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International Monetary Fund. Middle East and Central Asia Dept.
Le changement climatique est à la fois une menace considérable et l’occasion de nouvelles possibilités de développement pour le Maroc. D’une part, le Maroc est l’un des pays du monde les plus touchés par le stress hydrique et la pénurie d’eau est un sérieux obstacle qui empêche le pays de satisfaire son ambition d’aller vers un nouveau modèle de développement. Les autorités prévoient d’accroître les investissements en infrastructures hydriques, mais elles devront les compléter par des réformes de gestion de la demande pour rapprocher le prix de l’eau de son coût réel et susciter un changement de comportement des usagers. D’autre part, le Maroc peut tirer parti de l’abondance et de la compétitivité de ses ressources énergétiques renouvelables pour réduire sa dépendance encore prononcée à l’égard des combustibles fossiles. Le processus de décarbonation de son modèle énergétique nécessiterait de considérables investissements dans les énergies renouvelables, qui devraient être essentiellement assumés par le secteur privé. Ce processus nécessiterait également de profondes réformes réglementaires, notamment de nouvelles mesures pour libéraliser le secteur de l’électricité. La pleine exploitation de ce potentiel énergétique renouvelable pourrait permettre au Maroc de réduire sa dépendance à l’égard des combustibles importés, de renforcer la compétitivité de ses entreprises sur les marchés voisins qui s’engagent sur la voie de la transition écologique (notamment l’Union européenne) et de contribuer à la création d’emplois. Le fort séisme qui a frappé le Maroc le 8 septembre, entraînant un lourd tribut en termes de vies humaines et de dégâts matériels, souligne l’importance de renforcer la préparation et la résilience du pays face aux catastrophes naturelles, notamment au changement climatique.
International Monetary Fund. Middle East and Central Asia Dept.
Climate change is both a major threat and a source of opportunities for Morocco’s development. On one hand, Morocco is one of the world’s most water-stressed countries, and water scarcity is a serious constraint to the country’s ambition to transition to a new model of development. The authorities are planning to boost investment in water infrastructure, but this should be complemented by demand management reforms that bring the price of water closer to its actual cost and induce a shift in consumption behavior. On the other hand, Morocco can take advantage of its abundant competitive renewable energy resources to reduce its still high dependence on fossil fuels. Decarbonizing the energy matrix would require significant investments in renewable energy, which should be largely shouldered by the private sector. It would also require deep regulatory reforms, including further efforts to liberalize the electricity sector. Fully exploiting this renewable energy potential could reduce Morocco´s reliance on imported fuels, help Moroccan firms’ competitiveness in neighboring markets that are embracing a green energy transition (most notably the European Union), and help create jobs. The strong earthquake that hit Morocco on September 8, exerting a heavy toll in terms of human lives and physical damages, highlights the importance of strengthening the country’s preparedness and resilience to natural disasters, including from climate change.
Hippolyte W. Balima, Olivier Bizimana, and Ananta Dua
This paper assesses Morocco’s potential output and the scope for structural reforms to reverse the downward trend in economic performance observed since the Global Financial Crisis. Using multivariate filtering (MVF) techniques, our analysis finds that the downward secular trend in potential growth was primarily driven by the decline in the contribution of labor inputs. We then combine production function and general equilibrium model approaches to provide estimates of the potential macroeconomic impact of Morocco’s structural reform agenda. The results suggest that the planned structural reforms could deliver sizable output gains in the medium to long term with reforms that would reduce the large gender gap in Morocco’s labor market yielding the greatest payoffs.
International Monetary Fund. African Dept. and International Monetary Fund. Middle East and Central Asia Dept.

Abstract

On the occasion of the World Bank-IMF Annual Meetings’ return to the African continent after 50 years—specifically to Marrakech, Morocco—this Special Issue on Africa discusses economic developments for the entire continent. After four years of crises and at the close of another difficult year, recent events, including the devastating earthquake in Morocco, severe floods in Libya, and the impact of Cyclone Freddy in Malawi, have underscored the continent’s ongoing vulnerability to natural disasters and the need to build resilience. In the near term, there are tentative signs that the outlook in many countries in Africa is improving. Inflation is generally easing, economic activity is starting to pick up, and fiscal imbalances are gradually moderating. However, significant challenges remain, and it is too early to celebrate. For too many countries, inflation is still too high, debt vulnerabilities remain elevated, and medium-term growth rates are too low. Recent episodes of political instability also underscore the fragility of conflict-affected states. Against this background, Africa’s policymakers should prioritize efforts to boost resilience by ensuring macroeconomic stability and accel-erating structural reforms to foster stronger, more inclusive growth. The international community should maintain and enhance a cooperative approach to the provision of global public goods. In the case of Africa, it is essential to support the region’s most vulnerable climate- and conflict-affected states.

