The Moroccan administration revealed its new national strategy for the promotion of industry in mid-February at a ceremony attended by King Mohamed VI, various ministers and prominent figures from the private sector. The National Pact for Industrial Emergence outlines multi-sector reforms designed to stimulate the industrial sector for the period of 2009 to 2015. Minister of Industry, Commerce, and New Technology, Ahmed Reda Chami, said that the pact’s 111 measures will rely on coordination between the public and private sectors to increase foreign direct investment (FDI), support small and medium-sized enterprises (SMEs), expand human resources capacity and improve the country’s business climate, which continually receives low ratings in international rankings on account of high levels of corruption.

Strong in stating quantifiable objectives, the strategy seeks to raise the volume of exports by $11 billion, create 220,000 lasting industrial jobs and to increase industrial gross domestic product (GDP) by $10 billion. Chami said that industry currently only accounts for 16 percent of Morocco’s GDP and 13 percent of jobs.

Dependence on agriculture has long been a source of economic vulnerability in Morocco, where half the population lives in rural areas and relies directly or indirectly on agricultural yield. Recurring periods of heavy drought starting in the 1960s fueled a rapid urbanization. Urban poverty has swelled with each new wave of rural migrants and the need to absorb these into some sort of workforce has proven an enduring challenge.

High joblessness and a crushing urban poverty rate — 35.4 percent among 15 to 24 year olds — have helped make the development of the industrial sector a pressing economic and political incentive in recent years. Industry made moderate progress in some areas under former King Hassan II, whose rule of the country (1961-1999) is credited with the molding of modern Morocco. Mining and phosphates, manufacturing and food processing for export and national consumption, textile, leather, and handicraft production were all cultivated during this time.

Backtracking or forward march?

King Mohamed VI, who inherited the throne from his father in 1999, has carefully cultivated a public image as a “modernizer” over the past 10 years. Using his power to push sharia reforms into effect against strong Islamist-party opposition, he set up the Truth and Reconciliation Committee to address human rights abuses inflicted under his father’s reign, and installed a new nationwide focus on industrialization — twice.

In 2005, former Prime Minister Driss Jettou presented the Emergence Plan to the king for his signature. This national strategy, the current administration’s first attempt to revolutionize the fabric of Moroccan industry, also laid out specific objectives, like creating 440,000 jobs and augmenting industrial GDP by 1.6 percent, over a 10-year horizon period. So naturally, the introduction of a new plan with different focal points and modified objectives just four years later came as a surprise for many analysts.

Minister Chami and other signatories of the new National Pact have been careful to clarify that the new plan was formulated “in a spirit of continuity with the Emergence Plan,” and that there has been no rupture or backsliding in industrial policy. The Emergence Plan is generally considered a successful initiative, and is credited with the thriving Casanearshore business park, which has won accords with 30 foreign companies in just one year, and the TangierMed industrial zone. So why did the government introduce a new industrial strategy only halfway through the 2005-2015 strategy’s mandate?

First, the 2005 plan was formulated at a time of prosperity and perky economic performance, before the global financial crisis kicked in. The 2009 pact, which commits $7 billion to industrial upgrades over the next six years, comes in the eye of the financial storm, and shows that the country is confident in its financial standing and economic potential. At a time when many countries are scaling back, the pact is a robust move to boost investment and productivity. Boosting investment now will also help carry Morocco through some of the indirect negative consequences of the global slowdown, as tourism and some exports take a hit. Enhancing industrial competitivity and infrastructure will ensure the continuity of capital flows, both at home and abroad. “The National Pact is a long-term strategy to correct structural deficits,” Chami said, “whereas the crisis is short-term.”

Furthermore, the 2009 Pact adds new, ultra-modern sectors to the country’s industrial strategy, which in 2005 was moving towards offshoring, automobiles and aeronautics. These sectors remain strategic investments, but the 2009 Pact introduces high profit margin sectors of biotechnology, microelectronics, and nanotechnology to the mix. A new smart city is planned for the microelectronic and nanotechnology industries, as well as a center for technological research and development. “With these projects, and thanks to the strategic role played by our partners, we will quickly be able to attract semi-conductor businesses and thermal energy and materials production, with the aim of installing an initial nucleus of complementary and innovative companies,” Chami said. Scientific research institutes helmed by Moroccans living abroad are also able to make significant contributions, through organizations like the Moroccan Association for Scientific Innovation and Research (MASCIR) and the Institute of Nanomaterials and Nanotechnologies.

