MoroccoMorocco OrientalOriental RegionRegion An Investment Guide to the Oriental Region of Morocco Opportunities and Conditions 2012 United Nations UNITED NATIONS I AN INVESTMENT GUIDE TO THE ORIENTAL REGION OF MOROCCO Opportunities and Conditions 2012 UNITED NATIONS New York and Geneva, 2012 II UNCTAD The United Nations Conference on Trade and Development (UNCTAD) was established in 1964 as a per- manent intergovernmental body. Its main goals are to maximize the trade, investment and development opportunities of developing countries, to help them meet the challenges arising from globalization, and to help them integrate into the global economy on an equitable basis. UNCTAD's membership comprises 193 States. Its secretariat is located in Geneva, Switzerland, and forms part of the United Nations Secretariat. ICC The International Chamber of Commerce (ICC) is the world business organization. It is the only body that speaks with authority on behalf of enterprises from all sectors in every part of the world, grouping toge- ther thousands of members, companies and associations from 130 countries. ICC promotes an open trade and investment system and the market economy in the context of sustainable growth and deve- lopment. It makes rules that govern the conduct of business across borders. Within a year of the creation of the United Nations it was granted consultative status at the highest level (category A) with the United Nations Economic and Social Council. This is now known as General Category consultative status. Notes The term 'country' as used in this study also refers, as appropriate, to territories or areas; the designa- tions employed and the presentation of the material do not imply the expression of any opinion what- soever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. In addition, the designations of country groups are intended solely for statistical or analytical convenience and do not necessarily express a judgement about the stage of development reached by a particular country or area in the development process. Note The Kingdom of Morocco adopted a new constitution by referendum on 1 July 2011. As this institutional reform occurred after the publication of 'An Investment Guide to the Oriental Region of Morocco', the changes introduced by the new provisions are not reflected in the text of this publication. It is therefore necessary to take into account the important institutional changes that the Constitution provides for, among other things, the new distribution of powers, strengthening decentralization, judicial reform, and the recognition of Amazigh as an official language of Morocco alongside Arabic UNCTAD/DIAE/PCB/2010/10 An Investment Guide to the Oriental Region of Morocco © United Nations, 2012 All rights reserved. III Three good reasons to invest in the Oriental Region • A wealth of natural resources The Oriental Region has considerable and diverse agricultural resources with crop types which vary according to the different provinces and the prevalent climatic conditions. Although some crops are well- adapted to the climatic situation in the southern part of the region (including the cultivation of dates in Figuig), the best conditions are to be found in the north, particularly in the fertile Moulouya basin. The region is very attractive for domestic and international tourism, because of its wide range of places of interest and different landscapes. Possibilities abound in terms of coastal tourism, particularly at the new Mediterranean resort of Saidia, but also cultural tourism and ecotourism (the Marchica lagoon, and desert oases of Figuig, the heritage of Oujda and the major cities, the Beni Snassen mountains, hot springs, etc.). The Oriental Region's natural assets also provide opportunities in other sectors: the significant amount of annual sunshine makes the region, especially in the south, particularly well-suited to solar energy pro- duction projects, which are currently enjoying a boom. Finally, its mineral-rich sub-soils are proving attrac- tive for mining projects. • A well-positioned, thriving region The Oriental Region's geographical location is advantageous for access to foreign markets. The region shares its eastern border with Algeria, making it the Moroccan region closest to the other Maghreb countries, although it is somewhat remote from the most populated and economically active areas in Morocco. Investors could really profit from this location if the land border with Algeria is re-opened. Its Mediterranean coastline and the development of the Port of Nador also make a credible alternative to the port of Tangier for access to European markets and the Mediterranean basin. Furthermore, develop- ment of road infrastructure linking the East to the rest of Morocco (particularly to Fez and Tangier) will mean that the region is less isolated in the future. Moreover, the investors met by the UNCTAD team described a thriving region, with great potential and competitive manpower costs. They welcomed the efforts made by the government to develop infrastruc- ture, with the creation of business parks and new tourism projects. They also praised the security, macro- economic stability and friendliness of the region. In addition, the Oriental Region is economically close to its diaspora, an essential source of foreign capital, which regional governments are aiming to channel particularly into the productive sectors. • Proactive public authorities The Oriental Region is benefiting from Morocco's current boom and the major macroeconomic reforms that have been undertaken at national level since the 1980s. These reforms have helped keep inflation low in spite of higher raw material prices, maintain a current account surplus and increase the flow of foreign direct investment into the country. The region also benefits from Morocco's very open economy, characterized by significant trade with the European Union and many free trade agreements. Finally, cen- tral government has implemented an economic development strategy based on support for a number of strategic sectors. These efforts primarily target sectors with high added value (new technologies, renew- able energy) and are being implemented in major national investment schemes in business zones and transport and communication infrastructure. Since the launch of the Royal Initiative for the Development of the Oriental Region in 2003, the regional authorities have been particularly active in improving the region's accessibility with respect to other economic areas in Morocco and internationally. There has been significant ongoing investment in trans- port infrastructure, including the current construction of a second port at Nador, a new terminal at IV Oujda-Angad airport, an extension of the highway between Fez and Oujda and the Mediterranean bypass between Tangier and Saidia. New business centres are also being developed (industrial parks in Oujda and Selouane, the agri-food technology zone in the province of Berkane) and there are large-scale sectoral projects, such as those undertaken in the resort of Saidia or the concentrated solar power plant at Ain Beni Mathar. The region has also benefited from a significant development of its human capital with the expansion of Mohammed I University and improved vocational training opportunities. V Preface It is widely acknowledged that foreign direct investment makes an important contribution to growth and development. It tends to bring capital, technology, organisational know-how and access to new markets. It is also more stable and is underpinned by a longer-term commitment to the host country than other types of capital flows. The current Investment Guide to the Oriental Region of Morocco is the concrete product of a collaborati- ve venture by the United Nations Conference on Trade and Development (UNCTAD) and the International Chamber of Commerce (ICC) The aim is to bring together two types of groups whose interests are com- plementary: companies seeking new investment opportunities and countries or regions looking for new investors. This is not always a straightforward exercise, as companies follow their global strategies as much as lured by specific opportunities, whereas countries have economic and social objectives that go beyond attrac- ting foreign investment. The UNCTAD-ICC Investment Guides are thus properly seen as parts of a long-term process at the heart of which is an ongoing dialogue between investors and governments. The guides themselves are the product of a dialogue, including that occurring among and between the representatives of business and government during the workshops that precede the completion of the guides. It is our hope that the guides will in turn contribute to the dialogue, helping to strengthen and sustain it. We are convinced that in the long run it is this alone that will create conditions increasingly conducive to greater flows of invest- ment, which can impact the development of countries and the well-being of their populations. Supachai Panitchpakdi Jean-Guy Carrier Secretary-General Secretary-General UNCTAD ICC VI Acknowledgements This Investment Guide to the Oriental Region of Morocco was produced by UNCTAD's Division on Investment and Enterprise at the request of the Government of Morocco. It is based for the most part on information gathered during a study visit undertaken in March and April 2010 by an UNCTAD