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Monday 17 February 2020

Morocco Made Important Progress in Creating Conditions for Higher and More Inclusive Growth, IMF Chief

Vocal synthesis
Morocco Made Important Progress in Creating Conditions for Higher and More Inclusive Growth, IMF Chief

Managing director of the International Monetary Fund (IMF) Kristalina Georgieva said that Morocco has made important progress in creating the conditions for higher and more inclusive growth, despite a challenging external environment.

In an interview with MAP, ahead of her working visit to Morocco on Monday, Georgieva added that "economic resilience has been strengthened, and growth is expected to accelerate gradually over the medium term."

"But sustained reforms will be needed—growth, currently below 3 percent, is not quite strong enough to create sufficient jobs and reduce social and regional inequalities. Unemployment remains high, particularly among young people and women," she noted.

The Moroccan authorities are committed to sustaining sound policies. Key reforms have accelerated since 2018, especially to improve public governance (such as through the promotion of e-government) and the business environment (with increased domestic competition), she underlined.

Referring to her upcoming visit to Morocco, the first since assuming the position of IMF managing director in Oct. 2019, Georgieva said that she will seek to highlight the strong partnership between Morocco and the IMF and to prepare, together with the authorities, for the upcoming 2021 IMF-World Bank Annual Meetings in Marrakesh.

"We strongly support our partners in the government to prioritize social inclusion, education reforms, fiscal decentralization and other measures for more private sector-led, inclusive, and job-rich growth," said the IMF official, stressing that these reforms will be key to raise Morocco's growth potential, together with continued efforts to strengthen governance and reduce corruption as the authorities have recognized.

"The government’s efforts will also require stepped up tax reforms following the 2019 national tax conference, continued progress toward a flexible exchange rate regime to limit the potential impact of external shocks on the economy, and further improvements to the coordination and targeting of social programs," she noted.

Morocco is a model of true cooperation between the IMF and its members, with close engagement through a precautionary facility. This mechanism serves like a line of credit, to give the country a fallback and reassure investors, and to enhance economic resilience, growth, and integration into the world economy, she said.

The Annual Meetings will be an important milestone for Morocco and the IMF and will allow us to reaffirm our close partnership, she reaffirmed.

The IMF chief went on saying that Morocco is an ideal venue for the IMF-World Bank Annual Meetings—one of the most important and inclusive gatherings of top economic policymakers in the world, underlining that "your country is an increasingly important economic player and a gateway to Africa and the Middle East. We are grateful it has kindly agreed to host this gathering."

She explained that the Annual Meetings include a collection of events around the yearly gathering of the Boards of Governors of the IMF and World Bank, representing the 189 member countries. The Meetings bring together central bankers, ministers of finance, academics, private sector executives, parliamentarians, civil society organization (CSO) representatives, and journalists to discuss issues of global concern, including the economic outlook, financial stability, tax and spending policies, jobs and growth, poverty eradication, development, and aid effectiveness.

"Every three years, one of our member countries hosts our Annual Meetings, with about 12,000 people attending for a weeklong series of events," she said, recalling that the last time the Annual Meetings were held in Africa was in 1973, in Nairobi, Kenya.

The Meetings offer an unparalleled platform for Morocco to project itself onto the global stage, showcase its achievements, and highlight its economic potential for investment and growth—potentially bringing benefits that last long after the Meetings are over, the IMF managing director underscored.

On the Maghreb's weak economic integration, she hoped that ongoing diplomatic efforts will help achieve a peaceful and rapid resolution of the conflict in Libya. "Reducing security threats and geopolitical uncertainty more broadly would strengthen confidence in the Maghreb region".

"The Maghreb is one of the least interconnected regions in the world economically, and we see an enormous potential for greater integration. The benefits would be significant. Our research shows that it could contribute to raising growth in each Maghreb country by 1 percentage point on average in the long term. By boosting investment, trade, and growth, greater integration would help create jobs, which are much needed in a region where one in four young people is unemployed," she concluded.

MAP 15 February 2020