At a time when many countries are scaling back, Morocco’s pact is a robust move to boost investment and productivity

Private-public partnership

The 2009-2015 National Plan for Industrial Emergence, a blueprint for widening the scope of the industrial sector, includes cross-sector reforms and envisions a robust role for the private sector. In addition to the nine ministers who signed and conferred on the pact, the different federations of the Confédération Générale des Entreprises du Maroc (CGEM) and the Groupement Professionnel des Banques du Maroc (GPBM) also played a role in its articulation. The GPBM committed $343 million to financing for the program, and overall the plan anticipates a private investment totaling $5.7 billion. The $1.4 billion state budget for the program will be managed by private investment funds, which will coordinate with banks and the administration to promote SME development. “Today many businesses have strong potential but lack capital,” said  Chami, who specified that SMEs will be strengthened by improved credit access and the option of augmenting their capital stock.

Legal measures are also included in the plan, especially new organs of arbitration, and legal authorities to combat corruption and money laundering. The enforcement of business law reforms will be of particular importance in increasing foreign investment flows into the industrial sector, as Morocco continues to lag behind regional competitors like Algeria and Tunisia in terms of transparency and overall business climate.

Fortunately, Morocco’s financial institutions — called upon to extend credit and stimulate competitivity among SMEs — are standing strong in the face of the crisis. Othmane Benjelloun, representing the National Association of Moroccan Bankers at the ceremony, said there was a 15 to 20 percent growth in lending in the first six weeks of 2009. “The crisis has had no effect on the Moroccan financial sector,” he said, confirming that the Banque Marocaine de Commerce Exterieur, of which he is CEO, is moving forward with plans to penetrate all 55 African territories in no more than 15 years.

A united front among qualified political actors will also go a long way towards the achievement of the plan’s principal objectives. The World Bank and the IMF have both urged Morocco to work on coordinating interministerial cooperation. Chami, who holds an MBA from UCLA, previously served as regional director of Microsoft’s Emerging Markets Asia Division (2001-2003) and then as president of its Southeast Asia division (2003-2004) in Singapore, before returning to Morocco to take control of the Groupe Saham, where he managed insurance and information technology subsidiaries. Appointed minister of trade, industry, and new technologies in 2007, Chami is the engineer and spokesperson for the 2009-2015 plan, which was formulated in collaboration with management consulting cabinet McKinsey. His technological savvy and international experience are strong indicators that he is highly qualified to lead in his domain.

Coordinating with other ministers will be the key to developing the wide-ranging components of the plan — from vocational schools to anti-corruption justice system reforms to privately-managed investment funds — that will deliver on the boldly ambitious promises of the National Pact for Industrial Emergence.

Long a regional leader in education, Tunisia is planning a number of new initiatives that will help tie classroom learning to marketable skills. International partnerships, particularly with France, as well as increased access to information technology and the opening of private universities, are part of the plan to capitalize on Tunisia’s most valuable natural resource — its people.

During French Education Minister Xavier Darcos’s two-day working visit in mid-February, he announced a bilateral agreement to boost technical, technological and vocational training as well as mutual authentication and recognition of degrees. The agreement will also promote teacher exchanges and the pairing of French and Tunisian academies and regions, with an affiliation between the Academy of Besançon and the Nabeul Regional Education and Training Department leading the way. The French academies of Creteil, Nantes, Nice, Lille and Bordeaux have also expressed interest in starting co-operation programs with Tunisian institutions.

First day of class

The same day the institutions in Besançon and Nabeul concluded their agreement, the University of Paris-Dauphine announced the opening of a branch in Tunis, with classes starting this year. The university will offer courses in economics, management and law, and will open masters and professional classes in the first year, with plans to expand to all levels of licensing and standards — in line with European standards for bachelor, master and doctorate degrees — in September 2010.

France is Tunisia’s most active educational partner, but other European countries have announced plans to launch programs as well. Luxembourg’s Minister of National Education and Vocational Training, Mady Delvaux-Stehres, led a delegation to Tunisia in January and inaugurated, along with Tunisian Education and Training Minister Hatem Ben Salem, the newly renovated and refitted Radès technical school.

Not to be left out of the flurry of activity in the first two months of the year, Britain signed a memorandum of understanding in mid-January to launch ‘English for the Future’, an eight-year program that will introduce new English language materials and course books for primary and secondary education. Employment is again the primary focus of the program, with stronger vocational language abilities expected to increase job opportunities for young people.

The IMF has projected the unemployment rate to be 13.8 percent in 2009 and an increasing number of university graduates are seeking jobs. In 2007, 19 percent of university graduates were unemployed, while the rate is predicted to rise to 25 percent by 2011. The new international partnerships will bolster domestic efforts to develop practical, job-oriented programs, most notably through increased access to ICT and the development of private, specialized universities.

Tunisia ranks second in the arab world and first in africa for the quality of its education system

Technology for education

The government hopes to equip primary and secondary schools as well as universities with a computer in every classroom, with plans to have 80,000 computers for 70,000 classes by 2009, up from 22,000 computers for 81,000 classes in 2004. ICT is also being integrated into curricula, not only for engineering courses but also for language and cultural lessons and as a way to prepare graduates for the job market.

