NATIONAL INTELLIGENCE SURVEY 48; MOROCCO; THE ECONOMY

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• Collection: NIS
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CONFIDENTIAL
48 /GS /E
Morocco
March 1973
NATIONAL INTELLIGENCE SURVEY
CONFIDENTIAL
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C/1" 14. 0 cco
CONTENTS
This General Surrey supersedes the one dated Jan-
uary 1969, copies of which should be destroyed.
A. Economic appraisal 1
GDP and sectoral distribution; assessment of re-
source endowment and economic methods; rea-
sons for fluctuations in growth rate.
B. Sectors of the economy
1. Agriculture, fisheries, and forestry
a. Agriculture
Characteristics of traditional and modern
sectors; land use and irrigation statistics;
principal crops.
(1) Domestically consumed crops
Cereals, sugar beets, olives, the nar-
cotic kif.
(2) Export crops
Citrus and fresh vegetables; role of
OCE; declining exports of wine and
cotton.
(3) Livestock
Statistics on products and herds.
CONFIDENTIAL
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(4 Development
8
(3) Metal working
16
Government investment, planning,
Traditional sector; products of mod-
and services; irrigation projects, land
ern shops.
tenure, and the Agricultural Invest-
(4) Chemicals
17
ment Code.
Production of Safi complex and ma-
b. Forestry
9
terials used.
Products, ownership and imports.
(5) Automobile assembly
17
e. Fisheries
10
Arrangements with foreign com-
Type and quantity of catch; threats to
panics, plants. and production.
development of the industry.
b. Construction
17
r 2.
Fuels and power
10
Factors behind expansion; materials n r
a. Petroleum
10
duced and imported.
Declining
g production, refinery output, dis-
5 Domestic trade
17
tribution, and natural gas deposits and
Small shops as basic outlets; restrictions on
utilization.
foreign ownership; efforts to establish _-nop-
b Coal
11
eratives.
Output and government subsidization.
C. Economic policy and development
18
c. Electric power
11
1 Policy and tannin
y P g
18
Production and consumption hizures,
Growth of government involvement; "Moro-
transmission system, role of ONE, au l
canization" efforts; aims and provisions of
reliance on hydroelectric powe
economic plans; private investment �its en-
3. Metals and minerals
12
couragement and concentration in housing,
:mporUnce of industry, factors affecting
manufacturing, and tourism; assessment of
profits, and extent of government participa-
19 i1 reforms.
lion.
2. Government finances
20
a. Phosphates
13
Divisions of bud get composite statistics
World ranking in production and exports;
1965 -70, breakdown of revenues and expendi-
efforts to meet competition; processing
tunes, and financing of deficit.
facilities.
3. Money and banking
21
b. Iron and steel
14
Numbers and types of financial institutions,
Output and mines; Gara Djebilet deposits
money supply, consumer price index, cur-
and agreement with Algeria on joint ex-
rency, and exchange rate.
loitation� scra
p p proce::,in t plant; steel
4. Man power
P
22
production plans.
Distribution of labor force by branch of
c. Lead and zinc
14
economy; unemployment and efforts to alle-
Drops in production; exports; processing.
viate it� worker emigration and the Promo
t {on Nationale program.
d. Other minerals
14
Output of manganese, copper, cobalt,
D. International economic relations
23
and rock salt; minerals mined on small
1. Foreig rade
23
scale.
Composition of exports and imports; shift in
4. Manufacturing and construction
14
direction of trade, 1960 and 1971; effect of
Handicrafts and the modern sector; growth
ECC agreement.
and underutilization of capacity.
2. Balance of payments
25
a. Manufacturing
14
Statistics 1960 -70; extent of reliance on for
(1) Food processing
15
eign assistance; sources and amount of aid.
Flour and vegetable oil; advantages
3. Regulations on trade and payments
26
and drawbacks in sugar processing;
Lists established by the General Import Pro
importance of canning industry.
gram and procedures for foreign exchange
transfers.
(2) Textiles
18
Products and inputs; tariff protection.
Glossary
28
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FIGURES
iii
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Page
Page
Fig. 1
Gross domestic product chart)
1
Fig.
13
Phosphate mine photo)
13
Fig. 2
Economic activity map)
2
Fig.
14
Furniture weaving photo)
1.5
Fig. 3
Traditional agriculture phoos)
4
Fig.
15
Index of industrial production
Fig. 4
Land use (chart)
5
(table)
16
Fig. 5
Major agricultural products table)
5
Fig,
16
Grain market photo)
18
Fig. 6
Livestock products table)
7
Fig.
17
Composite government budget
Fig. 7
14zrd size table)
7
table)
21
Fig. 8
Irrigation facilities (photos)
8
Fig.
18
Labor force (chart)
22
Fig. 9
Commercial fish catch table)
10
Fig.
19
Exports table)
24
Fig. 10
Fig. 11
Fishing fleet photo)
Energy sources table)
10
11
Fig.
20
Imports (table)
24
Fig. 12
Mineral production and exports
Fig.
21
Direction of trade chart)
25
table)
12
Fig.
22
Balance of payments table)
26
iii
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The Economy
A. Economic appraisal (LT /OU)
The Moroccan economy has grown at only a
moderate rate and has changed little in structure since
1960. Output expanded at an average annual rate of
4% during 1961-71, or about Igo faster than
population. Investment was distributed among sectors
approximately in proportion to their contribution to
GDP, and during the period most major sectors
expanded at about the same rate (Figure I The most
notable growth occurred in light manufacturing
(especially fertilizers and automobile assembly), in
sugar beet cultivation, and in tourism.
Government investment provides much of the
impetus for growth. It averages about 40% of total
investment, and much of the other investment, both
1960 1970
Agriculture
Energy 2 7.
Mining
Manufacturing
Construction and Public
Works
Commerce
Transportation and Other
Services
Government Salaries
USS1.8 Billion US$ 2.7 Billion
(Constont 1966 prices)
FIGURE 1. Gross domestic product (U /OU)
public and private, is made in response to it.
Economic growth in a given year, however, depends
heavily on the vagaries of weather and resulting
fluctuations in agricultural outl Agriculture
enploys almost 70% of the labor force, supplies some
50% of exports, and contributes 30% of G131'. Because
it provides raw materials for manufacturing industries
and because farm income is an important determinant
of consurner demand, agriculture strong!y influences
overall economic activity. The remaining (;I)p is
divided among manufacturing (12 mining, energy,
construction, and public works (13% transportation
and other services (W('A comtnerce (19 and
government salaries (105,
The resource endowment is mediocre in most
respects. Morocco has it relatively large amount of
arable land (Figure 2) and several perennial streams
suitable for irrigation use. however, much of the
agricultural land is of marginal quality because of
erratic rainfall and lack of irrigation facilities in man%
areas. Moroccan phosphate deposits and the
phosphate mining operation are among the worlds
largest, but known reserves of other minerals are small.
The sunny beaches and xotic historical cities lure
visitors, but tourism is not yet fully developed.
Although modern economic methods are slowly
encroaching upon traditional techniques, the latter
still predominate. Large modern farms produce citrus;
i.nd fresh vegetables for export and supply much of the
wheat, sugar, and vegetables consumed in urban
centers. Yet they vast hulk of the rural population
continues to live near the subsistence level as farmers
of tiny, relatively unproductive plots or as nomadic
raisers of livestock. Artisan techniques are employed to
mill flour in the rural areas and to manufacture large
amounts of handicraft items, mainly in the native
quarters of Fes,' Meknes and Marrakech.
The modern economy, est..lished by the French,
encompasses most industrial production and
commercial agriculture. Since: independence, the
principal manufacturing industries �food processing,
'For diacritics on place names, see the list of names at the end of
the chapter and the map in the text.
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1007.

FIGURE 2. Economic activity (U /OU)
textiles, and metal processing �have been expanded
moderately, and other light industries, including
automobile assembly and fertilizer manufacture, have
been introduced. These manufacturing industries
supply most local consumer demand but are generally
unable to compete in export markets.
Moroccan goods worth the equivalent of US$500
million annually, or about 20% of GDP, are now
exported. Virtually all mining and most commercial
agricultural production is oriented toward foreign
markets; almost all heavy equipment is imported. A
significant part of the staple food supply, especially
wheat, sugar, and vegetable oil, also must be
purchased abroad. Tourist earnings run approximately
$80 million, and the persistent unemployment
problem is mitigated by migration to Western Europe
of workers who remit a portion of their wages to
families still in Morocco. Despite tourist receipts and
workers' remittances, Morocco remains heavily
dependent on other nations to finance much of its
food and capital goods imports. Most foreign aid is
obtained from Western nations, particularly France
2
and the United States. Morocco also accepts assistance
from the Soviet Union and Eastern European states
but has been careful to limit its dependence on them.
The economy has experienced a number of ups and
do%vns since Morocco won its independence in 1956.
The outflow of European sealers and capital following
independence depressed economic activity. Private
investment was at a low level, and government
development efforts had not gotten under way.
Moreover, with the departure of man\ Europeans,
domestic demand for locally manufactured goods fell
sharply. Meanwhile, many French farmers fearful of
nationalization allowed their holdings to deteriorate.
During the early 1960's, the government sharply
increased expenditures in an effort to stimulate
economic activity. Although it 3.7 5'c average annual
growth was achieved during 1960 -64, the rise in
government expenditures eventually caused inflation
and balance of payments problems. Growing demand
initially was satisfied largely by increased utilization
of capacity. Ho public investment, concen-
trated in projects with relatively long gestation
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Tulle
n tonen
elil4
F
epa
Kenitra 0 e�e Fig
ABA
boa
Pb
AGRICULTURE
FUELS
Sati
Q F.incipal agricultural bnd
livestock C Coal
Ph
Ksar as
area (cereals, citrus, olives, grapes,
sheep and goats) Oilfield
Irrigated areas Petroleum
refinery
beM
vk
J
0
MINING
INDUSTRY
Fe Iron
O Industrial center
1/
Pb Lead and zinc
Fish processing center
Z
Ph Phosphate
It Tourist center
Q Chemical complex
I
501W 1.73
FIGURE 2. Economic activity (U /OU)
textiles, and metal processing �have been expanded
moderately, and other light industries, including
automobile assembly and fertilizer manufacture, have
been introduced. These manufacturing industries
supply most local consumer demand but are generally
unable to compete in export markets.
Moroccan goods worth the equivalent of US$500
million annually, or about 20% of GDP, are now
exported. Virtually all mining and most commercial
agricultural production is oriented toward foreign
markets; almost all heavy equipment is imported. A
significant part of the staple food supply, especially
wheat, sugar, and vegetable oil, also must be
purchased abroad. Tourist earnings run approximately
$80 million, and the persistent unemployment
problem is mitigated by migration to Western Europe
of workers who remit a portion of their wages to
families still in Morocco. Despite tourist receipts and
workers' remittances, Morocco remains heavily
dependent on other nations to finance much of its
food and capital goods imports. Most foreign aid is
obtained from Western nations, particularly France
2
and the United States. Morocco also accepts assistance
from the Soviet Union and Eastern European states
but has been careful to limit its dependence on them.
The economy has experienced a number of ups and
do%vns since Morocco won its independence in 1956.
The outflow of European sealers and capital following
independence depressed economic activity. Private
investment was at a low level, and government
development efforts had not gotten under way.
Moreover, with the departure of man\ Europeans,
domestic demand for locally manufactured goods fell
sharply. Meanwhile, many French farmers fearful of
nationalization allowed their holdings to deteriorate.
During the early 1960's, the government sharply
increased expenditures in an effort to stimulate
economic activity. Although it 3.7 5'c average annual
growth was achieved during 1960 -64, the rise in
government expenditures eventually caused inflation
and balance of payments problems. Growing demand
initially was satisfied largely by increased utilization
of capacity. Ho public investment, concen-
trated in projects with relatively long gestation
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periods, increased productive capacity little, and by
the end of 1963 full use of capacity was approached.
Central bank financing of sizable government deficits
caused rapidly rising money supply; demand
increased substantially; and inflation ensued. As a
result, imports climbed, and the consequent balance
of payments deficits were financed by reserve
drawdowns. tsy the end of 1964, foreign exchange
reserves had reached US$12 million, barely enough to
cover a month's imports.
During 1965 -67, government efforts to relieve
inflationary pressures plus 2 successive vears of
drought slowed economic growth considerably. Under
a plan designed with the assistance of the
International Bank for Reconstruction and Develop-
ment (IBRD) and the International Monetary Fund
(IMF), the government imposed foreign exchange
controls and import restrictions in 1965, sought more
foreign aid, and curbed its spending. Inflation
consequently slowed, the budget deficit shrank, and a
balance of payments surplus was realized. Ilowever,
urban unemployment increased, private investment
slackened, and idle manufacturing capacity rose.
During 1966 and 1967, drought caused a slump in
domestic consumer demand and restricted supplies of
industrial inputs, reinforcing the depressing effects of
1965's anti inflationary, policies. Consequently, GDP
grew only 2.5% per annum during 1965 -67, while
sharply increased wheat imports and lowered
agricultural exports caused balance of payments
deficits.
Conscious of past mistakes, the government recently
has pursued stimulating but still relatively conserva-
tive economic policies. Central government invest-
ment has increased substantially since 1967, raising
total investment from 13.9% of GDP in 1967 to 15.5%
of GDP in 1970. At the same time, higher tax rates,
more efficient collection of tax arrears, and slow
expansion of ordinary expenditures have created a
growing .ordinary budget surplus, reduced overall
budget deficits, and allowed inflation to be contained.
Private investment has been encouraged by more
efficient processing of requests for project approval
and by the extension of incentives under the industrial
investment code to more industries. Good weather and
increased investment contributed to a 5.8% average
annual increase in GDP during 1968 -71.
