Morocco - Current economic position and prospects (Vol. 1 of 2) : Main report

Report No. 329-MOR /7 7V--v Current Economic Position and Prospects of FILE COPY Morocco (In Two Volumes) Volume I Main Report February 7, 1974 EMENA Region Country Programs Department II Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept respon- sibility for the accuracy or completeness of the report.  CURRENCY EQUIVALEI"S US$ 1 = JD o.3125 JD 1 1,000 fils US$1 DM 2.t40 JD 1 = DM 7.68 ABBREVIATIONS JD = Jordanian Dinar DM = Deutsche Mark ton metric ton 3CI Jordan Ceramic Industries Company Limited Lecico = Lebanese Ceramic Industries Company S.A.L. Agrob = Agrob Anlagenbau GmbH UNDP = United Natibns Development Program IDB = Industrial Development Bank I of Jordan  TABLE OF CONTENTS Page No. BASIC DATA MAP SUMMARY AND CONCLUSIONS SECTION I - BACKGROUND AND PAST PERFORMANCE ............. 1 I. Political and Social Background .................. 1 II. Recent Economic Performance *;****.*********** ,. . 3 Growth performance and major determinants ..... 3 Balance of payments .................0.....0.,. 7 Fiscal and monetary policy 0................... 10 Population and employment ..................... 19 Income and wealth distribution * ............... 22 Concluding remarks ... . . .............. **. . 23 SECTION II - THIRD DEVELOPMENT PLAN (1973-77) OVERALL STRATEGY AND POLICIES ............ 24 I. Overall Plan Framework ............. ,............. 24 Major plan objectives ......................... 25 Major plan strategy and policies .............. 27 Investment and saving ......................... 28 Sectoral growth pattern ....................... 31 II. Balance of Payments ....... ....................... 33 Commodity exports ... . ...................... 33 Merchandise imports ..... ...... ....... ...... 37 Tourism and other non-factor services * ........ 38 Workers' remittances and other factor services. 38 External capital requirements ................. 39 External debt and debt service * ............... 42 III. Domestic Financing Requirements .................. 44 Central government investment * ................ 44 Central government expenditures and financing.. 46 Local governments and state enterprises ....... 49 Domestic financing: revenue policy ........... 50 Expenditure and borrowing policies ............ 53 Capital market improvement ..................*. 54  TABLE OF CONTENTS (Continued) Page No. SECTION III - SECTORAL AND REGIONAL DEVELOPMENT POLICIES... 59 I. Agricultural Policies ........................ . 59 Recent performance .............. .......... 59 Third Plan objectives and strategy .......... . 64 Third Plan prospects ... 66 Land reform 68 II. Industrial Policies 74 Mining ....74 Manufacturing 76 .III, Tourism . ...... ,81 The Second Plan (1968-72) . 81 Government role . 81 Economic impact . 82 The Third Plan (1973--77) ....... 83 IV. Other Economic Sectors . 85 Transportation . 85 Water supply . 88 Energy . 89 V. Social and Regional Development Policies . 92 Population and employment ... 92 Educational Policies . 95 Regional development ... 100 Urban development ... 104 This report is based on the findings of an economic mission, which visited Morocco in September 1973. The mission was composed of Messrs. Christian Merat (Chief of Mission), Johan de Leede (General Economist), Jacoues Argoullon (Agricultural Specialist), Keith Griffin (Land Reform Economist), Bruno Contini (Industrial Economist), Jean-Francois Bauer (Tourism Specialist), Jean-Louis Biancarelli (Tourism Specialist), Michael Carter (Loan Officer), and Francois Ferrandi (Loan Officer).  AN 1 Page 1 of 2 pages CC tRY DATA, MR D AREA 2/ POPULATION DENSITY 50 n940 kmr 15.8 million (ndi-1972) Oper 10?Jt Rate of Growth. 2.6' (frs!960 tol971 )2 186 per km2-of arable land POPULATION CHARACTERISTICS (1965l197 ) HEALTH (1965) Crude Birth Rate (per 1,000) ,49.5 Population per physician 12,930 Crude Death Rate (per 1,000) ;6.5 Population per hospital bed 660 Infant Mortality (per 1,000 live births' 1-49,r (1962) INCOME DISTRIBUTION DISTRIUBITION OF LAND OWNERSHIP(early 19601s) % of national income, igest quintile .. 70 7. owned by top 10% of OWners lowest quintile ,, ., 7b owned by smallest 107 of owners ACCESS TO PIPED WkTER (196o) ACCESS TO ELECTRICITY (160) % of population - urban 59 7. of population - urban 85 - rural 19 - rural 31 NUTRITION -(1964-1966) EDUCATION (1971) Calorie intake as % of requirements 92 Adult literacy rate 7 24 Per capita protein intake 58 Primary school enrollment % 24 3/ GNP PER CAPITA in 1972 US $278 GROSS NATIONAL PRODUCT IN 1972 ANNUAL RATE OF GROWTH Ct. constant prices) US $ Mln. % 1960-65 1965-70 1971 1972 GNP at MSarket Pricee 4361 3.0 5.1 5.2 4.2 Gross Domestic Investment 558 5.4 8.3 -0.4 -4.1 Gross National Saving 586 13.1 1.6 4.6 51.0 13.8 Current Account: Balance 29 0.7 * Exports of Goods, NFS 930 21.3 0.7 5.3 7.6 6.6 Imports of Goods, NFS 963 22.1 -1.0 9.6 -4.7 -5.3 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1971 Value Addedki Labor Force V. A. Per Worker A $ Mln. _=%MTh. ____ Agriculture 1021 28 1.99 50 514 56 Industry 912 25 0.60 15 1526 165 Services 1752 47 1 .04 26 1675 181 Unallocated . *