Although the private sector cannot yet claim to compete with the public system — which offers quality education for free — private universities are becoming increasingly common. Such schools offer a means to relieve crowding in the state system, while they are also able to respond with more flexibility to a modernizing job market.

Private institutions offer courses in areas such as business, communication technology and tourism, and they generally integrate one-year work experience into their curricula. They also have partnerships with foreign establishments, such as ESPRIT’s relationships with the French universities École Internationale des Sciences du Traitement de l’Information (EISTI), Télécom Lille and the École National Supérieure des Mines (ENSM) in Saint Etienne, as well as the Mediterranean School of Business’s (MSB) partnerships with the US-based University of Maryland School of Business and Canada’s University of Waterloo. These international collaborations have increased recognition for Tunisian universities and added further value to their diplomas, with some partners even issuing a double diploma, as in the case of the École Supérieure des Communications de Tunis and Télécom ParisTech.

These programs will help Tunisia modernize its already strong education sector. Indeed, the country commits a substantial amount of funding to education, with the Ministry of Education and Training’s 2009 draft budget set at $1.97 billion, up from $1.7 billion in 2008. According to the World Economic Forum’s (WEF) 2008-2009 Global Competitiveness Report, Tunisia ranks second in the Arab world and first in Africa for the quality of its educational system, while coming in 17th place worldwide. The planned expansion of ICT availability will strengthen its existing network, which is ranked 34th in the world in terms of Internet access in schools, according to the WEF report.

Although the country’s education indicators are strong, the persistently high unemployment rate suggests that more can be done to harness the potential of recent graduates. The new initiatives are a good place to start.

As the Eurozone economies begin to contract, companies are enacting an increasing number of cost-cutting measures, including outsourcing and offshoring, with Tunisia’s manufacturing sector an unexpected beneficiary. At a time when European companies are looking to reduce expenses, they are increasingly relying on North African countries such as Tunisia — with their large, educated workforces and cheaper operating costs — to supply technical expertise at a lower price.

For some major European firms, such as the aerospace group EADS — the parent company of Airbus — this year marks the first time production has been expanded outside the Eurozone. As part of a restructuring plan that seeks to save one billion euros by 2012, Airbus announced in September 2008 that it would build a components factory in Tunisia. “We are planning to produce basic parts in Tunisia, while research and production of more sophisticated parts and composites will be in Europe,” EADS spokeswoman Gaelle Pellerin was reported as saying. Work slated to be done in the $139 million factory includes sheet metal and surface processing for the assembly of fuselage components manufactured in France.

The factory express lane

The Airbus plant is just one part of Tunisia’s strategy to become a regional industrial hub. Since 2007 the Ministry of Industry, Energy and Small-and-Medium-Sized Enterprises has been working to implement an ambitious program to double exports between 2007 and 2016, from $10 billion to $21 billion. Mechanical, electric and electrical industries are expected to capture the lion’s share of this upward trend, as their share of industrial exports is set to increase from 25 percent to 46 percent between 2006 and 2012, making them the pillars of the country’s manufacturing industry. A significant number of new deals have already been signed in these segments, suggesting that a sharp rise in production is likely.

The ministry’s program was only recently launched but auto parts manufacturers and cable manufactures have already inked multiple agreements that will bring foreign direct investment (FDI) and jobs to Tunisia. In 2008 new projects helped turn cable manufacturing into a lucrative niche, including a $50 million investment from German group Draexlmaier to build a plant in Siliana, a $24 million commitment from Kromberg & Schubert to set up a company in Beja, South Korean firm Sewon’s $10 million factory in Kairouan and Sumito Electric Bordi Jetz’s operations in the Kef industrial zone, which will cost $3.5 million. In total, the four plants will create more than 13,000 jobs. These projects are still in the development phase but other plants are close to completion. For example, in early January 2009, a subsidiary of Japanese automotive supplier Yazaki announced that its $30 million automotive cable component plant in Gafsa would be operational by 2010 and create 2,500 jobs.

Besides aeronautic and automotive components, the government’s growth program calls for expansion in four other high-value sectors: textiles, footwear and leather, food processing and biotechnology.

The colors of success

These segments are proving popular areas of investment for European companies. Benetton, the Italian group, has been manufacturing textiles in Tunisia to export since 1995, but is now working to expand its presence. In 2008 alone, the company made more than $25.5 million in industrial investments, specifically aimed at building a new plant to produce cotton knits.