Although recent economic developments have been
favorable, several basic difficulties persist. Heavy
dependence on rainfed agriculture has not been
alleviated. Despite heavy investment in irrigation
facilities during the 1960's, the percent of irrigated
land increased only from somewhat less than 8% of
cultivated land in 1964 to about 8.5% in 1970. Many
of the dams and irrigation facilities begun during the
1960's have not been completed, and numer.,us
problems have impeded use of those finished. Until
1968, perpetual administrative changes delayed
progress at all levels. With a high proportion of
agricultural land watered by rainfall, recurring
droughts cause a 109 to 30 0 /ic reduction in agricultural
output. Drought effects are carried over to subsequent
years because future: production is usually mortgaged
to finance the required increase in food imports.
The rate of population growth is very high, causing
most output expansion to be absorbed in maintaining
existing living standards. Although Moroccan officials
have paid lip service to population control, only token
efforts have been made to limit population growth.
The 1968 -72 Five Year Development Plan allocated
only about $600,000 per annum to finance a family
planning progrsm, and only about 30% of the funds
allocated for 1968 -70 was actually spent. Meanwhile,
the birth rate has risen, the death rate fallen, and the
rate of population increase has accelerated from 2.5%
in the late 1950's to at least 2.9
Income distribution remains highly skewed, with
les than 10 0 of the people reportedly receiving more
than half the income and most Moroccans survivin4 at
the subsistence level. Most state investment in
agriculture has benefited the relatively modern and
wealthy farmers rather than the majority of rural poor.
Because of their lack of marketable skills, rural
migrations to the cities enlarge the ranks of the poor,
often unemployed, slum dwellers. From 1960 to 1970,
urban unemployment rose from 20 'i to 30 The
predominantly urban middle class seems to be doing
little more than holding its own. Private sector wages
in the cit; s actually have lagged somewhat behind
increases in the cost of living. Promotions and job
reclassification in the public sector, however, have
caused those salaries to rise faster than living costs.
Meanwhile, the very small upper class elite enjoys a
luxurious standard of living. Overall, as Hassan li
stated in August 1971, it is clear that "while the poor
have not been enriched, the rich have increased their
fortunes."
B. Sectors of the economy
1. Agriculture, fisheries, ar.d forestry (C)
a. Agriculture
Agricultural activity remains the dominant force in
the Moroccan economy. It account, for 30% of GDP
directly and largely determines the level of overall
1:I
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Terracing procedures are used to grow crops in mountainous
regions (U /OU)
FIGURE 3. Traditional methods are still used by about
three fourths of Morocco's farmers
economic activity. Employing almost 70% of the labor
force, agricultural production is a major determinant
of consumer demand. About 50% of all exports and
most inputs to Morocco's large food processing
industry originate in the agricultural sector.
Moroccan agriculture comprises a large "traditional
sector" and a small, more productive "modern
sector." The traditional sector consists of nomadic and
seminomadic herders and small subsistence farmers. It
embraces most of the arat)le land and employs about
three fourths of the rural population. However, much
of the land is of marginal quality, little of it is
irrigated, and cultivation methods are primitive
(Figure 3). Consequently, yields are low and the
traditional sector's contribution to output is
disproportiou,itely small. Although some output is
marketed, most of it is consumed on the farm.
Modern agricultural activity is located on the Rharb
plain, in the Sebou basin area, and in scattered areas
along the coast. It consists mainly of lands confiscated
by the government or sold by Europeans to Moroccans
after independence, plus some farms still owned by
Europeans. The modern sector encompasses approx-
4
imately 2.5 million acres of the. best land, about
600,000 acres of which are owned by European
farmers, and it makes up about SO% of monetized
agriculture in the country. It employs only about one
fourth of the rural population but provides nearly all
agricultural exports. The modern sector maintains
close ties with the banking sector, and production is
geared to domestic urban and foreign export markets.
Although Morocco is better endowed with usable
agricultural land than the rest of the Maghreb, the
country is not self- sufficient in staple commodities.
Nearly 50% of the total land area is devoted to
agricultural activities (Figure 4), but only 16So is
arable and, of that, only 65% to 75% is cultivated in
any one About 50% of the culti land is
devoted to cereals, but imports of grains nevertheless
are required. Once a net exporter of grains, Morocco
imports at least 5% of annual wheat requirements and
during drought years as much as 35 Sugar beet
production has been introduced on a large scale, and
sugar imports are declining as domestic sugar beet
production increases. Nevertheless, 65% of domestic
sugar consumption is still satisfied by imports.
Erratic rainfall is a major impediment to consistent
performance in agriculture. Historically, Morocco has
experienced one year of drought in every four.
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Typically, camel and horse are yoked to pull the plow. The farmers
employ whatever livestock they have, taking advantage of the
camel's strength and the horse's willingness to be guided. (C)

TOTAL LAND USE
Grazing
Land
Forest
Arable 11.0%
Land
16.2010 5.E% Esparto Grass
(Alfa)
Desert, Waste and Urban
50.9
FIGURE 4. Total land use (U /OU)
Supplementary water available for irrigation from
mountain sources makes the problem potentially less
serious than in the other drought -prone North African
countries, but only 8.55 of the cultivated land is now
irrigated. Most of this area is devoted to commercial
crops, while grains are grown mainly on rainfed lands.
Although Morocco generally has ample water to
supply present irrigation projects, extended droughts
such as the one in 1966 -67 can reduce the flow of
supplementary water to an inadequate level.
Agricultural output fluctuated widely during 1961
70 but registered an average annual growth rate of
3.4 about the same as population growth. Drought
hampered output in 1961 and was particularly severe
during 1966 and 1967. However, favorable weather
conditions brought a record crop in 1968 and at least
average harvests in subsequent years.
A wide variety of crops are grown, of which ce -eals
and citrus arc the most important (Figure 5). Cereals
are grown throughout Morocco on both modern and
traditional farms, while livestock are raised principally
by scn4inoniadic and n6madic people. Confined to the
north Atlantic coast and Sebou River basin area, citrus
is the principal commercial crop and the largest export
after phosphates. Olive! and grapes, both used
principally as inputs in processing industries, are
grown inland, around Fes and Meknes. Sugar beets
and vegetables are grown in the central and southern
coastal regions and inland on irrigated land.
(I Domestically consumed crops� Cercals acecunt
for 40 c oft lie value of agricultural production. Wheat
and barley are the principal cereal crops, together
accounting for more than 85% of cereal output. In the
traditional sector, hard wheat and bariey predomi-
nate. Virtually all barlev and about 80% of the wheat
are grown and consumed on traditional farms. Barley
is gradually being replaced by more palatable wheat
but is still a staple in the peasant diet and is also used
for animal feed. 'I'he modern sector produces most of
the important soft or bread wheat crop and, together
with imports, supplies most flour and ce7eals
consumed by the urban population.
Grain production fluctuates widely as a result of
weather conditions, but even under the best
circumstances yields are low. 'I'hose in the modern
sector are about double those in the tradition sector
but are less than one -half of average European yields.
Fertilizer use is virtually u4nown in the traditional
sector, and most seed is glear.ed from the previous
year's crop. Increased use of fertilizer on modern
farms, better seed selection, and extension of irrigated
facilities contributed :.r a small increase in yields
during the 1960's. Most of the increase in cereal
output during 1961 -70, however, is attributed to
expanded acreage.
FIGURE 5. Output of major agricultural products (U /OU)
(Thousands of metric tons)
1961 1962 1963 1964 1965 1966 1967 1968 1969 1970
Wheat............
634
1,247
1,195
1,196
1,314
814
1,090
2,411
1,612
1,870
Barley
544
1,185
1,463
1,169
1,189
506
1,100
2,223
1,309
1,477
Citrus
470
489
630
530
621
702
811
742
887
761
Grapes............
368
329
417
448
420
448
450
470
400
420
Wine (thousands
of hectoliters)..
na
2,596
2,570
2,459
3,449
2,110
1,369
1,750
700
1,252
Olive oil...........
16
19
27
126
38
18
18
50
16
30
Potatoes..........
140
142
225
188
271
275
205
160
300
359
Tomatoes.........
198
210
175
253
326
302
277
245
250
460
Sugar beets........
0
0
73
181
175
391
367
785
918
1,000
na Data not available.
5
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As further expansion of land planted in cereals is not
likely, production increases will depend on increased
yields. Use of fertilizer could considerably raise yields
on traditional farms, and additional increases could he
realized by introducing other modern techniques to
the traditional sector. However, no effective extension
service exists in the more remote areas, and none is
likely to be established in the early or mid 1970'x. In
1971 the government raised the producers' price for
wheat. This measure will stimulate output in the
modern sector, which accounts for only about 20% of
cereal production.
Sugar beet cultivation has been promoted by
government authorities in an attempt to reduce sugar
imports. Consequently, sugar beets are the most
rapidly expanding crop in Morocco. Begun in 1963,
production reached 1 million metric tons in 1970.
Meanwhile, sugar imports dropped from a peak of
US$65 million in 1964 to $27 million in 1970.
However, the cost of producing sugar from
domestically grown sugar beets is higher than the cost
of sugar refined from imported sugar cane, and beet
production has been subsidized through price support
programs. Sugar cane is being grown on an
experimental basis, but no definite plans exist for
large -scale cultivation.
Olives are cultivated primarily for their oil, most of
which is consumed domestically. Annual output varies
greatly, but, when mixed with imported vegetable oils,
is generally sufficient to supply domestic needs.
Continued imports of cheaper oils, much of them
under the U.S. P.L. 480 Program, enable Morocco to
export sizable amounts of olive oil in the more
productive years. All exports go to countries of the
European Economic Community (EEC), where
Moroccan olive oil receives tariff preferences. Once
grown exclusively in the traditional sector, olives are
now produced in about equal amounts by the modern
and traditional sectors. Approximately 80% of the
olive trees are located in the traditional sector, but
yields are considerably higher on modern farms, where
most trees are irrigated and more efficient planting
and picking methods are employed.
Kif, a product of the cannabis plant and a narcotic
similar to marijuana, is grown throughout the rugged
Rif mountain area of northern Morocco. The region's
staple crop, kif provides the farmer a modest income
that nevertheless is several times his potential income
from cereal cultivation. Although no reliable statistics
are available, it is estimated that 5,000 acres yield
about 600 metric tons of kif annually.
'All tons referred to in this chapter are metric.
Most urprocessed kif is marketed among lower class
Moroccv ns, while refined kif, or hashish, is generally
exported. Possession of kif is illegal in Morocco, but
enforcement is lax and the drug is readily available in
all cities. Hashish is smuggled out of Morocco by
various routes and means of transportation. Much is
believed shipped from the Mediterranean port of El
Jabha to Western Europe, taut neighboring Algeria
and the United States receive at least some Moroccan
hashish.
(2) Export crops� Morocco's principal gricultural
exports are citrus fruits and fresh vegetables.
Consisting primarily of oranges, tomatoes, and
potatoes, these two categories constitute about half of
total agricultural exports. Wine and legumes are also
exported in significant quantities.
All major crop exports are handled by the Moroccan
Marketing and Export Office (OCE ),3 which
generally markets produce for tLe account of the
producer and charges a commission. In the case of
citrus, however, the OCE purchases the crop at prices
fixed at the beginning of the crop year and markets
the fruit for its own acenunt. Created in 1933, the
OCE was of little importari.-- -'until 1965, when it was
given it monopoly over exports of all fruits, fresh
vegetables, canned goods, and cotton. The principal
reason for consolidating agricultural exports under a
single agency's control Nc:,s to facilitate accurate
reporting and repatriation of foreign exchange
earnings. Previously, expo; ters had been circumvent-
ing Moroccan foreign exchange regulations by under
invoicing sales and retaining funds abroad.
Citrus fruits account for only about 5% of
agricultural output but 5% of export earnings.
Although the proportion exportcd varies somewhat
from year to year, depending on quality, ripening
t'me, and conditions in competitor nations, an average
of about three fourths of production is exported by the
OCE. Th,-> remainder is marketed locally or processed
into juice and jams. France, the U.S.S.R., and West
Germany are the largest markets, together taking more
than 80% of exports. Although production increased
rapidly during 1960 -67, relatively constant plantings
and slackening French demand have caused a slowing
of growth since then.
Fresh vegetables are grown principally for foreign
markets especially France �and account for about
10% of exports. They are grown along the Atlantic
coast, mainly on irrigated land, and occupied about
247,000 acres in 1970.
'For the foreign language names of organizations and firms, see.
the Glossary.
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Legumes and pulses account for is of agricultural
exports. Almost all dry legumes except kidney beans
are grown in Morocco; broadbeans, 6ickpeas, and
peas are the major crops. Exports are shipped to
France and other European nations.
Once a leading agricultural export, wine has
diminished in importance since the mid- 1960's.
Historically, most wiae was sold under a duty -free
quota to France, where it received preferential prices
almost double those of the free market. However, the
quota was reduced in 1968 from 26 million gallons to
'z 260,000 gallons and although increased in 1969,
fxs when the French had a bad grape harvest �was finally
revoked in 1970. Loss of the French market reduced
the quantity of wine exported and lowered the average
export price as greater amounts were sold at free
market prices. Consequently, wine exports fell from
t, $12 million in :967 to about $8 million in 1970. New
markets have been established in Sweden, Switzer-
land, and Belgium, but they have not Tally replaced
the French market. The EEC's unwillingness to permit
the blending of Moroccan and domestic wines will
probably preclude significant export expansion to
other Western European markets. Dwriestic wine
consumption, by tourists ;nd vinegar manufacturers,
is on the rise, but total demand is expected only to
equal current production during the next s,,veral years.
Consequently, the reduction in vineyard acreage
from 180,000 acres in 1967 to 147,500 acres in 1971
is not expected to be reversed.
Promoted by the government during the early
1960's, cotton cultivation and export has been reduced
in recent years. Disease and market ..ng problems,
particularly long payment delays by the OCE,
discouraged farmers. Consequently, after having
expanded from 18,300 acres in 1960 to 56,800 acres in
1967, cotton planting dropped to only 34,600 acres in
1970. Most cotton is grown in the Tadla area, and
production is relatively constant at 6,000 tons per
annum. Exports average about 5,000 tons annually
and earn about $5 million.
