Talk to JETRO First OVERVIEW OF MOROCCO 2018, November Japan External Trade Organization (JETRO) Daisuke Mizuno 0 Copyright©2018 JETRO All right reserved. 禁無断転載 CONTENTS Keywords to understand Morocco Strategic positioning of Morocco Moroccan trade relations ◆ Morocco basic information ◆ Language / cultural affinity ◆ FTA exceeding 50 countries, future ◆ Four points to understand Morocco ◆ Regional hub expansion ◆ Effect of FTA (export) Economic scale and growth rate of Morocco Japanese companies entering Morocco ◆ Effect of FTA (Import) ◆ Morocco: Steady economic management ◆ around 50 companies already present ◆ The impact of the agricultural sector ◆ Morocco largest foreign employer Business challenges in Morocco ◆ Bilateral agreement (investment, tax) ◆ Language wall Investment environment in Morocco ◆ Expatriate daily life infrastructure Morocco security, business environment ◆ Comparison of countries (wages, site fee, rent) ◆ Safety information ◆ Comparison of countries (public utilities, ◆ Terrorist related information transportation costs) ◆ Business environment evaluation ◆ Comparison of countries (corporate tax, income ◆ Foreign capital inflow trend tax, various taxes) Morocco's trade trend Business environment in Morocco ◆ Major trading partners ◆ Major export free zone in Morocco ◆ Major trade items ◆ Tanger Free Zone (TFZ) ◆ Casablanca Finance City (CFC) ◆ Kenitra Free Zone (AFZ) ◆ Casablanca Free Zone (MIDPARC) 1 Copyright©2018 JETRO All right reserved. 禁無断転載 Key points to better understand Morocco ① Civil affairs and society Stability ② Strong security system ① Constitutional ③ long-term thinking for Policies and monarchy businesses ④ Political democratization after the Arab Spring ① Omnidirectional diplomacy ② Balanced ② Share same religion and business Diplomacy and Africa- languages as West Africa Oriented ③ King's religious authority ④ Return to the AU (From Jan 2017) ③ Successful of Population 34,85 Million Person （2017） industrial promotion ① Export industry: automotive, aircraft etc. 446 000 Km2 (about 1.2 times the size of Japan) ② Development of power plants (renewable, Surface 2 and infrastructure (Around 710 000 Km with the Sahara) LNG, etc.) using PPP GDP 103,6 Billion USD (2016 nominal value) development GDP growth rate 4.5% (2015) 1.1% (2016) 4.2% (2017) GDP per capita 3,173 dollar (2017 nominal value) official language: Arabic, Berber Language ① Necessity of stabilization of agriculture Everyday/Business Language: French ④ Modernization of sector Japanese residents 372 people (as of October 2016) agricultural sector ② Investment in the fishery industry 1 US Dollar (USD) = 9.81 Dirham (MAD) Exchange rate (aquaculture industry, coastal fishery etc.) (2016 average rate) Source: Morocco Higher Planning Commission, Morocco central bank, IMF, Japanese Ministry of Foreign Affairs 2 Copyright©2018 JETRO All right reserved. 禁無断転載 Economic scale and growth rate of Morocco (1) ~ Steady economic management ~ Morocco’s turbulence of economic growth is influenced by the agriculture and fishery industry (①), which is originally a growth potential of 4% (②) 180.0 7.6 8.0 ② 160.0 ① 7.0 6.0 5.9 140.0 5.2 6.0 120.0 4.8 4.5 4.6 4.4 4.5 4.5 5.0 4.2 4.2 4.1 100.0 3.5 3.8 4 3.3 4.0 3.0 167.8 80.0 3.1 157.1 2.7 147.1 137.7 3.0 60.0 1.2 121.0 129 101.4 106.8 110.1 101.2 109.8 92.5 92.9 93.2 98.3 2.0 40.0 79.0 62.3 68.6 52.1 59.6 103.6 20.0 1.0 0.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 名目NominalGDP（10億米ドル） GDP 実質GDPReal成長率 GDP (US $ 1 billion) growth rate Items 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Nominal GDP (US $ 1 billion) 52.1 59.6 62.3 68.6 79.0 92.5 92.9 93.2 101.4 98.3 106.8 110.1 101.2 103.6 109.8 121.0 129.0 137.8 147.1 157.2 167.9 Real GDP growth rate 6.0 4.8 3.3 7.6 3.5 5.9 4.2 3.8 5.2 3.0 4.5 2.7 4.6 1.2 4.2 3.1 4.0 4.2 4.5 4.6 4.6 Source: IMF, World Economic Outlook Database, 2018 3 Copyright©2018 JETRO All right reserved. 禁無断転載 Economic scale and growth rate in Morocco (2) - The impact of agriculture sector - （③） GDP Growth and agricultural production (Morocco) 7.0 30.0 23.9 25.0 Morocco GDP growth rate and agricultural growth rate 6.0 5.9 5.2 17.8 20.0 are linked （ ③ ） 5.0 11.6 15.0 18.6 3.8 10.0 4.0 3.5 4.2 3.0 4.5 -2.3 4.5 5.0 The share of Morocco primary industry (including 6.7 3.0 - 1.1 -5.0 fishery) as a percentage of GDP has been higher than -11.3 2.0 Real GDP 2.7 -10.0 実質growthGDP成長率 rate -7.8 -15.0 in neighboring countries (④), and the impact on the 1.0 1.2 Agricultural production -20.0 -20.0 農業生産成長率（実質値） country's economy is said to be high. - growth rate (real value) -25.