Commenting on the group’s decision, Alessandro Benetton, executive deputy chairman of Benetton Group, said “we think the success  factors of Tunisia can be summarized in three words: stability, proximity and quality.” Tunisia’s expanding list of trade partners should help foster broader market access for its industrial exports. Free trade agreements (FTAs) within the region and with the EU offer enormous potential for the sector. The Agadir Agreement, a free trade agreement between Jordan, Morocco, Tunisia and Egypt, is designed to help countries meet the EU rules of origin more easily, with Agadir seen as a first step towards a broader Euro-Mediterranean free trade zone. While the trade and business links between the four Arab countries are not the strongest, with Moroccan and Tunisian companies encouraging trade with individual countries rather than inter-Maghreb trade, the partnership is still in its early stages and the agreement offers great potential by increasing access to EU and US markets for the member states.

Tunisia has also expanded its trade network through a number of other bilateral agreements, including FTAs with Libya and Turkey, and perhaps most significantly, an FTA with the European Free Trade Association (EFTA).

All of these factors should help Tunisia’s industrial sector weather the global financial storm. By offering a low-cost, high-quality alternative to European production, the country can maintain and even expand production and jobs over the coming years.

Last year wildlife experts working in South Sudan told of a re-discovery that caused a flurry of excitement and hope. Surveys in war-affected areas where animals were thought to have perished or disappeared were teeming with life. One of the world’s biggest migrations — that of the white eared kobs — was still flowing with some 800,000 animals thundering across the plains and swamps.

“Many species have been greatly reduced. But this was good news and any good news is wonderful news after such a prolonged conflict” says Paul Elkan, the head of the South Sudan Country Program of the Wildlife Conservation Society , who took part in these first surveys for 25 years.

For those who have even heard of South Sudan, the first images likely to come to mind are of AK-47-toting soldiers, six-foot tall women and even taller men, land mines and almost no development at all. But the region’s officials are beginning to think of ways to spread new ideas about the south.

North Sudan battled a southern insurgency for more than 20 years before a 2005 peace deal gave the south semi-autonomy and a secession vote in 2011. The new government is busy building its physical, bureaucratic and legislative structures. This last group includes business and investment laws and a new tourism policy that officials hope will lead to an interest in unacknowledged wildlife and cultural riches in the war torn south.

Wildlife flourishes

The few individuals who have begun to gently research possibilities agree with Elkan that it’s the unusualness of the south and its untouched wildernesses that will bring in interest. “It’s an area very few people have seen close up,” Elkan says. “You can see lots of elephants in Kenya but in the south you can see them living in the Sudd, Africa’s largest freshwater swamp.” The vast Sudd — where it is possible to fly for hours over its islands and lily-filled waters — also contains incredible, possibly unparalleled, birdlife, including the famously rare shoebill stock.

While the south’s infrastructure seems painfully underdeveloped compared to neighbors Kenya and Uganda, their proximity could also bring a few curious tourists looking for something new to add onto a trip. These neighbors, with their well-developed safari industries, will likely provide the south’s first investors too. Elkan echoed businessmen already in Juba’s large hotel business when he envisaged the beginning of small scale and pricey tented camps, set in untouched wildernesses.

The south also has a rich variety of cultures with over 70 different tribes with distinct and colorful traditions that are proudly continued to the present day.  Wildlife ministry official Laura Tete Lino sees these rural communities as direct beneficiaries of tourism as well as a draw. The tourism policy, to be passed this year, includes the promotion of community-based tourism. “We want to see eco-tourism run by the communities themselves. We plan to provide support and guidance,” Lino says. Once the policy is passed the South will launch an advertising push to try and get hardy investors hooked she adds.

Perhaps of most interest will be the south’s 13 game reserves and six national parks — including two vast ones — that were planned before the war. Never fully developed, they are now in some disarray although local populations still remember their boundaries, Elkan notes.

“People forget there was strong interest in visiting the south growing before the war,” Elkan remarks. A huge number of ex-rebel soldiers have been transferred to the wildlife division and are  slowly being trained as rangers and wardens. It is partly because these rebel soldiers and commanders understood the future value of the wildlife and controlled hunting even in tough times that so many still survive to this day, Elkan explains.

Central to the ministry’s plan is a 42-bed lodge in Nimule Park that they have built out of an old structure seated at a high point in the reserve. The hotel should be finished in the next several months. Only a few hours drive from the capital Juba where both government and UN officials are in need of a hideaway for conferences, the 410 square kilometer park is also conveniently close to the Uganda border and full of elephants and impressive rapids. “In March we hope it will be ready to open it up to investors to come and take it over and manage it,” Lino states.

For Lino and others in the south’s government, tourism is more than just a hoped-for industry. Together with agriculture, the new southern government sees tourism as a crucial way for war-affected communities to begin making money, linking them to the region. It’s also crucial for a future that southerners hope will see them free of oil-dependency that currently controls their finances — especially now, with painfully low prices drilling holes in their budget.