(3) Livestock Animal products account for about
one -third of agricultural output. Some dairy cattle are
raised on modern farms, but most livestock herds are
owned by seminomads or nomads. A ranch run by the
U.S. King Ranch in cooperation with the Moroccan
Government is breeding imported stock with native
cattle in an attempt to produce a hardy meat strain.
Milk output increased almost 50% during 1961 -70,
as intensive dairy farming was introduced on modern
farms, but production of other livestock products
remained relatively stable (Figure 6). Meat and milk
production per animal is low, due mostly to
FIGURE 6. Livestock products (U /OU)
(Thousands of metric tons)
M E. AT MILK W30L
1961 165 359 15
1962 148 394 15
1963 150 429 15
1964 148 443 16
1965 160 482 14
1966 168 501 14
1967 174 529 14
1968 175 525 12
1969 180 535 14
1970 175 525 14
overgrazing and haphazard breeding practices.
Livestock are generally regarded as a source of wealth
by the traditional farmer, who values quantity more
than quality in his stock. Consequently, farmers are
reluctant to reduce herd sizes to improve output.
Moreover, most livestock are grazed on communally
held land, a fact which does not encourage individual
improvement efforts. During drought years, lack of
fodder and water necessitate widespread slaughter.
Herds are then reduced (Figure 7), but meat
production increases only slightly because animals
usually have suffered considerable weight loss.
The Centra! Dairy (Centrale Laiterie)� headquar-
tered in Casablanca, with branches throughout the
country �plus three cooperatives and one state -owned
facility are the only large, relatively modern dairies in
Morocco. Most milk sold commercially is collected
and marketed by numerous small, independent
traders.
Livestock products are used extensively in
traditional handicraft industries. Ncarly half of all
wool produced is hand dyed and woven into wool
carpets, for which the ancient cities of Fes and Meknes
are famous. The remainder is sold to textile mills for
processing. hides and skins support a large leather
tooling industry, which produces handmade goods
ranging from bookeovers to ladies' purses.
FIGURE 7. Herd size (C)
(Thousands of heads)
1958 -63
AVERAGE 1965 1968 1971
Sheep.......... 12,F16 14,500 12,012 16,473
Goats.......... 6,491 7,000 6,835 7,000
Cattle.......... 2,668 2,650 2,744 2,650
Mare:.......... 262 280 247 280
Mules.......... 272 260 306 269
Donkeys....... 1,117 1,250 1,019 1,250
Camels......... 208 210 162 210
N
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Ditch and lock near Sidi Slimane
FIGURE 8. Irrigation facilities (U /OU)
(4) Development Agricultural development is one
of Morocco's priority goals, and it has received about
45% of government investment since 1968. Some 85%
of total agricultural investment is made by the
government; traditional farmers invest almost nothing
and other private investment has been relatively small.
The new Five Year Development Plan (1973 -77)
continues to emphasize agricultural development but
calls for some reduction in the share of total
government investment allocated to it. The planned
reduction reflects government intentions to concen-
trate on fuller utilization of existing facilities rather
than on the construction of additional capacity.
Government efforts to improve agricultural output
have been directed primarily to the modem sector.
Extension services in this sector provide one extension
worker for each 170 farmers compared to one for
1,250 farmers in the traditional sector. Credit is more
readily available to the modern farmer, whose larger
holdings and income generally make him a better
credit risk. Subsidized credit is available to the small
traditional farmer, but funds are limited. Nearly 75%
of government investment expenditures and virtually
all private investment in agriculture is allocated to the
modern sector.
8
Servicing primarily the modern sector, the
governments large irrigation projects not only supple
water but also involve land reform, credit extension,
introduction of more profitable crops, development of
dairy farming, and training programs. The govern-
ment hopes gradually to bring numerous small
traditional farms and some tribal :.oldings within
areas serviced by the irrigation projects.
Under the 1968 -72 development plan, about 605i of
agricultural investment was allocated to construction
of dams and other irrigation facilities (Figure 8) in an
effort to increase total irrigated area from 395,000
acres in 1968 to 667,000 acres in 1972. Implementa-
tirn rates have been rur_ning considerably behind
schedule, and irrigation was introduced to only about
.30,000 acres of cultivated land during 1968 -70.
Repeated administrative changes, land tenure
problems, seasonal flooding, normal agricultural
activity that interfered with construction, and time
required to train farmers in the new techniques
accounted for most of the delays. The major irrigation
projects include those of the Rharb, Tadla, Moulouva,
Doukkala, Haouz, Tafilalt, and Oued Malah.
Development projects in the traditional sector are
small and consist largely of technical assistance. At
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Dam at Bine el Ouidane

am one time, they are generally confined to a single
area or directed at a single problem. The Project to
Reorganize Nonirrigated Agriculture in Morocco
(PRAM) and the Economic and Rural Development
of the Western Rif (DERRO) involve instruction and
work relief programs. Project DERRO is designed to
improve crops and pasture land and to develop a small
irrigation system in the depressed western Rif area; in
1971, is encompassed only 65,000 acres. A fertilization
project (Operation Engrais), begun in 1966,
distributes improved seed and fertilizer at discounted
prices to farmers with less than 50 acres. This project
embraced 760,000 acres in 1969, but organizational
difficulties and a shortage of extension workers forced
a reduction to 667,000 acres in 1971 despite strong
farmer interest. The Promotion Nationale, the most
Publicized rural development program, employs
surplus workers on projects such as reforestation and
road construction.
Although tenure problems pervade agricuiture, land
reform has proceeded slowly. The proliferation of
small, frequently fragmented plots, and extensive
collective tribal holdings deter full development of
agricultural resources. Approximately 7% of the
farmers o"n 50% of the cultivated land, while 60% of
the farmers own less than one acre and 33% no land at
all. This uneven distribution is even more extreme in
the better farming regions. Tribal ownership, which
includes most pasture land and about 15ic' of the
cultivated land, discouw ages individual initiative to
develop or even preserve the fertility of the land.
Although government authorities recognize these
problems, their reluctance to disrupt traditional rural
life and to break up efficient farms impedes action.
Land reform to date has been limited primarily to
redistributing the farms of the European settlers that
were nationalized after independence. Distribution of
the 600,000 acres that were nationalized has
proceeded slowly, with only about 100,000 acres
having been distributed through 1970. Following the
attempted coups in 1971 -72, the program was
accelerated somewhat: 79,00 acres were distributed
in 1971 (compared with 74,000 acres during 1968 -70),
and 198,000 acres were scheduled for distribution in
1972. In addition, some 80,000 acres of French -owned
land was to be purchased and given to landless
Moroccans.
The Agricultural Investment Code, created in 1969,
may stimulate implementation of land reform and use
of irrigation facilities. The new code precludes
subdivision of land in irrigated areas into plots of less
than 12.4 acres and allows for state confiscation, with
compensation, of land for consolidation and
redistribution. It also stipulates that owners of
irrigated lands be assessed 4051 of irrigation
infrastructure costs and that "water dues" be paid
whether the water is used or not. The code makes
"proper use" of improved land in the irrigated sectors
obligatory and provides for penalties should farmers
fail to comply with government cultivation programs.
The code is now being implemented in the Sebou
irrigation project, where much of the land is
communally held or owned by small farmers.
b. Forestry
Although I I of Morocco's land area is forested,
forestry contributes little to the economy. Some cork
oak and eucalyptus plantations are located on the
Atlantic coast. Much of the forest, however, is in
inaccessible mountain areas, and much of it consists of
scruh and bush. Only about 50% of the forest land is
considered productive.
Wood production is not sufficient to meet local
needs, and lumber and paper pulp imports are rising.
In 1970, Morocco imported about USS30 million
worth of lumber and pap r pulp. Lumber imports
alone rose from $8 million in 1960 to $20 million in
1970. Under a reforestation program, 35,000 acres are
planted each year, but the primary aim is to inhibit
erosion in the mountainous areas and around
irrigation reservoirs. Thus far, however, reforestation
has been inadequate to slow erosion significantly.
The most important forest products are vegetable
horsehair, cork, and alfa (esparto grass). Vegetable
horsehair, made from the leaf fibers of the dwarf
Mediterranean palm, is used domestically in mattress
stuffing and tomato packing. Cork is exported in raw
and semiprocessed states and earned about $6 million
in 1969. Raw cork exports are expanding slowly, but
semi process(-(] exports have been unable to compete
with subsidized Spanish production and thus declined
from $10 million in 1963 to $I million in 1969. Alfa
grass, ,vhich is collected from plains and forest areas, is
exported for use in making high grade paper pulp.
About 41,000 tons of alfa grass, valued at about $1
million, were exported in 1970.
Morocco's natural forests are state o,vned, but
about 20% of the forest land is exploited freely by the
private sector. All forest land is administered by the
Forest Service, which is responsibly for reforestation
and conservation projects. The Forest Service is also
collaborating with private concerns to create
eucalyptus forests in the Rharb area, mainly for export
purposes. Most existing forest plantations are state
owned.
9
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e. Fisheries
Morocco has a small and stagnating fishing
industry. The catch averaged 241,000 metric tons
annually during 1966 -70 (Figure 9). Sardines caught
along the Atlantic coast have declined in importance
since the mid- 1960's but are still the leading catch.
Mackerel, anchovies, and tuna are also of some
importance.
Although government efforts to encourage fish
consumption have been moderately successful, most
fish are still exported. Canned fish earn about $25
million annually in foreign exchange and account for
about one- fourth of manufactured exports. The largest
market is France, but significant amounts are sold to
numerous other nations.
The industry is threatened by a declining fish
population and impending elimination of favorable
French import quotas. Sardines have been migrating
south weshvard, out of reach of Morocco's antiquated
fishing fleet. Almost all of Morocco's boats are small
wooden crafts (Figure 10) without refrigeration
facilities and can remain at sea no longer than 5 hours
after taking in a catch. Many of the boats do not
venture out of sight of land, and labor union
regulations cause them .o be overmanned. Conse-
quently, catches often are inadequate to run canning
factories at full capacity, and processing costs are high.
Nevertheless, canning plants are currently operating at
a profit because the amounts imported duty -free by
France yield a good return. In January 1973, however,
Moroccan exports to France will be subject to
Common Market tariffs and ceiling prices. The
Common Market has agreed to a 605'c reduction in its
common external tariff for Moroccan fish, but this
measure probably will not offset loss of preferential
French treatment.
FIGURE 9. Commercial fish catch (U /OU)
(Thousands of metric tons)
[K
Sonic cfforts to modernize the fishing fleet have
been made, and further improvements are planned by
the government. The private firm Moroccan
Commercial and Industrial Trading Company
(OMCI) pat Morocco's first 200 -ton refrigerated ship
into service in 1970 and is now experimenting with a
250 -ton vessel. Further private modernization will
depend on OMC1's success with t',Iese ships.
Government plans to create joint Moroccan
Japanese deep sea fishing fleet, to be based at Agadir,
have been announced, and the National Fisheries
Office (ONP) is discussing joint ventures with several
other firms. The ONP is also investigating the
purchase of vessels with freezer capacity to fish as far
south as the Gulf of Guinea and is contemplating the
construction of new freezing plants in southern
Morocco.
2. Fuels and power (U /OU)
Morocco is self sufficient in coal but must satisfy
most of its crude oil needs through imports.
a. Petroleum
Oil output is small and is declining. Production by
Moroccan Petroleum Company (SCP), the sole
producer, declined from a peak of 150,000 metric tons
in 1963 to 22.620 tons in 1971 (Figure 11). Production
is expected to cease by 1973, as known reserves will
then be fully depleted. Several firms hold exploration
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FIGURE 10_ Small fishing fleet anchored in mouth of
the Sebou River (U /OU)
1965
1966
1967
1968
1 969
1970
Fish for processing:
Sardines...........
160
252
208
168
169
163
Mackerel..........
10
6
9
8
14
Tuna
5
4
4
2
1
58
Anchovies
3
1
2
:3
1
Other
10
12
4
9
10
Total...........
188
275
227
190
19.5
221
Shellfish
1
3
1
1
Ncgl
1
Fresh fish sold on
domestic market....
18
20
22
24
27
33
Grand total..........
207
298
250
215
222
2515
[K
Sonic cfforts to modernize the fishing fleet have
been made, and further improvements are planned by
the government. The private firm Moroccan
Commercial and Industrial Trading Company
(OMCI) pat Morocco's first 200 -ton refrigerated ship
into service in 1970 and is now experimenting with a
250 -ton vessel. Further private modernization will
depend on OMC1's success with t',Iese ships.
Government plans to create joint Moroccan
Japanese deep sea fishing fleet, to be based at Agadir,
have been announced, and the National Fisheries
Office (ONP) is discussing joint ventures with several
other firms. The ONP is also investigating the
purchase of vessels with freezer capacity to fish as far
south as the Gulf of Guinea and is contemplating the
construction of new freezing plants in southern
Morocco.
2. Fuels and power (U /OU)
Morocco is self sufficient in coal but must satisfy
most of its crude oil needs through imports.
a. Petroleum
Oil output is small and is declining. Production by
Moroccan Petroleum Company (SCP), the sole
producer, declined from a peak of 150,000 metric tons
in 1963 to 22.620 tons in 1971 (Figure 11). Production
is expected to cease by 1973, as known reserves will
then be fully depleted. Several firms hold exploration
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FIGURE 10_ Small fishing fleet anchored in mouth of
the Sebou River (U /OU)

FIGURE 1 1. Energy sources (U /OU)
�Includes only sales of the National Electricity Office.
concessions and two small off -shore discoveries were
made in the 1960'x, but no commercially exploitable
fields have been found in many years.
Moroccap refineries process enough imported and
domestic oil to meet nearly all requirements. In 1970,
1.5 million tons of crude oil were imported at a cost of
$23 million. Approximately 55% of petroleum imports
come from Algeria and about 40% from the U.S.S.R.
