gross Domestic Product GEF Global Environment Fund GIZC Integrated Management of Coastal Zones GoM Government of Morocco GPSA Global Partnership for Social Accountability HCP Haut Commissariat Au Plan HMIS Health Management Information System ICT Information and Communication Technology IDF Institutional Development Fund IGF Inspection Générale des Finances IGG Inclusive Green Growth IMA Moroccan Institute of Directors INDH Initiative Nationale de Développement Humain (National Initiative for Human Development) MDG Millennium Development Goals MDTF Multidonor Trust Fund ii MENA Middle East and North Africa MSME Micro, Small, and Medium Enterprises MTEF Medium-term expenditure framework NCD Non-communicable Diseases NHSFO Non-honoring of sovereign financial obligations NHFO-SOE Non-honoring of financial obligations of state-owned enterprises ONEE Office National de l’Eau et de l’Electricité (National Office for Water and Electricity) ORDAR Offices régionaux de développement agricole et rural PACT Local Government Support Program PAGER National program promoting potable water supply to rural populations P-ESW Programmatic economic and sector work PERG National program for universal rural electrification PforR Program for Results PICCPMV Integrating Climate Change in the Implementation of the PMV PJD Parti pour le Développement et la Justice (Development and Justice Party) PMV Plan Maroc Vert PNEI National Pact for Industrial Emergence PNEEI National Program of Energy Efficiency in the Industry PNRR Programme National de Routes Rurales (National Rural Roads Program) PPP Public-Private Partnerships RAMED Non-contributory Health Insurance Program SEDP Skills and Employment DPL SME Small and Medium Enterprise SOE State Owned Enterprise SWM Solid Waste Management TA Technical Assistance TFP Total Factor Productivity UNICOP Union Nationale des Industries de la Conserve de Poisson WSS Water supply and sanitation iii IBRD IFC MIGA Vice President Inger Andersen Dimitris Tsitsiragos Michel Wormser Country Director Simon Gray Mouayed Makhlouf Ravi Vish Country Joumana Cobein Representative Task Team Leader Michael Hamaide Serena Cavicchi Persephone Economou Acknowledgement This Country Partnership Strategy (CPS) was prepared under the guidance of Simon Gray, World Bank Country Director, and Joumana Cobein, IFC Principal Country Officer. The World Bank team was led by Michael Hamaide, Task Team Leader and Senior Country Officer for Morocco. The IFC team was led by Serena Cavicchi, Co-Task Team Leader and Strategy Officer. MIGA participation was led by Persephone Economou. The CPS Core Team included: Bachir Abdaym, Ibtissam Alaoui, Aurelien Antoine Claude Boyer, Kamel Braham, Joelle Businger, Jean-Pierre Chauffour, Philippe De Meneval, Hind Kadiri, Andrea Liverani and Fabien Seiderer. The following WBG Morocco Country Team members and colleagues have also made important contributions to this strategy: Teymour Abdel Aziz, Richard Abdulnour, Randa Akeel, Diego Angel-Urdinola, Axel E. N. Baeumler, Amine Benjelloun, Zineb Benkirane, Fadwa Bennani, Maha Bensaid, Fatiha Bouamoud, Sanaa Bouchikhi, François Boulanger, Xavier Chauvot de Beauchêne, Dalila Bouna, Lida Bteddini, Roger Coma Cunill, Soumia Driouch, Alejandra Eguiluz, Aziza El Aouad, Khalid El Massnaoui, Khadija Faridi, Nawal Filali, Jaafar Friaa, Catherine Gozard, Fabrice Houdart, Gabriella Izzi, Hind Kadiri, Abdoulaye Keita, Gloria La Cava, Candice Le Tourneur, Song Li, Daniela Marotta, Mohamed Medouar, Samia Melhem, Fanny Missfeldt- Ringius, Sameh I. Mobarek, Laila Moudden, Ziad Nakat, Silvia Pariente-David, Nadine Poupart, Patricia Ravelomanantsoa, Achraf Rissafi, Paul Scott Prettitore, Khadija Sebbata, Gabriel Sensenbrenner, Sylvia Solf, Kathleen So Ting Fong, Manaf Touati, Paolo Verme, and Vincent Vesin. Special thanks are extended to Ina-Marlene Ruthenberg and Jean-Luc Bernasconi, who peer reviewed the document; to Victoria Gyllerup, for her invaluable guidance on results; to Amanda Van Kirk, for her always constructive support and substantial contribution to the CPS CR, to all the counterparts of the Government of Morocco, and to Minister Mohammed Louafa and his team at the Ministry of General Affairs and Governance in particular; to the many actors of Morocco’s civil society met during the consultations, for sharing their genuine views and expectations; and to colleagues from partner donor agencies in Morocco. iv COUNTRY PARTNERSHIP STRATEGY (CPS) FY14-17 FOR THE KINGDOM OF MOROCCO TABLE OF CONTENTS EXECUTIVE SUMMARY I. INTRODUCTION .......................................................................................................... 1 II. COUNTRY CONTEXT.................................................................................................. 1 Political Context.................................................................................................................................. 1 Social Context and Poverty Profile ..................................................................................................... 2 Economic Developments and Prospects ............................................................................................. 4 Key Development Challenges ............................................................................................................. 7 Government Priorities and Medium-Term Strategy ......................................................................... 13 III. BANK GROUP PARTNERSHIP STRATEGY ........................................................... 15 III.1. Lessons Learned from previous CPS and Stakeholder Feedback ............................................ 15 III.1.A. Lessons from CPS Progress & Completion Report ......................................................... 15 III.1.B. Client Feedback and Stakeholder Consultations .............................................................. 17 III.2. Proposed World Bank Group Partnership Strategy ................................................................. 18 III.2.A. World Bank Group Partnership Strategy Overview ......................................................... 18 III.2.B. Expected Results and Program of Lending and Non-Lending Activities......................... 19 III.3. Implementing the FY14-17 Country Partnership Strategy ...................................................... 30 III.3.A. Managing the Program ..................................................................................................... 30 III.3.B. Portfolio and Pipeline Management ................................................................................. 33 III.3.C. Partnerships and Donor Coordination .............................................................................. 34 IV. MANAGING RISKS .................................................................................................... 34 v CPS ANNEXES Country Specific Annexes: Annex 1: Morocco CPS Program Selectivity Annex 2: Morocco CPS Results Framework (FY14-17) Annex 3: Morocco CPS FY14-17 Completion Report Annex 4: Morocco Detailed Macroeconomic Overview Standard CPS Annexes: Annex A: Morocco at Glance Annex B2: Selected Indicators of Bank Portfolio Performance and Management Annex B3: IBRD Program Summary - Proposed IBRD Base-Case Lending Program Annex B3: IFC Investment Operations Program Annex B4: Summary of Non-lending Services Annex B5: Morocco Social Indicators Annex B6: Key Economic Indicators Annex B7: Key Exposure Indicators Annex B8: IBRD Operations Portfolio Annex B9: Statement of IFC’s Committed and Outstanding Portfolio vi EXECUTIVE SUMMARY i. Amidst the historic and tumultuous changes that have marked the Region in recent years, Morocco has embarked on a promising and peaceful political and social
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