Abstract

Throughout the past two decades, Morocco has faced several external and domestic shocks, including large swings in international oil prices, regional geopolitical tensions, severe droughts, and most recently the impact of the pandemic and the economic fallout from Russia’s invasion of Ukraine. Despite rough waters, the government stayed the course and remained focused not only on immediate stability, but also on the long-term needs of the Moroccan economy. This involved the adoption of a series of difficult measures, like the elimination of energy subsidies, and a strategy aimed at improving the country’s infrastructure, diversifying the production and export bases by attracting foreign investment, and modernizing the governance structure of the public administration. The road to higher and more inclusive growth, however, remains steep. Despite gains in poverty reduction, literacy and lifespans, Morocco economy continues to face a high share of inactive youth, large gaps in economic opportunities for women, a fragmented social protection system, and remaining barriers to private sector development. An ambitious reform agenda is needed to better meet the aspirations of Moroccans, by making economic growth stronger, more resilient and more inclusive, particularly to provide greater opportunities for young, women, and entrepreneurs. Morocco appears well positioned to address these challenges, and indeed, the country has recently sought to define and pursue a new “model of development”, through national debates and a more inclusive approach to reform. Significant reforms have been announced recently that revamp both the social protection system and the SOEs business model. This book draws lessons from the reforms Morocco has implemented in the past few decades and charts a course for Morocco by addressing key areas for reform.

International Monetary Fund. Strategy, Policy, & Review Department
The Fund’s precautionary toolkit rests on the simple proposition that facilitating crisis prevention is far less costly than crisis resolution. Its value increases with systemic risk. Serial shocks to the global trading and financial systems pose significant and persistent headwinds for well-integrated emerging markets. An adequately funded global financial safety net (GFSN) with a suite of precautionary tools allows qualifying members to respond to balance of payments (BoP) shocks, reducing the incidence of crises and limiting contagion. The Fund is the only layer of the GFSN available to all members; other layers vary in their availability and externalities. In this context, the overarching objective of this review of the Flexible Credit Line (FCL), Short-term Liquidity Line (SLL), and Precautionary and Liquidity Line (PLL) is to ensure that the precautionary facilities toolkit (henceforth “the toolkit”) is fit for purpose for the challenges ahead.
International Monetary Fund. Secretary's Department

Abstract

The 2023 IMF Annual Report highlights the IMF’s work to support its members to address successive shocks, including Russia’s war on Ukraine, inflation, debt vulnerabilities, inequality food insecurity, geoeconomic fragmentation, climate change, and digitalization. In FY 2023, the Fund continued to support its members in our three core areas: 1) Economic surveillance: 126 country health checks completed.2) Lending: $74 billion to 36 countries, including about $11 billion to 21 low-income countries, for a total of $294 billion to 96 countries since the start of the pandemic. 3) Capacity development: $337 million for hands-on technical advice, policy-oriented training, and peer learning. The report is also available in Arabic, Chinese, French, German, Japanese, Portuguese, Russian, and Spanish. Note: The 2023 IMF Annual Report covers the activities of the Executive Board and IMF management and staff during the financial year May 1, 2022, through April 30, 2023, and in some cases more recently. Background: The Annual Report website includes the IMF’s financial statements for FY 2023 and other background documentation. The Annual Report and the financial statements are also available online at www.imfbookstore.org or www.elibrary.IMF.org

Juan Carlos Benitez, Mario Mansour, Miguel Pecho, and Charles Vellutini
Tax capacity—the policy, institutional, and technical capabilities to collect tax revenue—is part of a deeper process of state building that is essential for achieving the sustainable development goals. This Staff Discussion Note shows that developing countries have made some progress in revenue mobilization during the past decades. However, much more is needed. We find that a staggering 9 percentage-point increase in the tax-to-GDP ratio is feasible through a combination of tax system reform and institutional capacity building. Achieving this calls for a holistic and institution-based approach that focuses on improving policy, administration and legal implementation of core taxes. The note offers practical lessons and guidance, based on IMF capacity building experience in this area.