Morocco's two refineries have a combined capacity
of 3.2 million tons per year. The Moroccan Italian
Refining Company (SAMIR) plant at Mohammedia
n-Aies exclusively on imported crude oil and accounts
for about 75% of refined output. It is owned by the
Moroccan Government and the Italian National Fuels
Authority (EN 0. The other refinery, owned by SCP, is
at Sidi Kacem, near the petroleum fields. Storage
facilities for refined products are located in Sidi
Slimane, Kenitra, Rabat, Casablanca, and Tangier.
Domestic distribution is carried out In 12 firms, of
which nine are foreign owned and include the U.S.
firms Esso. Mobil, and Texaco.
Morocco also has small natural gas deposits. During
most of the 1960's, minor amounts of petroleum
associated gas and output from the Rharb gas fields
accounted for all Moroccan production. Output was
relatively constant at 11 million cubic me.%-.rs annually
and was used as fuel in a few local industries. Newly
discovered fields at Djebel jeer and Kechoulah began
producing in 1969, boosting annual production to
more than 40 million cubic meters. Gas from these
fields is used to generate power for the Youssoufia
phosphate mines. Natural gas production is expected
to increase further when the newly found Douar je'.)ar
field near Kenitra starts operating. To be exploited by
the foreign firm American Petrofina Exploration in
cooperation with the state's Mining Exploration and
Investment Bureau (BRPM), it will supply 20 million
cubic meters a year to a paper and box company at
Kenitra. Reserves at Douar jebar are estimated at 140
million cubic meters and could be exhausted in 7
yea rs.
b. Coal
Coal is mined by the company North African Coal
(Charbonnages Nord Africaine) at jerada and is used
mainly to fuel cement and power plants. Poor in
quality and located in rernote areas, Moroccan coal is
expensive to mine. However, in an effort to provide
jobs in the depressed hinterland, the government
encourages production by subsiding losses. Annual
subsidies now total the equivalent of about US$4
million but may decline because of the 1971 increase
in coal prices. Coal output in 1970 was about 430,000
metric tons, of which 370,000 ton:, were consumed
domestically. Exports went mainly to Algeria and
Italy.
Coal production has declined somewhat since 1967
but is expected to increase sharply because of the
jerada powerplant's needs. This plant, which began
production late in 1971, is expected to consume
250,000 tons annually beginning in 1972 and as much
as 720,000 tons by 1975. Stich an increase, however,
may be beyond the industry's capability.
c. Electric power
The electric power industry is well developed and
services domestic needs Yeasonably well Morocco's
electric generating capacity is estimated at 748,000
kilowatts (kw.); annual production is about 1.9 billion
kilowatt -hours (kw. -hr.), or 116 kw. -hr. per capita.
Mining activities anr'. urban household, industrial,
and commercial use account for more than half of
power consumption. The railroads and irrigation
projects are also significant users of electricity.
Although there are over 30 operating plants, 14
facilities makeup more than four fifths of the national
generating capacity. Approximately 60% of Morocco's
generating capacity is hydroelectric. Five of the nine
principal hydroelectric plants are located on the Oued
Ou-n er Rbia and its tributaries. The Bine el Ouidane
Hydroelectric Powerplant (installed capacity, 135,000
kw.) is the largest powerplant in the country.
Important thermal plants are located at Tangier, Sidi
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1965
1966
1967
1968
1969
1970
Electricity sales kw .-hrs.)*
1,24:3
1 ,:317
1 366
1,497
1 607
1,74:3
Crude oil extraction (thousand tons)
103
103
97
89
59
44
Crude oil refining (thousand tons)
1,104
1,211
1,247
1,339
1,470
1 506
Coal extraction (thousand tons)
419
451
482
451
397
433
Natural gas production (million cubic net- rs).....
11
11
11
11
42
44
�Includes only sales of the National Electricity Office.
concessions and two small off -shore discoveries were
made in the 1960'x, but no commercially exploitable
fields have been found in many years.
Moroccap refineries process enough imported and
domestic oil to meet nearly all requirements. In 1970,
1.5 million tons of crude oil were imported at a cost of
$23 million. Approximately 55% of petroleum imports
come from Algeria and about 40% from the U.S.S.R.
Morocco's two refineries have a combined capacity
of 3.2 million tons per year. The Moroccan Italian
Refining Company (SAMIR) plant at Mohammedia
n-Aies exclusively on imported crude oil and accounts
for about 75% of refined output. It is owned by the
Moroccan Government and the Italian National Fuels
Authority (EN 0. The other refinery, owned by SCP, is
at Sidi Kacem, near the petroleum fields. Storage
facilities for refined products are located in Sidi
Slimane, Kenitra, Rabat, Casablanca, and Tangier.
Domestic distribution is carried out In 12 firms, of
which nine are foreign owned and include the U.S.
firms Esso. Mobil, and Texaco.
Morocco also has small natural gas deposits. During
most of the 1960's, minor amounts of petroleum
associated gas and output from the Rharb gas fields
accounted for all Moroccan production. Output was
relatively constant at 11 million cubic me.%-.rs annually
and was used as fuel in a few local industries. Newly
discovered fields at Djebel jeer and Kechoulah began
producing in 1969, boosting annual production to
more than 40 million cubic meters. Gas from these
fields is used to generate power for the Youssoufia
phosphate mines. Natural gas production is expected
to increase further when the newly found Douar je'.)ar
field near Kenitra starts operating. To be exploited by
the foreign firm American Petrofina Exploration in
cooperation with the state's Mining Exploration and
Investment Bureau (BRPM), it will supply 20 million
cubic meters a year to a paper and box company at
Kenitra. Reserves at Douar jebar are estimated at 140
million cubic meters and could be exhausted in 7
yea rs.
b. Coal
Coal is mined by the company North African Coal
(Charbonnages Nord Africaine) at jerada and is used
mainly to fuel cement and power plants. Poor in
quality and located in rernote areas, Moroccan coal is
expensive to mine. However, in an effort to provide
jobs in the depressed hinterland, the government
encourages production by subsiding losses. Annual
subsidies now total the equivalent of about US$4
million but may decline because of the 1971 increase
in coal prices. Coal output in 1970 was about 430,000
metric tons, of which 370,000 ton:, were consumed
domestically. Exports went mainly to Algeria and
Italy.
Coal production has declined somewhat since 1967
but is expected to increase sharply because of the
jerada powerplant's needs. This plant, which began
production late in 1971, is expected to consume
250,000 tons annually beginning in 1972 and as much
as 720,000 tons by 1975. Stich an increase, however,
may be beyond the industry's capability.
c. Electric power
The electric power industry is well developed and
services domestic needs Yeasonably well Morocco's
electric generating capacity is estimated at 748,000
kilowatts (kw.); annual production is about 1.9 billion
kilowatt -hours (kw. -hr.), or 116 kw. -hr. per capita.
Mining activities anr'. urban household, industrial,
and commercial use account for more than half of
power consumption. The railroads and irrigation
projects are also significant users of electricity.
Although there are over 30 operating plants, 14
facilities makeup more than four fifths of the national
generating capacity. Approximately 60% of Morocco's
generating capacity is hydroelectric. Five of the nine
principal hydroelectric plants are located on the Oued
Ou-n er Rbia and its tributaries. The Bine el Ouidane
Hydroelectric Powerplant (installed capacity, 135,000
kw.) is the largest powerplant in the country.
Important thermal plants are located at Tangier, Sidi
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E
Kacem, Casablanca, Oujda, and Jerada. Thermal
facilities are fueled mainly by domestic coal.
A national transmission grid interconnects all
principal powerplants and consumption .:enters. The
transmission system is basically comprised of 60, 150,
x
and 225 kilovolt (kv.) transmission lines; regional
distribution networks of 30 kv. and less complement
tire high voltage trunk lines. Transmission facilities
V
now under construction wil! increase the reliabilitv of
Y the national system and extend service to a larger area.
The National Electricity Offiec (ONE), a
government corporation under the Ministry of Public
Works, is responsible for the production, transmission,
and distribution of electricity throughout the countrN.
ONE facilities account for approximately 95% of the
installed generating capacity. A former Spanish
company, Moroccan Electric Company (Electras
Marroquies, S.A.), supplies much of the electricity
consumed in the Tangier Tetouan area. There: are also
a few privately owned powerplants which supply
mining or manufacturing establishments.
The electric power industry is largely dependent on
foreign suppliers for equipment. Most powerplants
contaia French or Spanish components, and Soviet
equipment is in use at some of the newer plants,
particularly the Jerada faciii y.
The ONE is continually expanding production
capacity to satisfy increasing industrial demands.
Several small hydroelectric powerplants are under
construction at dams built primarily for irrigation
purposes. Heavy reliance on hydroelectric power has
caused serious concern because of recurrent droughts,
however, and the government is working to increase
FIGURE 12. Mineral production and exports (U /OU)
(Thousands of metric tons)
the ratio of power produced by thermal plants. To
accomplish this, additional generators are planned for
the thermal plants at Jerada and Casablanca.
3. Metals and minerals (U /OU)
The mining industry is of considerable importance,
:accounting for 5% of GDP and employing about
:36,000 workers. Mineral exports amounted to about
$160 million in 1970, or nearly one -third of total
t xport earnings. Morocco has extensive phosphate
reserves and small deposits of various other minerals,
including iron, lead, manganese, zinc, cobalt, and
copper. Profits are subject to highly variable world
market prices, however, and output of many minerals
has declined since 1960, as mines were depleted
(Figure 12).
Government participation in the mining sector is
pervasive. Phosphates are produced and marketed by
the state enterprise Moroccan Phosphates Office
(OCP), and the states Mining Exploration and
Investment Bureau (BRPM) participates in most other
mining activities. Although the government does not
prohibit foreign exploitation of mineral deposits, most
foreign firms find it advantageous to arrange ffir
government participation, usually through the BRPM.
To encourage further development of the mining
sector, the government engages in exploration directly
under BRPM auspices and has introduced investment
incentives for private firms. In 1970, the Investment
Code �which provides for tax reductions, repatriation
of investments, customs exemptions, and accelerated
depreciation �was extended to the mining industry.
Export taxes also were reduced for most minerals other
than phosphates.
as Data not available
12
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19610
1961
1962
1963
19614
11)(15
1966
1967
196S
1969
1970
Phosphate rock
7,472
7,950
8,162
8,548
10,095
9,507
9,418
9,944
19,510
10,663
11,
Exports
as
as
as
na
1O,0�lo
9,181
9,105
9,286
10,018
10,199
11,2:30
Iron ore
1,.577
1,462
1,149
1,035
887
951
1,017
884
809
749
872
Exports
as
rra
na
as
1,077
977
837
923
6.59
859
81.1
Manganese
474
571
.169
3:351
341
375
36:3
286
160
130
,12
Exports
an
na
as
ua
226
347
:334
225
161
1:30
11:3
Lead ore
1:35
128
1:31
106
10.1
113
119
116
121
118
121
Exports
rta
rta
ea
as
82
89
89
8o
85
72
79
Zinc cre
82
68
58
59
81
95
94
83
68
72
:32
Exports
as
na
as
as
74
95
90
75
79
70
39
Cobalt
1:3
1:3
14
14
15
17
18
18
15
1.1
6
Exports
as
as
as
na
15
14
19
19
is
16
9
Copper ore
ua
na
as
as
na
1
9
8
10
9
12
Exports
as
as
rut
na
na
b
7
8
6
11
10
as Data not available
12
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FIGURE 13. Phosphate mine in the Oued
Zem region (U /OU)
a. Phosphates
Morocco ranks third in world production of
phosphates, following the Un:led States and the
Soviet Union, and first or second in world exports,
depending on the level of U.S. sales in it given year. In
1970, phosphates represented 7WC' of the value of
mining output and earned $113 million in foreign
exchange, accounting for 23% of total exports. Nearly
80% of phosphate exports are sold to Western Europe,
where: France, Spain, Belgium, and the United
Kingdom are the largest customers. The major mining
areas are at Khouringa and Youssoufia. Khouringa
production is generally exported, but the lower quality
Youssoufia outpui is used for domestic processing as
well. A nev� mine was opened at Benguerir, near
Marrakech, in 1968.
The phosphate industry is threatened by the
prospect of nee- foreign competition and falling prices.
High quality ore, easily rained deposits and -datively
short overland transportation routes moderate
production costs, but profits have been falling because
of a downward trend in international prices. Large
U.S. sales have been the primary cause of lower
phosphate prices in Western Europe: since the mid
1960's. The higher yiality Moroccan ore, geographi-
cal proximity to markets, and the reliability of supple,
however, have cushioned the drop' in Moroccan
phosphate prices. Future competition will come
largely from the Spanish Sahara, which shares most of
Morocco's advantages. large deposits there are to
begin production in 1973, and output is scheduled to
rise from 3 million mmtric� tons in 1973 to 10 million
metric tons by 1950, s nearly as much as current
Moroccan production.
To meet competition, the OCP has modernized
production facilitk-s and intensified the use of strip
mining technique!; (Figure 13). During 1968 -70, the
OCP invested the eq of nearly USS90 trillion,
mostly from internally generated funds, to mechanize
the Khourioga mines and to expand Casablanca port
facilities. Two calcination plants, one under
constructien at Khouribga and another planned at the
Youssoufia mines, will improve the quality of the
product and reduce shipping costs. Use of cheaper,
open pit mining has been extended with the opening
of the Grand Daoui mine at Khour'bga; open pits
accounted for about Wi of production in 1970,
compared with 35 "1 it few years earlier.
Of the 11.4 million metric tons of phosphate rock
produced in 1970, only some 200,000 tons were
processed in Morocco. The chief processing facility is
the Moroccan Chemical Complex (Maroc Chimie
Complex) at Safi, which produces phosphoric acid,
triple superphosphate, and diammoniutn phosphate,
all primarily for export. In 1970, 105,000 tons of triple
superphosphates produced at Safi were exported.
