Economic Freedom Ranking: Morocco Comes 86th
February 22, 2017
Morocco has been ranked 86th in the Index of Economic Freedom established by the Heritage Foundation, a Washington-based think-tank, labeling it a moderately free country.
In the 86th place, Morocco is the best ranked in the Maghreb region, far ahead of its neighbors. Tunisia ranks 123rd, while Algeria ranks 172nd. With a score of 61.5 (against 61.3 last year), Morocco is ranked 9th in the MENA region just ahead of Tunisia, Lebanon, Egypt, Iran and Algeria, but far behind the United Arab Emirates and Qatar.
For over two decades, the Index of Economic Freedom has measured the impact of liberty and free markets around the globe, and the 2017 Index confirms, according to the foundation, “the formidable positive relationship between economic freedom and progress.”
In this 23rd edition published in February, the agency compares 186 countries based on ten criteria, from ownership rights to entrepreneurship. With a liberal view of the economy, the think tank defines economic freedom as “a fundamental right of every human being to control his work and property.”
In its analysis on economic freedom in Morocco, the Heritage Foundation believes that the Kingdom “is benefiting from a commitment to economic reforms that encourage a dynamically evolving private sector.”
According to the foundation, one of Morocco’s strength resides in its open market, where the level of commercial, financial, and investment freedoms is high:
“Trade is important to Morocco’s economy; the value of exports and imports taken together equals 81% of GDP while the average applied tariff rate is 3.0%. Foreign and domestic investors are generally treated equally under the law. The financial sector is competitive, and there is an ongoing campaign to increase modernization and transparency. The Casablanca Stock Exchange does not restrict foreign participation.”
However, despite all the efforts deployed by Morocco to raise a healthy and just economic environment in the country, and its status a strong reformer in the area of private-sector development, the foundation criticizes the government’s willingness to confront long-standing challenges that require deeper reforms, particularly in connection with the rule of law.
The foundation considers the Moroccan judiciary system as not independent of the palace, and states that “officials engage in corrupt practices with impunity,” before adding that “corruption is a serious problem throughout government and law enforcement.”
Criteria on property rights, integrity of government and judicial efficiency are therefore not well rated. At 37.1%, government integrity is harshly criticized: “Property ownership is weakly protected. The court system is highly inefficient. Corruption is extensive, and the judiciary is strongly influenced by other branches of government. Expropriation is possible even if rare.”
“A large segment of the labor force remains marginalized because of an inflexible regulation of labor.” In the report, the foundation recommends implementing deeper reforms. “Procedures for setting up and registering a private business have been streamlined in recent years. Despite some improvement, labor market rigidity continues to discourage dynamic employment growth.”
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