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Morocco's HDI Rose from 0.4 to 0.65, an Increase of 60 Percent and an Average Annual Increase of 1.3 Percent

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Morocco's HDI Rose from 0.4 to 0.65, an Increase of 60 Percent and an Average Annual Increase of 1.3 Percent Public Disclosure Authorized KINGDOM OF MOROCCO GOVERNING TOWARDS EFFICIENCY, EQUITY, Public Disclosure Authorized EDUCATION AND ENDURANCE A Systematic Country Diagnostic June 2018 Public Disclosure Authorized Public Disclosure Authorized Contents Abstract .......................................................................................................................................... vi Acknowledgements ........................................................................................................................ vii Abbreviations ................................................................................................................................. ix Executive Summary .......................................................................................................................... x Morocco’s poverty and shared prosperity outcomes .........................................................................1 1.1. Successes in reducing poverty and promoting shared prosperity ............................................................. 1 1.1.1 Elimination of extreme poverty and poverty reduction ................................................................... 1 1.1.2 Increased shared prosperity ............................................................................................................. 4 1.1.3 Other improvements in social and human development indicators ................................................ 7 1.2. Factors behind poverty reduction and improvements in social indicators ............................................... 8 1.2.1. Morocco’s pro-poor growth performance ........................................................................................ 8 1.2.2. Investment in education, health and other social services ............................................................. 10 1.3. Challenges to further reduce poverty and boost shared prosperity ....................................................... 16 1.3.1. Reducing inequalities ...................................................................................................................... 16 1.3.2. Attenuating the sentiment of poverty ............................................................................................ 22 1.3.3. Meeting the aspirational gap .......................................................................................................... 24 1.3.4. Growing the middle class ................................................................................................................ 26 The sustainability of Morocco’s economic and social achievements ................................................. 28 2.1. Economic Sustainability ........................................................................................................................... 28 2.2. Financial sustainability ............................................................................................................................. 33 2.3. Infrastructure service delivery sustainability........................................................................................... 35 2.4. Territorial sustainability ........................................................................................................................... 39 2.5. Climate Change and Environmental Sustainability .................................................................................. 45 2.6. Social sustainability ................................................................................................................................. 49 Factors constraining Morocco’s fastest inclusive sustainable development ...................................... 53 3.1. More inclusive market institutions .......................................................................................................... 54 3.1.1. For the business environment ........................................................................................................ 54 3.1.2. For SMEs and entrepreneurship ..................................................................................................... 63 3.1.3. For labor market inclusion .............................................................................................................. 64 3.1.4. For competitiveness and diversification ......................................................................................... 70 3.2. More inclusive public governance ........................................................................................................... 77 3.2.1. In elaborating and implementing the rule of law ........................................................................... 77 3.2.2. In administrating the state .............................................................................................................. 80 3.2.3. In delivering public services ............................................................................................................ 82 3.3. More inclusive human capital formation ................................................................................................ 85 i 3.3.1. Via education .................................................................................................................................. 85 3.3.2. Via healthcare ................................................................................................................................. 88 3.3.3. Via early childhood development ................................................................................................... 91 3.4. More inclusive social capital .................................................................................................................... 92 3.4.1. For women: the agency factor ........................................................................................................ 93 3.4.2. For all citizens: the trust factor ....................................................................................................... 94 Priority pathways to sustained inclusive development .................................................................... 98 4.1. Pathway 1: Getting closer to the efficiency frontier ............................................................................. 103 4.1.1. Through competition and innovation ........................................................................................... 103 4.1.2. Through favorable business conditions and improved access to finance ..................................... 104 4.1.3. Through improved public policy formulation and coordination ................................................... 105 4.1.4. Through access to quality public services ..................................................................................... 106 4.2. Pathway 2: Leveraging the efficiency frontier ....................................................................................... 109 4.2.1. Through labor market reforms ..................................................................................................... 109 4.2.2. Through targeted social protection programs .............................................................................. 110 4.2.3. Gender Mainstreaming ................................................................................................................. 111 4.3. Pathway 3: Pushing the efficiency frontier ............................................................................................ 112 4.3.1. Via early childhood development ................................................................................................. 112 4.3.2. Through quality of education ........................................................................................................ 113 4.3.3. Through urban and territorial development ................................................................................. 115 4.4. Pathway 4: Greening the efficiency frontier.......................................................................................... 116 4.4.1. Through integrated climate adaptation and water management ................................................ 116 4.5. Governance as the overarching cross-cutting pathway ........................................................................ 118 4.5.1. Through access to information and accountability ....................................................................... 119 4.5.2. Through voice, participation and engagement ............................................................................. 120 4.5.3. Through rule of law and justice..................................................................................................... 121 Conclusion ................................................................................................................................... 123 In-depth research ......................................................................................................................... 124 Annex 1. Data diagnostics ............................................................................................................ 125 References ................................................................................................................................... 128 ii Boxes Box ES.1 Key findings of the Commission on Growth and Development ......................................................... xiv Box ES.2 Promoting youth opportunities and participation in Morocco ........................................................
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