About 33,000 tons of phosphate were processed for
local consumption by the Moroccan Fertilizer
Company (Societe Cherifienne des Engrais) in
Casablanca. A n( plant planned by Moroccan
Phosphorus (Maroc Phosphore) at Safi should increase
domestic processing considerably. Projected for
13
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completion in 1973, the plant is to process one million
tons )f ore annually into phosphoric acid and
monammonium phosphate.
b. Iron and steel
Iron ore production is Morocco's second largest
mining endeavor in term- of quantity. Output
declined during the early 1960's but has hovered
around 800000 tons since 1967. Almost all output is
exported, although changes in stocks prevent exports
from mirroring annual production. In 1970, iron ore
exports of about $6 million went to West Germany
and other European nations.
Iron ore mining is centered in the Nadir area and is
conducted by the Spanish Rif Mining Company
(Compagnie Espagnole Les Mines du Rif), in which
the government holds a 27% participation. Several
uneconomic mines were dosed in the 1960's, but
operation of other mines is to he prolonged by
concentrating and pelletizing the ore. A $28 million
pelletizing plant is now under construction and will be
completed this year. Morocco has signed a preliminary
agreement with Algeria for the joint exploitation of the
Gara Djebilet deposits near Tindouf, Algeria. The
project envisages exporting ore through a '.Moroccan
port on the Atlantic, but arrangements are proceeding
slowly.
Moroccan steel production is limited to a single
small scrap processing plant in Casablanca. Owned by
the African Metallurgical Company (SOMETAIA
this plant has an annual capacity of 15,000 metric tons
and produces rolled steel and wire. Morocco has
contemplated building an integrated steel mill at
Nador since 1960, but no definite construction plans
exist. The Austrian organization Austroplan is
conducting a feasibility study for a gas powered plant
that would use the IIY1. direct re,luction process to
produce 200,000 to 300,000 metric ,ons of steel
annually. A study by the U.S. Export- Import Bank
indicates that several basic problems could hamper
Moroccan steel production. Nador is located far from
anticipated markets in Casablanca and Rabat. Costs
are expected to be inflated by high -cost electric power
and natural gas inputs and could prohibit profitable
steel exports. Moreover, an adequate supply of natural
gas from Algeria is not yet assured.
c. Lead and zinc
Although lead and zinc minerals are produced in
lesser quantities than iron, they are more valuable. In
1970, they accounted for about 13% of the value of
mining output and 111 of mining exports. Lead
exports earned $14 million and zinc exports nearly $3
million. Both minerals are extracted from mines
14
operated by the }French Mining Company of Zellida
(Societe Francaise des Mines de Zellida), a company
at Zellija- Botbeker owned by the Moroccan
Government and U.S. and Fre-rch interests.
Exhaustion of the Zell ija- Boubeker deposits in 1969
caused Morocco's largest lead -zinc mine to be closed,
and the adjacent Touissit mine, Morocco's second
largest lead -zinc mine. is expected to close for the
same reason t974. Consequently, zinc production
dropped {precipitously in 1970 and is expected to
decline further. However, the niow intensive
exploitation of other mines and the opening of the
Zeida lead mine should maintain lead production at
about 1 metric tons annually. Almost one -third
of Moroccan lead ore is processed irio metal at the
Oued el Iichaer foundry for export to France; the
remainder is exported as concentrates for processing in
Western Europe. Some zinc, copper, and silver are
;ncluded in the lead concentrates.
d. Other minerals
Unable to compete with less expensive Soviet
output in Western European markets, Moroccoccased
production of most metallurgical -grade manganese in
1969. However, output of chemical -grade manganese
remains relatively constant at :;bout 110,000 metric
tons annually. Most manganese is produced at Irnini
for export, mainly to the United States, France, and
the Netherlands.
Copper output rose from 6,000 metric tons in 1965
to 12,000 in 1970, and the outlook for continued
increases k good. Closure of the Imi n'Irfi mine in
1970 was offset by the opening of the Tanfit mine,
and another mine at Tanerhift beran production in
1971. BRPM joint exploration with the Japanese firm
Mitsui has uncovered deposits at Bleida. Several oth. r
firms also are exploring for copper.
Cobalt production dropped sharply in 1970 because
o,d cobalt veins were exhausted during the first half of
the vear. However, a new vein, discovered by Soviet
geologists, b egan producing in 1971 and should
prevent further decline in output. Cobalt is marketed
in France and the People's Republic of China.
Production of rock salt is expected to begin shortly at a
large deposit discovered at Berrachid by a U.N. team.
Reserves are estimated at 2 billion tons and output, all
to be exported, is expected to he at least :500,000 tons
annu ally. Many other minerals, including antimony,
silver, pyrrhotite, barite, and fluorite are mined on a
small scale.
4. Manufacturing and construction (U /OU)
a. Manufacturing
Manufacturing, including handicrafts, employs
about 9 of the labor force and supplies 9W of
domestic requirements for manufactured products. It
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is made up of a siza�ie, indigenous handicrafts sector
and a much larger, well- equipped modern �-';or.
Nearly t %vo- thirds of the manufacturing labor force is
employed in small enterprises where traditional
methods are used to grind flour, press olive oil. weave
carpets, fashion leather and straw goods (Figure 14)
arid work metals. Particularly popular with tourists,
products of the traditional sector contribute US$8
million to export earnings and account for about one
quarter of the value added of manufacturing.
Traditional techniques are most prevalent in food,
textile, and leather manufacturing, where they
account for 15% to '30% of output. Fes, Meknes, and
Marrakech are the centers of traditional handicrafts,
although production continues in the old sections or
nwdinahs of all large cities. Modern industry is
heavily concentrated in Casablanca but is also found
in all urban centers. Modern techniques were first
introduced by the French in food canning, textiles,
paper, and other light industries, and since
independence, oil refining, sugar milling, tire
manufacturing, and automobile assembly have beet:
added to the modern sector. Gradually, modern
techniques are being substituted for traditional
methods in nearly all phases of manufacturing.
Despite the establishment of some sophisticated
industries, the bulk of Moroccan manufacturing still
consists of processing primary products for domestic
consumption and, to a lesser extent, for export. Food
processing and textile production account for more
than 50Vc of the value of manufacturing production
while heavy industries (mainly cement manufacture
and smelting) account for only WL The processing of
intermediate goods accounts for the remainder.
Manufacturing growth has kept pace with GDP
since 1961 (Figure 15), but expansion may slow in the
future due to a variety of problems. Rapid growth is
discouraged by the fact that underutilization of
existing capacity is common, particularly in the textile
and food processing industries. In addition, food
processing industries are frequently unable to operate
continuously because of drought- caused interruptions
in the supply of agricultural inputs. Another constraint
is the lack of skilled labor and experienced technical
and managerial staffs. Low labor productivity more
than offsets the relatively low wage scales, and most
products are relatively high cost. A large part of
manufacturing production must be protected by
tariffs and quotas, thus passing the higher costs on to
consumers.
(1) Food processing �Flour milling, one of the
oldest manufacturing activities in Morocco, is the
largest food processing industry. Although Morocco
has many small traditional flour mills. 47 large,
modern plants supple most urban consumption. The
portion of flour milled by modern firms fluctuates,
rising during droughts when large quantities of soft
wheat are imported for txocessing, and falling during
years of bumper harvests. All flour stilled in Morocco
is consumed dornestical!y and is supplemented in most
years by a fey thousand tons of imported flour.
Sugar and vegetable oil processing are the next
largest food processing industries. Racy cane sugar is
imported from Cuba and Brazil for processing while
sugar beets are grown domestically. Vegetable oils are
pressed and refined in Morocco, and doinestically
produced ;)lives are processed into oil for local
consumption and export. Large P.L. 480 imports of
corn oil are refined in Morocco for local consumption.
The sugar processing industry in 1971 consisted of
four refineries with a combine(] capacity of 420,000
metric tons per ,rar and seven racy sugar mills. Both
the plant of the Moroccan Sugar Refining Company
(COSUMAR), which is by far the largest, arid the
Maghreb Industrial "Trading Company (()IM)
refinery are located in Casablanca. The other two
refineries are located a Tetouan �the Moroccan
Sugar and Alcohol Corporatio (CAAMSA) and Talda
Sugar (SUTA). SUTA processes raw beet sugar while
the others process racy cane sugar. COSUMAR is
owned equally by the Moroccan Government and
French interests but the smaller CAAMSA and OIM
refineries arc privately owned. Approximately $160
15
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FIGURE 14. Chairs and tables are among the items
woven from straw at the market in Sale (U /OU)

FIGURE 15. Index of industrial production (U /OU)
(1958 =100)
1961 1962 1963 1964 19651 1966 1967 1968 15169 1970
Food
I15
122
121
127
127
138
144
1:36
141
162
Textiles
124
147
183
184
181
190
196
224
267
289
Leather
123
11'3
121
102
100
104
96
112
121
107
Construction materials........
118
123
137
143
139
145
145
168
186
224
Chemical industries...........
111
106
111
117
134
152
154
170
174
172
Metalworking industries.......
106
104
10:3
107
103
102
114
124
136
147
Paper
120
128
134
138
1:33
143
147
157
178
178
Vegetr.ble and animal fats.....
124
145
1
121
125
121
136
140
121
129
Miscellaneous
108
116
138
1'29
117
125
133
128
137
147
Total manufacturing
115
121
128
1:30
128
134
1:38
142
152
161
*Excluding production of canned fish, fruit and vegetables.
*Excluding canner production, handicrafts, construction, public works, and miscellaneous
industries.
million has been invested in constructing sugar beet
mills with a combined capacity of 2 million tons at
Sidi Slimane, Doukkala, Beni Mellal, Sidi Allal Tazi,
Mechra Bel Ksiri, Talda, and Zaio. Although these
plants mill only sugar beets, the conversion of the Zaio
mill and one other to cane crushing is planned. Most
of the mills are government owned, but the Zaio mill
has some Italian and Belgium participation.
The sugar industry was probably Morocco's most
rapidly growing industry during the 1960's. As
Morocco had no mills that produced raw sugar, it had
to be imported for the refineries. By 1970, Moroccan
capacity to produce raw sugar had risen to about 35%
of domestic demand. Further expansion of the
industry is not planned, however, as excess capacity
already exists and the cost of growing sugar beets
domestically is relatively high compared to the price of
raw sugar imports. Moreover, a variety of sugar cane
suited to the Moroccan climate has not been
discovered.
The canning industry is one of Morocco's oldest
industries. Almost all canned food products are
exported, accounting for $44 million in export
earnings in 1970. Canned fish output was relatively
stable at about 2.8 million crates during 1967 -69, but
smaller catches, particularly of sardines, reduced
output to only 2 million crates in 1970. Output in 1972
and 1973 will be held down by the downward trend in
catches and the anticipated elimination of preferential
French prices and quotas in January 1973. Production
of canned fruits and vegetables expanded rapidly
during the last half of the 1960's, rising from 51,000
tons in 1965 to 96,000 tons in 1970. Canned olives,
citrus fruits, green peas, green beans, tomatoes, fruit,
and vegetable juices are the main products. Most
canned fruit and vegetables are processed from
let
produce too poor in quality to be exported fresh.
During drought years or when the citrus areas
experience heavy rains and flooding during the harvest
period, larger` shares of crops are canned Before
exporting. In general, the quality of Morocco's canned
products is rather poor.
(2) Textiles Morocco's textile industry is the
largest manufacturing industry after food processing.
Supplying almost all domestic needs, it produces a
variety of items from thread to ready -wear garments of
all sorts and elaborate wool carpets. Although most
products are made from wool or cotton, goods of
polyester, nylon, and other synthetics also are
produced. With the exception of wool, fibers are
generally imported. Most enterprises are small, and
cottage industries account for nearly one -fifth of all
output. The Cofitex Mill at Fes is probably Morocco's
largest textile firm. Casablanca and Fes are the chief
production centers, but textiles are produced in all
major cities.
Protected by high tariffs, textile ootp%it gr. rapidly
during the 1960'x. Almost all out lilt k marketed
locally. Current production is mere than adequate to
supply domestic needs, and during years of slack
demand large stocks are accumulated. However, new
facilities are under construction. The government, in
cooperation with private French interests (the Textile
Company of Fes� COTEF), is building a new plant
that will increase textile capacity 30
(3) Metal working �Metal Nvori is Morocco's
third largest manufacturing industry, accounting for
20% of manufacturing output. Approximately one
fifth of output is produced in the traditional sector
where methods handed down over the centuries are
used to work metal into elaborately tooled trays and a
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great variety of household goods. A few small but
more modern shops manufacture metal items ranging
from automobile parts to kitchen utensils and
furniture. A single firm produces steel from scrap
metal, and ore processing plants are located at many
mines throughout the country. (Ore processing and
steel manufacturing are discussed above, Metals and
Minerals section.)
(4) Chemicals �The chemical industry is centered
in the Moroccan Chemical Complex at Safi which
produces triple superphosphates, diamrnonium
phosphates, and sulfuric and phosphoric acids. The
plant uses phosphate rock from Toussoufia, pyrrhotite
from Kettara, and imported ammonia. Most of its
output was.exported to Western Europe during 1966-
68, but beginning in 1969 price competition in
Western European markets increased and Moroccan
exports declined. Use of low -grade phosphate ores and
of pyrrhotite as a source of sulfur makes Morocco's
chemical industry relatively high cost. As a
consequence, competing in foreign markets has grown
increasingly difficult. Efforts of German technicians to
make production more profitable by extracting copper
and iron from tLe pyrrhotite ore, in addition to sulfur,
have not vet succeeded.
A second fertilizer complex, to be built next to the
existing facilities at Safi, should sharply increase
output. The Moroccan Phosphorus (Maroc Phos-
phore) plant is to have a capacity of 1,000 tons per
day, 60% of which will be in the form of
monammonium phosphate. Other products include
sulfuric and phosphoric acid which will be produced
from domestic phosphates and imported ammonia
and elemental copper.
