Morocco - Priorities for public sector investment (1981-85)

Report No. 4156-MOR Morocco L COP Priorities for Public Sector Investment (1981-85) June 15, 1983 Country Programs Department II Europe, Middle East and North Africa FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS SDR 1.00 = Dirhams (Dti) 6.9138 (as of December 31, 1982) Official Exchiange Rate: Dirham (DH) per US dollars (Period Average) 1971 5.0481 1977 4.5034 1972 4.5959 1978 4.1667 1973 4.1069 1979 3.8991 1974 4.5698 1980 3.9367 1975 4.0525 1981 5.1723 1976 4.4193 1982 6.0230 Source: IMF, International Financial Statistics. Note: In this report, the US dollar equivalent of all investment estimates quoted in the 1981-85 Development Plan have been calculated at the exchange rate whic"i prevailed in 1980, when the Plan was prepared. FISCAL YEAR January 1 to December 31  FOR OFFICIAL USE ONLY TITLE PRIORITIES FOR PUBLIC SECTOR INVESTMENT (1981-85) COUNlRY MOROCCO REGION EUROPE, MIDDLE EAST AND NORTH AFRICA SECTOR COUNTRY ECONOMIC REPORT TYPE CLASSIF MM/YY LANGUAGES 4156-MOR Economic Restricted 06 83 English/French PUBDATE 8306 ABSTRACT The report gives an overview of past economic performance and aspects of investment policy. It outlines medium-term prospects for macro-economic as well as sectoral growth in the light of existing economic situation. The review of the public sector investment program in the 1981-85 Economic and Social Development Plan focuses on the priorities and effectiveness of the proposed projects. Detailed analysis is provided for such sectors as agriculture, mining (particularly phosphates), manufacturing, energy, transport and telecommunications, education, health and housing. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   FOREWORD This report was prepared by Ms. Michele Guerard on the basis of the findings ot an economic mission and several sector missions which visisted Morocco over a period spreading from October 1981 to May 1982. The economic mission, led by Ms. Guerard, included the following staff. Thierry Baudon (Agriculture), Rene Bonnel (Macroeconomic Projections), Delbert Fitchett (Public Investment Program), Danuta Nowicki (Research Assistant). The phosphate sector missions, coordinated by Silvio Capoluongo, included Luciano Borin, Bernard Brentnall (Consultant) and William Sheldrick. The transport sector missions, led by Graham Smith, included Bernard Chatelin (Railways), Robert Mangolinri (Consultant, Ports and Shipping) and Iona Sebastian (Ports and Shipping). The report is also based on the findings of the following sector missions: an Urban Sector Review and Project Identification Mission, which visited Morocco in July 1981; a joint UNESCOiWorld Bank Education and Training Sector Survey Mission, whicn went to Morocco in October 1981; a Telecommunications Sector Mission, which visited Morocco in November 1981; a joint UNDP/World Bank Energy Sector Assessment Mission, which went to Morocco in February 1982; and a Mining Sector Survey Mission, which visited Morocco in May-June 1982. The report further includes the results of a desk study of the industrial investment program by Fran,ois Ettori.   MO(g(; ., GRIoTI r fE.> F'Ot PUBBLrC SECT'OR INVES'IMENT (1981-85) 'Table of Contents Page No. MAP COUNTRY DATA SUMMARY AND CONCLUSIONS i-xi PART I I. INTRODUCTION 1 II. THE MACROECONOMIC PERSPECTIVE 11 Recent Economic Developments 11 Medium-Term Prospects 11 Sectoral Growth Prospects and Policies 12 The Macroeconomic Framework 14 Fiscal Prospects 16 Balance of Payments Prospects 18 Ill. THE PUBLIC INVESTMENT PROGRAM 23 The 1978 Investment Cuts 25 The 1981-85 Program 26 The Investment Program for Agriculture 30 The Investment Program in Mining and Manufacturing 31 The Investment Program in Energy 33 The Investment Program in Transport and Telecommunications 34 The Investment Program for Education and Training 36 The Investment Program in Health and Housing 38 PART II IV. AGRICULTURE 40 Sector Performance and Policies 40 The 1981-85 Investment Program 44 Conclusions and Recommendations 57 V. MANUFACTURING AND MINING 59 A. THE PHOSPHATE SECTOR 59 The World Phosphate Industry 60 The Phosphate Sector in the Moroccan Economy 61 The 1981-85 Investment Program 64 Conclusions 70 B. THE NON-PHOSPHATE MINERAL SECTOR 71 C. MANUFACTURING 73 The 1981-85 Investment Program 74  Page No. VI. ENERGY 82 Energy Balance and Prospects 82 Resource Base and Sector Policies 84 'Ihe 1981-85 Investment Program 86 Electricity 88 Oill and Gas. Upstream 92 Oil and Gas: Downstream 95 Oil Shale 97 Coal 98 Energy Conservation and Fuel Switching in Industry 100 VII. TRANSPORT AND TELECOMMUNICATIONS 103 A. TRANSPORT 103 Sector Performance and Policies 104 The 1981-85 Investment Program 106 Planning and Coordination 108 Road Investments 109 Railway Investments lll Fixed Installations: Phosphate-Related Investments 113 Fixed Installations: General Operations 114 Rolling StocK 114 Marrakech-Laayoune Line 115 Implementation Capability 116 Port Investments 116 Shipping 120 B. TELECOMMUNICATIONS 121 VIII. EDUCATION 124 Sector Performance and Policies 124 The 1981-85 Investment Program 127 Recommendations 131 Conclusion 137 IX. HEALTH AND HOUSING 138 A. THE HEALTH SECTOR 138 B. HOUSING 141 STANDARD TABLES  IBRD I 5252R PORTUGAL1 SPAIN ITL1 GREETRKEY &-- UN:18 ------- * - 'U> V KINGDOM OF MOROCCO e Cddie, PA I N Miale .(g rkaBtwhinUO!S I ^ff88.T.Y, '5.-> '1" Main roads O,9COCeU P ABAS - -- Secondary roads 0 : ~~~~~A11RA e x A.F 0 t 7 ~, - 3 LIBYA 'REP OF - --TracksAW