Morocco Property – Is it next? Will the Mexican wave of uprisings in Middle East, spread?

March 2, 2011

Morocco Property – The Region

Arab governments have launched a wave of financial concessions since the start of the Region’s crisis, (Tunisia, Egypt, Libya et alia) in an attempt to head off potential uprisings.

Countries in focus now: Tunisia, Egypt, Morocco, Algeria and Jordan, all saw protest and at times riots, in the 1970s and 1980s over food prices, particularly for bread.

About 30% of the population in Middle East and North Africa (MENA) is aged 15-29. The region has high unemployment, and in some countries 4-5 times as many young people, than adults are out of work. Middle Eastern economies are not expanding at a fast enough pace to provide jobs for their growing populations.

Some Middle Eastern states are among the least democratic in the world. After years of living under authoritarian regimes, citizens have demanded liberties and political freedoms, in a sudden outburst of empowered rebellion.

Morocco Property – what’s the market environment like?

Morocco, as a monarchy, is seen as a lower risk than some other North African countries. Whilst Morocco is classed as a lower-middle-income-country, alongside, Egypt, Jordan, Tunisia; Morocco is ruled by a young king (47 years old), in other countries the presidents were old and unpopular. Morocco is constitutionally and in practice, a monarchy.

Moroccans have grown up in a tradition of deference to the monarchy, and Muhammed VI is, on the whole, a popular king, particulalrly when compared with his more autocratic father, King Hussan II

It is unclear how much the average Moroccan cares about the lack of political liberalisation. Many believe Morocco is a democracy, or maybe do not wish to say otherwise. And if there is a view that the regime is authoritarian, some consider this to be a positive thing. Many apparently think the king’s growing business clout is good for the country’s overall economy. Mohammed VI’s personal fortune is estimated at $2.5 billion and royal businesses account for c.6% of GNP.

The King claims to support social change and economic equality. To date, he has reformed family law, to give more rights to women. Yet some Moroccans feel the reform has gone too far. Despite economic growth of around 5% a year for the past decade, sizeable remittances from abroad, as well as significant investment in infrastructure, some Moroccans remain to be convinced that poverty has been educed much.

Morocco Property – The Risk?

However, whilst Morocco has been stable, there have nevertheless been some unrest in parts, with demonstrations in Tangier for example. Among demonstrator demands are for King Mohammed VI, to re-energise the reforms that have slackened since the start of his reign in 1999 and introduce a constitutional monarchy like those of Spain or the UK.

Nevertheless, there are several parallels between events in Morocco and elsewhere in the region. Educated, urban middle-class Moroccans, for a start, seem to have an appetite for modern, political institutions and may be tiring of the paternalistic attitude of their monarch.

Morocco may be freer than its neighbours, a reason many investors have bought Moroccan property, but the press does not enjoy complete editorial freedom and there is resentment, in some quarters, about the influential business empire of the royal palace.

So reform seems to be desired and the pace is important if Morocco wants to remain as one of the region’s most politically advanced societies.

Sources: FT, IMF, Citywire, World Bank

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