(5) Automobile assembly� Foreign automobiles
assembled in Morocco supply most of the country's
demand for autos, trucks, buses, motorcycles, motor
scooters, and tractors. The major assembly plant,
producing cars, buses, and tractors, is operated by the
Moroccan Automobile Construction Company
(SOMACA) and is owned 40% by Simea and Fiat, and
60% by local investors. Berliet /Maroc, which is 60%
controlled by a Moroccan Government agency, the
Bureau of Industrial Studies and Investments (BEPI),
is the second largest plant and assembles heavy trucks
and buses. Swedish Volvo trucks and buses and the
British Ford are assembled in Morocco by the African
Automobile Industry Company (SAIDA).
Automobile production increased rapidly during the
mid- 1960's. Passenger vehicle assembly, which
accounts for the bulk of automotive output, rose from
5,598 cars in 1966 to 19,989 in 1970, but dipped
somewhat as domestic confidence declined, following
the abortive 1971 coup d'etat. Further production
increases are anticipated when the planned facility of
the Automobile Assembly Company of Morocco
(SCAMA) is built. The plant will be owned equally by
the Moroccan Government and Renault and will
produce 12,500 Renaults annually. In addition to
supplying the domestic market, Morocco's automobile
industry also exports small numbers of trucks and
tractors, mainly to the People's Republic of China and
to African countries. 'fires are manufactured by
General Tire and a subsidiary of Goodyear Tire and
Rubber, which is 65% American owned and 35%
Moroccan, owned. Located in Casablanca, the
company produces 6:0,000 tires and innertubes
annually and has plans to expand production facilities
by 30 1
b. Construction
The construction industry is expanding rapidly.
Output has grown more than 1005i, since 1961 and
increased 20% in 1970 alone. Large private
investment in housing and tourist facilities and
government investment in dams and irrigation canals
are the chief factors stimulating this growth.
Morocco produces it variety of construction
materials, the most important of which is cement. Of
the 1.4 million tons consumed in Morocco in 1970, 1.3
million tons were produced domestically; the
remainder was imported from Spain. Private interests
accounted for 65% of cement consumption and the
government for 35 The company Limestone and
Cement of Morocco (Chaux et Ciment du Maroc), a
50% Moroccan -50% French firm, produces more than
half of annual production. Located in Casablanca, it
is being expanded and modernized with official
French financial assistance. Other cement plants at
Meknes (300,000 tons), Agadir (150,000 tons), and
Tetouan account for the rest of production. With self
sufficiency in mind, the government is investigating
possible construction of two additional firms: one in
Oujda with Algerian participation and one in
Marrakech.
Other building materials produced locally for
domestic consumption include granite, tile, bricks,
and asbestos. The Oran Materials Complex is one of
the largest construction materials firms and
manufactures most types of construction materials.
Because of limited forest resources, almost all heavy
lumber for construction is imported.
5. Domestic trade (U /OU)
Domestic trade in Morocco has changed little for
generations. Although some cities now have large
department stores, the basic urban retail outlets are
lid
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r
still the small shops in the native quarters. Small farm
and produce markets (Figure 16) and a considerable
amount of barter trade among the peasants are
common. Much of domestic commerce, especially in
the rural areas, is just beginning to involve money.
Efforts to "Moroccanize" commerce were instituted
in 1963, when the government required at least partial
Moroccan ownership of all firms engaged in importing
or distributing goods. Companies that marketed
certain items, such as food and clothing, were required
to be totally owned by Moroccans. Those firms
requiring some sort of technical skill were to he at least
half owned by Moroccans. Although these require-
ments caused considerable concern among foreign
merchants, they were not particularly disruptive
because the government moved quite slowly in
executing them. During the 1960's the departure of
numerous Jews, many of whom were merchants, has
increased Muslim control of commerce.
The government has tried to establish cooperative
trade groups among peasants, but progress has been
quite slow. The first of these projects was a tea and
sugar marketing cooperative in Oujda. In addition, a
few agricultural cooperatives for purchasing supplies
and marketing produce have been established. For the
most part, however, rural trade remains traditional.
C. Economic policy and development
(U /OU)
1. Policy and planning
Since independence, the Government of Morocco
has become more and more involved in the economy.
The government regulates imports through strict
foreign exchange controls and guides private
investment through a series of incentives incorporated
IN
in two investment codes �one for industry and one for
agriculture. 'Through nationalization of European
assets and direct equity investment, the government
has acquired considerable direct participation in the
economy. Some industrial infrastructure, such as
power generating facilities, was transferred to the
government by the French immediately following
independence. Since then, much of the formerly
French held farmland, the citrus exporting industry,
and several industrial enterprises ha.e been
nationalized. In addition, the goverment has
invested in numerous semiprivate firms. State
enterprises dominate mining and energy production
and are extensively engaged in transportation,
communications, sugar milling, and oil refining.
Although these enterprises also participate in most
other manufacturing industries and several agricul-
tural marketing cooperatives, most output in those
sectors is produced by privately owned firms.
Government wages and salaries account for 105i of
GDP. More than 22,000 persons are employed in the
civil and military services and another 50,000 to
100,000 by Promotion Nationole, a work relief
program.
Despite increasing government involvement in the
economy, a substantial foreign business community
still is evident in Morocco. At independence, the
modern sector .vas dominated by French and Spanish
investment. Although some capital flight and a sizable
exodus of Europeans occurred after independence,
much of the foreign business community remained.
No special restrictions have been placed on foreign
firms in general, but the government always has
encouraged Moroccan participation, particularly in
new investment. In a speech in 1970. King Hassan
reiterated the official policy of "Moroccanization,"
.which calls for eventual majority Moroccan ownership
of business enterprises and greater Moroccan
participation at all levels of production. In 1971,
government officials announced that 51% of banks,
insurance companies, and firms importing foreign
brand -name products must be Moroccan owned and
that two- thirds of the seats on the boards of directors
must be held by Moroccans. Some banks and
insurance companies Lave voluntarily complied with
these wishes, but no deadline was set and
Moroccanization continues to proceed at a slow pace.
Meanwhile, new foreign investment, frequently with
state participation, is encouraged and profit
repatriation is generally allowed.
The general scheme of economic planning inherited
from the French was continued after independence.
Originated by the French, the Transitional Investment
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FIGURE 16. Grain market near Rabat (U /OU)

Plan (1957 -59) was designed to prepare Morocco for
future development plans. It was followed by the
ambitious 1960 -64 Five Year Plan that terminated in
inflation and balance of payments difficulties and
gave rise to it period of readjustment (1965 -67). The
1968 -72 Five Year Development Plan was Morocco's
first comprehensive planning effort, projecting not
only public but also private investment for all sectors
of the economy. The next plan (1973 -77) is expected to
follow closely the previous plan's format.
Morocco's first attempt to stimulate economic
growth through planning resulted in a monetary crisis
and yielded only moderate growth. The 1960 -64 plan
called for investment of 145 of GDP and a growth
rate of 6.2% annually, but actual investment averaged
only 11 of GDP and growth reached only 3.7% per
annum. Sharply increased government investment
and ordinary expenditures sponsored much of the
growth, but also caused inflation, balance of
payments deficits, and declining foreign exchange
reserves. Consequently, under IMF guidance, a
stabilization program was incorporated in the 1965 -67
interim plan, which reduced government expenditures
and applied foreign exchange and import controls and
credit limits. By the end of 1965, prices had leveled
off, the government deficit had been sharply reduced,
and the balance of payments was in surplus. However,
continued government austeritv and drought during
1966 and 1967 limited annual expansion of GDP to
only 2.5
Conscious of past mistakes, the government
undertook to increase investment spending under the
1968 -72 plan without incurring large deficits. Tax
rates were increased, ordinary expenditures were held
in check, and growing ordinary budget surpluses were
used to finance an increasing share of government
investment. Although overall budget deficits
continued, they remained relatively constant during
1968 -70. Meanwhile, rising government investment
and greater investment incentives for the private sector
caused total investment as a percent cf GDP to rise
from an average of 11 during 1965 -67 to 14% during
1968 -70. Coupled with favorable weather conditions
and good harvests throughout the period 1968 -71, the
increased investment enabled Morocco to realize a
5.8% average annual growth rate during 1968 -71.
The 1973 -77 plan calls for continuing investment at
about 14% of GDP and a 6.4% average annual growth
rate. With investment at a constant rate, Moroccan
authorities plan a slight shift in investment priorities
away from agriculture to industry and tourism in order
to achieve a higher growth rate. In addition, more
efficient utilization of investment funds within sectors
(i.e., to develop existing capacity rather than construct
new facilities) is expected to boost returns on
investment further.
Agriculture ha.. been the major recipient of
development funds. Under the 1960 -64 plan,
agricultural investment accounted for 29% of
government expenditures, was raised to 33% in the
austere 1965 -67 plan, and was planned at 48% during
1968 -70. However, agricultural investment actually
was only 280 of total investment during 1968 -70.
Despite the magnitude of funds disbursed, little
increase in agricultural output has been obtained.
Most increases have come from expanded cultivated
land areas rather than from higher yields. Nearly 80%
of the funds allocated to agriculture have been used to
construct dams, irrigation canals, and associated
technical assistance projects. Long gestation periods
associated with these large projects, plus administra-
tive shortcomings in implementation during much of
the 1960'x, have held returns to a very low level.
However, administrative problems no" have been
largely overcome and irrigation is being expanded at
an increasing rate. The 1973 -77 development plan
projects it decrease in both the absolute and relative
share of investment devoted to agriculture, but
anticipates increased returns due to more efficient
allocation of funds. Investment in agriculture: is to
total the equivalent of US$570 million, or 18% of
projected investment, during 1973 -77.
Direct government investment in manufacturing,
mining, and energy production under the 1960 -64
plan, was approximately lEi% of the total. The share
was raised to 25% during the 1965 -67 interim plan but
fell to 20% during 1968 -70. Most direct government
investment in the industrial sector is undertaken in
partnership with public or private enterprises. The
largest ic.1ividual projects in which the government
has participated were electric power generation
facilities and sugar mill construction.
The public sector also contributes to industrial
development through state enterprise investment.
Most investment in mining is made by the phosphate
monopoly, largely from internally generated funds.
During 1968 -70, the OCP invested more than $100
million in modernization of the phosphate mines,
which constituted nearly one- fourth of total industrial
investment. In addition, the Tobacco Monopoly, state
sugar mills, and the state -owned railroads undertake
significant investments.
The government encourages private industrial
development by various fiscal incentives under the
Industrial Investment Code. Formulated in 1958 and
revised in 1960 and again in 1970, the Investment
19
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Code assures foreign companies of repatriation rights,
tax relief benefits, government financial assistance,
and fiscal guarantees concerning future taxation. To
receive these special privileges, investments must be
approved by the Investment Commission. The
commission decides what combination of incentives
will he allowed for each individual project, thus
influencing the direction of nvestment. Investments
approved by the commission averaged only about $40
million annually during the 1960's. Although
extensive red tape still impedes implementation of the
Investmen' Code, a somewhat more efficient
processing of requests and approval of several large
projects boosted the investment level to $130 million
in 1970. In 1971, a provision calling for the refund of
turnover taxes on industrial exports .vas added to the
Investment Code. Additional revisions are scheduled
to further encourage developmer of export- oriented
and labor- intensive industry in the near future.
Tourism, a priority development sector, benefits
from direct government investment and from
incentives offered under the Investment Industrial
Code. Although very little was allocated to tourism
under the 1960 -64 plan, subsequent plans recognized
its importance. Tourism accounted for about 3`4' of
central government investment throughout 196 -70,
about 10% of private investment, and 5% of total
investment. The 1973 -77 plan continues to emphasize
tourism, projecting a 70% increase in average annual
tourism investment over 1968 -70 levels. Much of the
increase is slated to come from government sources.
Although precise figures on private investment are
not available, it is believed to account for up to 404 of
total investment. Some private investment occurs in
all sectors of the economy, but it is concentrated in
housing, manufacturing, and tourism. Housing is the
most important individual area of private investment,
absorbing more than one -third of the total, or about
$60 million annually. Manufacturing accoants for
almost another one -third of private investment, and
tourism for 10
Following the 1971 abortive coup, the government
announced a series of reforms to stimulate the
economy and improve income distribution. These
reforms included increased minimum wages and
government salaries, plans for land reform, and
removal of various taxes on consumer goods, such as
sugar, bicycles, and radios. The impact of these
reforms on economic growth and income distribution,
however, does not appear to have been significant.
2. Government finances
Morocco's budget consists of three major divisions:
the General Budget, the Annexed Budget, and the
20
Special Accounts Budget. The General Budget consists
of ordinary revenues and expenditures, direct
investment expenditures, and public debt servicing.
The Annexed Budget covers operations of a number of
public agencies that have not been granted financial
autonomy. Chief among these are the government
printing office, the postal and telegraph services, radio
and television service, and numerous ports including
those of Casablanca, Safi, Kenitra, and Agadir. The
Special Accounts Budget covers a wide range of
extrabudgetary and frequently temporary operations.
K evenues usually are received from a specific source
and are earmarked for a specific use. An example of
this was a special tax called the National Solidarity
Contribution (Contribution de Solidarite Nationale)
which was levied to finance the reconstruction of
Agadir after it was destroyed by an earthquake in the
early 1960'x. Surpluses of the Annexed and Special
Budgets are transferred to the General Budget. The
fiscal year corresponds to the calendar year, and all
transactions are recorded on a cash basis. Allocations
are cancelled at the end of the year, and allocated but
unspent funds under the General Budget cannot be
carried over.
Government revenues applied to the General
Budget are obtained from both direct and indirect
taxes and licensing fees. Indirect taxes (mainly
turnover taxes) and customs duties account forWi of
tax revenues (Figure 17). Direct taxes on certain types
of income, primarily business income, contribute
another 20% to government revenues. Incomes from
state -owned enterprises and from artificially high
prices for sugar also provide revenue.