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 （④） Industrial composition of 3 Maghreb countries (relative to GDP) Year 2006 Year 2016 120.0 15.1 16.0 120.0 16.0 13.6 14.0 13.3 14.0 100.0 100.0 12.0 51.1 56.8 64.2 12.0 80.0 31.8 10.2 80.0 10.0 10.0 10.0 3次産業Tertiary industry 57.0 60.8 60.0 8.0 8.0 60.0 8.0 2次産業Secondary Industry 6.0 6.0 1次産業Primary industry 40.0 40.0 36.1 60.5 29.5 農業比率Agriculture ratio 27.9 4.0 4.0 29.2 26.0 20.0 20.0 2.0 2.0 15.1 10.0 12.7 13.6 0.0 7.7 0.0 0.0 9.8 0.0 アルジェリアAlgeria Moroccoモロッコ チュニジアTunisia アルジェリアAlgeria Moroccoモロッコ チュニジアTunisia Source: UNCTAD statistics (Maghreb 3 domestic industry composition), World Bank statistics (Morocco economic growth · agricultural growth) 4 Copyright©2018 JETRO All right reserved. 禁無断転載 Morocco security and business environment, influx of foreign capital -comparison with Algeria and Tunisia - Morocco has lower risk of terrorism than Japan （⑤） Safety information of Maghreb countries FY 2017 FY 2017 MOFA of Japan Global terrorism index/GTI World peace index/GPI Overseas Safety Information <Rank by Country> <Rank by Country> 0.077 2.004 Morocco Overall land：Level１ <123/134> <75/163> 3.97 2.201 ○ Algiers, Oran prefecture: Level 1 ○ Maghreb Algeria Near the border and the southern desert region etc.: Level 3/Level 4 <49/134> <109/163> ○ Other areas : Level 2 countires 4.619 1.977 ○ A part of the southern desert zone including the border zone of Tunisia Algeria and Libya and Kaslyn province: Level 3 <41/134> <69/163> ○ Other areas: Level 2 5.964 1.839 France － <23/134> <51/163> Europe 5.102 1.786 UK － USA <35/134> <41/163> 5.429 2.232 USA － <32/134> <114/163> 5.543 2.242 China ○ Xinjian Uighur autonomous region, Tibet autonomous region: Level 1 Asian <31/134> <116/163> coountries 3.595 1.408 Japan － <58/134> <10/163> ⑤ ※For detail, refer to “MOFA Overseas Safety Homepage” The degree of risk is valuated from 0 The degree of peace is evaluated in (low) to 10 (high); The higher the “Level 1”: Please be careful enough Remarks 5 grades, and the number is terrorist risk, the higher the numerical “Level 2”: Stop traveling nonessential and nonurgent smaller for peaceful countries. value is. “Level 3”: Recommendation to Stop traveling “Level 4”: Evacuation recommendation Source: Institute for Economics and Peace (IEP), Ministry of Foreign Affairs of Japan 5 Copyright©2018 JETRO All right reserved. 禁無断転載 Morocco's Trade Trend (1) ~ Major Trade Partners ~ ⑥ ⑥ ⑦ ⑧ ⑧ Spain and France are Morocco's biggest trading partners. Lately, trades with Spain have been further strengthened with the development of domestic manufacturing industries like automotive（⑦） As domestic consumption markets expand, imports of Chinese products are increasing（ ⑧ ） Within the Islamic market area, Trade with Turkey has developed steadily thanks to FTA （ ⑨ ） 6 Copyright©2018 JETRO All right reserved. 禁無断転載 Morocco's Trade Trend (2) ~ Major Trade Items ~ ⑨ ⑩ ⑪ Exports of automobile related items (finished cars / automobile parts) grew to be the country's largest export items beyond phosphorus products (ore, acid, fertilizer)（⑨） Agriculture and fishery products are leading Morocco export items（⑩） The decline in crude oil prices contributes to a decrease in total imports Prices (decrease of the commercial deficit). However, the Moroccan importations still depends on fossil resources（⑪） 7 Copyright©2018 JETRO All right reserved. 禁無断転載 Morocco's Strategic Positioning (1) ~ Language, cultural affinity ~ Half of the African countries belong to the "French-speaking world" or "Islamic market" (A), the King of Morocco has religious authority in West African countries and actively promotes African diplomacy (culture, religion, business) (B) Since January 2017, Morocco returned to the AU (African Union) as a member. A B Moroccan Muslims area companies French-speaking area. in Africa Created by JETRO based on materials such as AMDI’s 8 Copyright©2018 JETRO All right reserved. 禁無断転載 Morocco's Strategic Positioning (2) ~ Regional Hub ~ Kenya Ｃａｉｒｏ Airways EgyptAir Ｃａｓａｂｌａｎｃａ Ｎａｉｒｏｂｉ Royal Air Maroc South African Airways Created based on flight information of Ｊｏｈａｎｎｅｓｂｕｒｇ airlines companies. 9 Copyright©2018 JETRO All right reserved. 禁無断転載 Morocco's Strategic Positioning (3) ~ Morocco as the Regional Hub ~ Royal Morocco Airways cover 31 city in 29 countries out of 54 African countries with direct flights Among these, the Moroccan’s doesn’t need an entry visa for 14 countries out of 29 countries.