Personnel salaries account for more than 60 5 /c of
ordinary expenditures. The remainder is used mainly
for interest payments on the public debt (domestic and
foreign) and for the purchase of materials and
supplies. Social services account for the largest portion
of the budget, followed by defense and internal
security and economic services. Of total expenditures
of $544 million in 1970, 38% was allotted to social
services, .11% to defense and security, and 13% to
economic services. Education absorbs more than two
thirds of the social services budget, while agriculture
and development support are the most important
economic services.
Since 1965, Morocco has experienced a stead%
increase in the General Budget surplus. Following a
financial crisis in 1964, ordinary expenditures were cut
considerabiv in 1965. Since then, expenditures have
been limited to increases of 7.9% annually. After 1967,
a campaign against tax evasion and more efficient
collection of tax arrears contributed to larger revenues.
A 1969 hike in tax rates and general economic
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FIGURE 17. Composite government budget and its financing (U /OU)
(Millions of U.S. dollars)
1965
1966
1967
1968
1969
1970
Ordinary revenues
380
406
454
535
592
649
Direct taxes
93
103
108
138
130
145
Indirect taxes
103
113
119
137
187
213
Customs duties
74
90
94
90
102
118
Registration and stamp duties....
2224
25
27
34
42
Govern lent properties...........
9
9
10
10
11
12
State monopolies
28
34
38
76
61
62
Sugar levy and post, telephone,
telegraph surplus
8
14
33
24
:36
28
Other
43
19
27
33
31
29
Ordinary expenditures
-390
-401
-415
-484
-514
-544
Debt service
13
29
27
37
:39
42
Personnel
235
246
265
284
31:3
337
Material and supplies............
95
92
96
106
110
117
Other
47
34
27
57
52
48
Ordinary deficit /surplus............
-10
5
39
51
78
105
Capital expenditures
-136
-122
-181
-203
-219
-248
Net extrabudgetary accounts
-14
14
26
-45
-21
2
Overall deficit
160
-103
1138
197
1132
141
Financing:
Increase in treasui_ and postal
checking deposits
:38
29
31
53
3
-4
Internal borrowing
35
19
19
47
67
43
Foreign loans
85
51
58
4:3
50
139
Central bank credit
9
1
60
54
42
33
Treasury accounts with central
bank
11
:3
N'egl
Negl
.Veal
Vcgl
*Including amortization on public debt
*Includes errors and omissions.
prosperity contributed to revenue increases during
1969 -70. Revenue increases were mainly responsible
for the improvement in the General Budget balance
from a $10 million deficit in 1965 to a $105 million
surplus in 1970.
Increasing General Budget surpluses have only
partially offset im estment expenditures, and the total
budget hit run it deficit for years. Dome
borrowing, either through the sale of government
securities or recourse to the central bank and net
treasury deposit inflows, finance most of these deficits.
Foreign aid is also a significant source of funds. The
overall deficit declined from $160 million in 1965 to
$141 million in 1970, but repeal of the sugar tax and a
15% pay raise for government workers in the last half
of 1971 probably reversed this downward trend. In
part the cost of these measures will be offset by a
newly instituted progressive tax on incomes over
$10,000.
3. Money and banking
Morocco has an extensive banking system including
a central bank, 18 commercial banks, and a postal
checking system. Most of the commercial banks %were
originally branches of foreign (usually French) banks,
but all have now been incorporated in Morocco.
Nevertheless, manv domestic banks still have some
foreign participation, and some foreign owned branch
banks remain, including branches of two U.S. banks,
First National City Bank of New Y A City and Bank
America.
Morocco also has five specialized financial
institutions whose main function is to make direct
equity investments and to extend credit for
development projects. These institutions are the
National Bank for Economic Development (BLADE),
the Bank of Deposit and Management (CDG), the
Property and Real Estate Credit (CIH), the Moroccan
Merchants Bank (CM M and the National
Agricultural Credit Fund (CNCA). The main
resources of these institutions are private and state
enterprise savings, government loans and grants, and
foreign loans. These specialized financial institutions
provide about one -third of all credit extended in
Morocco. Established in 1959, BNDE is the largest
institutional source of medium and long -term credit
21
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for industrial enterprises in Morocco. It also suhscribes
to shares in new or expanding businesses, helps to set
up new companies, guarantees investments made by
other institutions. and discounts medium -term credits
made by commercial banks. Created by the French to
finance housing and land purchases for Europeans,
CIH provides similar services to the tourist industry.
CNCA is involved primarily with modern sector
agricultural enterprises.
The Bank of Morocco, the central bank, has the
main responsibility for implementing all monetary
and credit policy. It is assisted in formulating policies
by the Committee of Credit and Market I inance
(Comite du Credit et du Marche Financier), a special
committee chaired by the Minister of Finance with
representation from the Bank of Morocco, the
planning agency, the specialized credit institutions,
the commercial hanks, and selected bankz�r
associations. The central bank acts as banker to the
government, to commercial hanks, and to certain state
enterprises. Its control over the banking systern is
exercised through its role in setting rediscount ceilings
and minimum reserve requirements. In addition, it
issues periodic instructions to the banks limiting their
rate of credit expansion to the private sector.
The Bank of Morocco maintains effective control
over the monetary sector. Although large government
deficits and large central hank borrowing gave rise to
mild inflation in the mid 1960'x, expansion of the
money supply %vas held to 8.4% per annum during
196 -71, and the consumer price index rose slowly
from 108 in 1965 to 115 in 1971.
1960
TOTAL LABOR FORCE
4,485,000
Until December 1971, the value of the Moroccan
dirlham was 5.06 to US$L In March 1972, the selling
rate %vas D114.59 to US$I.
4. Manpower
Although Morocco suffers from serious unernp!oy-
ment, skilled labor and managerial expertise are in
short supple. Levels of productivity are generally low
and frequently are not fully offset by the low wage
scales which predominate in most industries. Many of
Morocco's industries cannot compete effectively in
foreign markets because of their high production costs
and would have difficulty competing in domestic
markets were it not for high protective tariffs. Because
of the lack of skilled labor, new industries tend to be
capital intensive. Most of the active labor force is
employed in the agricultural sector (Figure 18).
Although the number of Moroccans occupying
managerial. positions is increasing, much Moroccan
manufacturing and commerce is still in the hands of
Europeans.
Unskilled labor continues to migrate to the cities
Nvhere unemployment rates are rising. Lured by the
excitement of the big city and hopeful of escaping
from a %vay of life based on subsistence agriculture, the
unskilled rural worker is frequently unable to find
employment. Official statistics show that unemploy-
ment rose from about 7547' of the labor force in 1960 to
about 16 c' in 1970, while urban unemployment rose
from 20% to 30 during the same period. Actual
unemployment is probably far higher (it \vas
Promotion Nationale
Government
Commerce
Transportation.
'Communications,
and Other Services
Construction
and Public Works
\Industry
Mining
Agriculture
100% TOTAL LABOR FORCE
2
n 5,850,000
69
Estimated
This estimate, based on
official statistics, is low.
Unemployment .s probably about 20
FIGURE 18. Distribution of labor force by
22
anch of thr ecor- I! (C`
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100%

estimated at 209i of the labor force by the U.S.
Embassy in 1971), and the problem is exacerbated by
the rate of population growth, which continues to
accelerate. Technical training is limited to about 2,000
adults in training centers operated by the Ministry of
Labor, Social Affairs, Youth, and Sports and no other
job training, with the exception of traditional
handicraft apprenticeships, is available.
Government efforts to alleviate unemployment
include encouragement of worker emigration, a work
relief program, and more extensive education
programs. The number of students of working age rose
from 136,000 in 1964 to 221,000 in 1968, thereby
absorbing about 14 of the increase in the working
age population. H4..mever, the shortage of school
facilities and qualified teachers limits further
expansion of education in the cities, while income
levels and social structure discourage extended
schooling in rural areas. In addition, the stagnation of
primary school enrollment since 196.1 makes all
increase in school enrollment at higher levels more
difficult.
Worker emigration rose rapidly during the late
1960's, from 13,000 in 1968 to about 33,000 in 1970.
Emigration eliminated about 20ii of the natural labor
force increment in 1970, but many of those going
abroad were among the more skilled. The number of
Moroccans .working abroad in 1970 was estimated at
220,000, or about 45ve of the total Moroccan labor
force. About two thirds are in France and most of the
remainder in the Netherlands, Germany, Libya, the
United Kingdom, and Belgium. Emigration agree-
ments, which channel employers' requests through the
Moroccan Ministry of Labor, Social Affairs, Youth,
and Sports have been signed with five countries and
should facilitate even greater emigration in the near
future.
Government efforts to employ unskilled workers in a
work relief program (Promotion Nationale) have made
little progress. Employment under this program has
remained between 80,006 and 100,000 since 1968. It
employs workers in such projects as road construction
and reforestation and benefits mainly the rural
population. Efforts to extend the program to the urbac
centers have had little success. Recently, Morocco
discontinued use of the P.L. 480 wheat as in -kind
payment to workers, and this step may even reduce the
Promotion Nationale program.
D. International economic relations
1. Foreign trade (U /OU)
Morocco's foreign trade balance is nearly always in
deficit. The only trade surplus realized during the
1960's occurred in 196:5 when newly introduced
import controls caused a temporary decline in imports.
During 1961 -70 imports expanded at an average
annual rate double that of exports, and the trade
deficit grew from $32 million in 1960 to $198 million
in 1970. Larger purchases of capital equipment and
semifinished goods accounted for most of the increase
in imports. Although e +,ports experienced it spurt of
relatively rapid growth during 1968 -70 as agri ultural
and manufactured exports expanded, declining
mineral exports and generally slow expansion of other
exports limited overall average export growth to a
relatively low rate.
Morocco exports many primary products (Figure
19), most of which are subject to fluctuating world
prices. Agricultural products and minerals account for
80% of export earnings, and nearly half of
manufactured exports are processed foods and
minerals. Phosphates and citrus Live long been
Morocco's major exports. Although mineral exports
have stagnated, phosphates remain the single largest
export, accounting for almost one fourth of total
export earnings in 1970. Declining world prices since
1965, duc to increased U.S. exports, contributed to
lower phosphate earnings, but by 1970 phosphate
exports had increased sufficiently to offset the price
declines. Citrus prices fluctuate depending on the size
of the Spanish harvest and on the timing of domestic
production. An early crop enables Morocco to export
several .weeks in adva nce of competing export
countries and thus obtain higher prices.
The prospects for a substantial increase in export
earnings are uncertain. Mechanization of phosphate
mines is expected to cause a rapid increase in output
through the mid 1970'x. However, this increase
probably will be at least partially offset by
price declines as production from the largf Spanish
Saharan deposits increases. Other mineral exports will
probably continue to stagnate. Citrus exports to the
Western Europe market are expected to expand only
slowly, but new markets are being developed
elsewhere, particularly in the U.S.S.R. and Eastern
Europe. Most other agricultural exports should
increase as irrigation and output are expanded.
Exports of manufactured goods rose rapidly after
1967, but many of Morocco's largest manufacturing
industries are still unable to meet foreign competition.
Canned fish exports are one of those expected to
decline after French preferences are removed in 19 73.
Future earnings will depend in large measure on
Morocf. :.'s ability to develop new export industries.
Morocco depends on imports to supply most of the
fuel and raw material inputs for its manufacturing
sector, most capital equipment, and substantial
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FIGURE 19. Enports (U /OU)
(Millions of U.S. dollars)
na Data not available.
amounts of food and consumer goods (Figure 20).
Semifinished goods are the largest import category,
accounting for one fourth of the import bill. Capital
goods are the second largest and, reflecting recent
increases in investment, the most rapidly growing
FIGURE 20. Imports (U /OU)
(Millions of U.S. dollars)
import category. Food imports fluctuate widely,
depending on domestic cereal harvests. However, due
to a government sponsored increase in sugar beet
cultivation, imports of sugar fell from $52 million in
1965 to $27 million in 1970. Imposition of more
1960 1965 1966 1967 1968 1969 1970
Food
1960
1965
1966
1967
1968
1969
1970
Agricultural
151
208
203
200
217
242
236
Citrus fruits
36
62
66
68
83
77
71
Tomatoes
19
27
29
35
28
29
36
Other fresh vegetables
na
19
18
17
16
1:3
17
Legumes and pulses
na
18
11.
10
19
19
26
Wine
10
17
14
12
5
7
8
Other
86
65
65
58
66
97
78
Minerals
169
170
154
150
149
153
157
Phosphates
84
113
106
108
108
109
11:3
Lead
11
20
15
12
13
13
14
Iron
7
8
6
7
5
6
6
Other
67
29
27
23
23
25
24
Manufactured goods
62
58
71
74
89
95
95
Canned fish
21
14
24
2:3
26
25
25
Processed fruits and vegetables.........
na
13
11
15
15
20
19
Fertilizers
None
None
8
10
14
10
7
Handicrafts
ea
na
3
4
4
5
8
Other
41
31
22
22
30
35
:36
Total
382
436
428
424
455
490
488
na Data not available.
amounts of food and consumer goods (Figure 20).
Semifinished goods are the largest import category,
accounting for one fourth of the import bill. Capital
goods are the second largest and, reflecting recent
increases in investment, the most rapidly growing
FIGURE 20. Imports (U /OU)
(Millions of U.S. dollars)
import category. Food imports fluctuate widely,
depending on domestic cereal harvests. However, due
to a government sponsored increase in sugar beet
cultivation, imports of sugar fell from $52 million in
1965 to $27 million in 1970. Imposition of more
1960 1965 1966 1967 1968 1969 1970
Food
89
114
131
143
124
92
115
Soft wheat and flour
14
20
42
6:3
45
10
26
Sugar
:35
52
38
29
24
22
27
Ither
40
42
51
51
55
60
62
Fuel and raw materials
70
87
86
83
106
103
122
Edible oils
na
23
19
12
17
9
16
Crude oil
14
16
16
21
20
23
Oil products
20
4
8
9
12
12
15
Lumber
8
13
15
14
16
16
20
Other
42
33
28
32
40
46
48
Semifinished products
87
91
103
109
124
150
172
Metal products
na
27
28
34
36
41
57
Textile yarns
na
11
18
15
17
24
21
Other
Ila
53
57
60
71
85
94
Capital equipment
56
70
76
105
117
134
165
Industrial equipment
53
33
31
67
69
85
101
Other
3
37
45
38
48
49
64
Consumer goods
112
69
82
78
87
97
112
Automobiles and auto parts............
17
11
12
17
27
33
36
Other
55
48
51
47
55
59
71
Textiles
40
10
19
14
5
5
5
Total
414
431
478
518
558
576
686
na Data not available.
24
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stringent import controls in 1965 and expanded
domestic production, particularly of textiles, held
consumer goods imports in check during the 1960's.
Composition of trade has changed far less than
trufing partners (Figure 21). "Trade with France,
traditionally Morocco's largest partner, has dimin-
ished. A break in diplomatic relations and suspension
of French aid in the mid- 1960's, in addition to loss of
S0111(1 special privileges in the I rench market,
encouraged Morocco to seek other trading partners.
New export markets, primarily for citrus, have been
developed in the U.S.S.R. and Eastern European
nations, while Western European nations, the United
States, and the Li.S.S.R. increased in importance as
suppliers to Morocco. Imports from the U.S.S.R. are
primarily crude oil and capital goods. Most imports
3;,
Z'7
Millions of U.S. Dollars
IMPORTS
l00% 100
France
Other EEt
ited Kingi
nited Stat
U.S.S.R.
ier Commi
ountries
Other
EXPORTS
l00%
Fra
Othe
ao1
/United
United
3 U.S:
Other G
3 '3>" Count
ISM
FIGURE 21. Direction of trade (U /OU)
a
from the United States are aid financed food
shipments and capital goods. Other than France, only
Cuha experienced a significant drop in sales as sugar
purchases declined sharpl%.
Traditional trading ties to Western Europe have
been formalized under an Association agreement with
the FTC. Implemented in September 1969, the
agreement has a duration of 5 years but can be
reviewed during the first 3 years. Moroccan authorities
Dope to broaden the agreement to include aid and
labor policies as well as the commercial arrangements
now covered. Under the agreement, the I ?TC reduced
its common external tariffs on many Moroccan
agricultural exports and allowed most Moroccan
industrial products to enter the EEC duty free. In
return. _Morocco reduced import tariffs and
established quotas for certain goods imported from the
I -'EC. Although it is too early to judge the impact of
this agreement on Moroccan trading patterns, it is not
expected to be great. Many large Moroccan exports.
including mineral products, tomatoes, and potatoes,
are not covered, and most other agricultural
preferences have also been granted by the EEC to
Morocco's major competitors. Although trade with
France may decline further as french preferences are
replaced, the EEC is likely to remain Morocco's
largest export marke Industri preferences have
already figured in the increase in manufactured
exports, and they may grow in importance as Morocco
attempts to develop export industries.
2. Balance of payments (C)
Morocco's chronic trade deficit is only partially
offset by other current earnings and private capital
flows. Consequently, substantial foreign assistance is
require Morocco registered an overall balance of
payments deficit in most years during 1960 -69, but
more recently a small surplus has been realized each
year (Figure 22).
Although the net contribution of services to
Morocco's' balance of payments had been negative
before 196 rapidly growing receipts from tourism
and remittances front Moroccan's working abroad
subsequently have produced a positive balance in the
services account. Government sponsored emigration
has caused it rapid rise in workers' remittances from
$15 million in 1967 to $45 million in 1970. Requests
for labor transmitted through the Moroccan
Government of Labor channel more than 30,000
workers abroad each year. "Tourists to Morocco,
attracted by beaches, picturesque coutntrvsi(J -end the
lure of an ancient eastern culture, Iavelt-; it in
25
l00%
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414 Million
1960
684 Million
1971
487 Million
1970

FIGURE 22. Balance of payments, 1960 -70 (U /OU)
(Millions of U.S. dollars)
number from 380,000 in 1965 to 750,000 in 1970. Net
tourist receipts rose from $51 million to $74 million in
the same period.
Net private capital flows are small and usually
negative. Long -term credits and direct investments are
offset by capital repatriation in most years. In 1970,
however, net private capital inflows were a sizable $52
million. Although direct private investment of about
$20 million was double usual inflows, most of the net
inflow of private capital was due to rescheduling
short-term supplier credits. The net inflow from that
source alone was over $50 million.
Morocco relies upon foreign assistance, mainly from
Western nations, to finance most of its current account
deficit. With the exception of 1965, when aid
increased to $113 million, foreign assistance grew very
slowly during the 1960'x. However, more efficient
project management and renewed French assistance
caused net aid disbursements to increase from $70
million in 1969 to $116 million in 1970. Morocco's
foreign debt service is very low, equaling only about
8% of foreign exchange earnings.
France and the United States have alternated as the
largest supplier of foreign assistance to Morocco. U.S.
disbursements have ranged from $30 million in 1957
to $80 million in 1960 but have been relatively
constant at about $55 million annually since 1968.
Most U.S. aid takes the form of P.L. 480 food
shipments (mainly vegetable oil and wheat), which
increase during drought years. Following independ-
ence, French aid was constant at $15 million through
1961 but increased rapidly during the early 1960'x,
reaching $90 million in 1964. However, strained
political relations stemming from the Ben Barka
murder scandal (see Government and Politics chapter,
Foreign Policies) resulted in the suspension of new aid
26
commitments after 1965. Consequently, French aid
declined to about $20 million in 1968. With the
improvement in relations in 1969, French assistance
rose in 1970 to $24 million, or 18% of total aid inflows.
Like the United States, France supplies Morocco with
wheat on concessionary terms, finances a variety of
agricultural and industrial projects, and supplies
technical assistance in numerous fields.
West Germany and the World Bank also contribute
sizable sums, each accounting for about 1051 of total
aid disbursements in 1970. Although still small in
comparison to Western aid, Soviet assistance has
increased considerably in the late 1960's and
accounted for nearly 10% of total aid inflows in 1970.
Almost all of the Soviet assistance is used to finance
various stages of the Jerada electric powerplant. A
number of other nations, including Kuwait, Iran,
Italy, and other European states also contribute funds
to finance a variety of projects and technical
assistance.
:3. Regulations on trade and payments (U /OU)
Morocco regulates foreign expenditures through an
annual General Import Program and through
authorization of foreign exchange transfers. Estab-
lished in May 1967, the General Import Program
consists of three lists (A, B, C) applicable to all
countries. Last A comprises items that may be
imported without authorization or quantitative
restrictions, while imports under list B are subject to
licensing and frequently to quotas. Used to regulate
balance of payments disbursements, quotas on some
goods are quite flexible but others, designed to protect
domestic industries, are rigid. List C covers prohibited
items, mainly luxury goods, although imports of such
goods sometimes are allowed. Most monetary transfers
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1960
1961
1962
1963
1964
1965
1966
1967
1968
19119
1970
Exports
382
363
:353
:382
4:39
436
428
424
455
490
488
Imports
414
450
442
462
46:3
431
478
518
558
5713
686
Trade balance
-32
-87
89
-80
-24
5
50
-94
103
-86
198
tourism
:3
-6
1
6
27
51
42
42
4:3
69
74
Workers' remittances........
na
na
na
ria
na
na
-5
15
12
3:3
45
Other services
49
9
16
16
40
-65
-70
-56
-44
-61
-69
Current account
+20
-84
104
_90
:37
-9
-83
-93
-92
-45
148
Capital flow
56
51
6:3
62
71
1115
69
74
66
65
168
Private
-2
1
1
2
2
2
6
9
14
-5
52
Public
58
52
64
60
69
113
751
83
81
70
116
Errors and omissions.........
-8
-10
20
16
95
-61
Ncyl
1
0
0
0
Change in reserves...........
+68
-43
-21
-44
-61
+45
14
-20
211
+20
+20
na Data not available.
number from 380,000 in 1965 to 750,000 in 1970. Net
tourist receipts rose from $51 million to $74 million in
the same period.
Net private capital flows are small and usually
negative. Long -term credits and direct investments are
offset by capital repatriation in most years. In 1970,
however, net private capital inflows were a sizable $52
million. Although direct private investment of about
$20 million was double usual inflows, most of the net
inflow of private capital was due to rescheduling
short-term supplier credits. The net inflow from that
source alone was over $50 million.
Morocco relies upon foreign assistance, mainly from
Western nations, to finance most of its current account
deficit. With the exception of 1965, when aid
increased to $113 million, foreign assistance grew very
slowly during the 1960'x. However, more efficient
project management and renewed French assistance
caused net aid disbursements to increase from $70
million in 1969 to $116 million in 1970. Morocco's
foreign debt service is very low, equaling only about
8% of foreign exchange earnings.
France and the United States have alternated as the
largest supplier of foreign assistance to Morocco. U.S.
disbursements have ranged from $30 million in 1957
to $80 million in 1960 but have been relatively
constant at about $55 million annually since 1968.
Most U.S. aid takes the form of P.L. 480 food
shipments (mainly vegetable oil and wheat), which
increase during drought years. Following independ-
ence, French aid was constant at $15 million through
1961 but increased rapidly during the early 1960'x,
reaching $90 million in 1964. However, strained
political relations stemming from the Ben Barka
murder scandal (see Government and Politics chapter,
Foreign Policies) resulted in the suspension of new aid
26
commitments after 1965. Consequently, French aid
declined to about $20 million in 1968. With the
improvement in relations in 1969, French assistance
rose in 1970 to $24 million, or 18% of total aid inflows.
Like the United States, France supplies Morocco with
wheat on concessionary terms, finances a variety of
agricultural and industrial projects, and supplies
technical assistance in numerous fields.
West Germany and the World Bank also contribute
sizable sums, each accounting for about 1051 of total
aid disbursements in 1970. Although still small in
comparison to Western aid, Soviet assistance has
increased considerably in the late 1960's and
accounted for nearly 10% of total aid inflows in 1970.
Almost all of the Soviet assistance is used to finance
various stages of the Jerada electric powerplant. A
number of other nations, including Kuwait, Iran,
Italy, and other European states also contribute funds
to finance a variety of projects and technical
assistance.
:3. Regulations on trade and payments (U /OU)
Morocco regulates foreign expenditures through an
annual General Import Program and through
authorization of foreign exchange transfers. Estab-
lished in May 1967, the General Import Program
consists of three lists (A, B, C) applicable to all
countries. Last A comprises items that may be
imported without authorization or quantitative
restrictions, while imports under list B are subject to
licensing and frequently to quotas. Used to regulate
balance of payments disbursements, quotas on some
goods are quite flexible but others, designed to protect
domestic industries, are rigid. List C covers prohibited
items, mainly luxury goods, although imports of such
goods sometimes are allowed. Most monetary transfers
APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200080028 -7

must be authorized by government authorities.
Capital repatriation by foreign nationals is generally
allowed.
Restrictions on trade and payments gradually have
been streamlined since 1965. Foreigners are permitted
to transfer a portion of their wages home, and
Moroccans are permitted to take some money abroad.
In 1967 import regulations were revamped and
imports liberalized under the new General Import
Program. As balance of payments surpluses occui5eed
in the late 1960's, imports were further liberalized, and
many goods were moved from list C to list B and from
list B to list A. Consequently, more than three fourths
of the items now imported into Morocco are not
subject to limitation. Allowances for Moroccans
traveling abroad as well as the amount foreigners can
transfer out of Morocco were increased in the late
1960's.
27
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Glossary
(U/OU)
ABBREVIATION
FOREIGN
ENGLISH:
BEPI
Bureau d'Etudes et de Participation
Bureau of Industrial Studies and In-
I ndustrielle
vestments
BNDE
Banque Nationale pour le Develop
National Bank for Economic De-
pement Economique
velopment
BRPM
Bureau de Recherches et de Participa-
Mining Exploration and Investment
tions Minieres
Bureau
CAAMSA
Compania Azucarera Alcoholera Mor-
Moroccan Sugar and Alcohol Cor-
roqui S.A.
poration
CDC
Caisse de Depot et de Cestion
Bank of Deposit and Management
CIH
Credit Immobilier et Hotelier
Property and Real Estate Credit
CMM
Caiss- Marocain des Marchos
Moroccan Merchants Bank
CNCA
Caisse Nationale de Credit Agricole
National Agricultural Credit Fund
COSUMAR
Compagnie Sucriere Marocain de
Moroccan Sugar Refining Company
Ra f f inage
COTEF
Compagnie Textiles de Fez
Textile Company of Fes
DERRO
Economic and Rural Development of
the Western Rif
ENT
Ente Nazionale Idrocarburi
Italian National Fuels Authority
OCE
Office de Commercialization et d'Ex-
Marketing and Export Office
portetion
OCP
Office Cheri f ien des Phosphates
Moroccan (Sharifian) Phosphates
Office
OIM
Omnium Industriel du Maghreb
Maghreb Industrial Trading Com-
pany
OMCI
Omnium Marocain Commercial et
Moroccan Commercial and Indus
Industriel
trial Trading Company
ONE
Office National d'Electricite
National Electricity Office
ONP
Office National des Peches
National Fisheries Office
PRAM
Project to Reorganize Nonirrigated
Agriculture in Morocco
SAIDA
Societe Africaine pour r1ndustrie Auto-
African Automobile Industry Com-
mobile
pany
SAMIR
Societe Anonyme Marocain Italienne
Moroccan Italian Refining Corpora
de Ra f f inage
tion
SCAMA
Societe de Construction Automobile
automobile Assembly Company of
Marocain
Morocco
SCP
Societe Cheri f ienne des Petroles
Moroccan (Sharifian) Petroleum
Company
SOMACA
3ociete Marocain do Construction
Moroccan Automobile Assembly
Automobile
Company
SOMETAL
Societe Metallurgique Africaine
African Metallurgical Company
SUTA
Sucrerie du Talda
Talda Sugar refinery
28
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CONFIDENTIAL
CONFIDENTIAL
APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200080028 -7