Significance of selected industry for the economy
The Moroccan economy is based on tourism, agriculture, and phosphate. The seafood and fish also play an integral role in the Morocco economy. Gross Domestic Product of Morocco is dependent on mining and industry. After China and the US, Morocco is the third large producer of phosphate. Therefore, it holds a central significance for the economy. Morocco phosphate is an important mineral that has diverse usage. Due to the production of mining n four different sectors, its significance is increased. These four sectors are Boucraa, Youssoufia, Benguerir, and Khouribga. The mining in Khouribga is carried out on the deposits of OuladAbdoun phosphate. These phosphates are found 140 kilometers southeast Casablanca.
This mine has greater potential for extraction and estimated as 17-18 million tons on an annual basis. The extracted phosphate from this mine is exported globally. The ores found here are different quality and substantial support to the chemical industry worldwide. Moreover, this is also supportive of the JorfLasfar chemical industry hugely. A state-owned company OCP is responsible for the ownership and control of Morocco phosphate. It stands for Office Cherifien des phosphate. The extraction potential is key to understand the value of chemicals. OCP operates on five continents (Update, 2019). Since 1920, its creation is set up at the international level. Later, the operations are developed into adjustment, anticipation, and flexibility capacities with the requirement of a competitive industry.
Morocco has OCP as the largest enterprise, so it has employed more than 2% population, so it has contributed significantly to reduce the unemployment level in the economy. The company also provides training to the labor force, so it is a contributing buildup of skilled people in the economy (Encyclopedia Britannica, 2019). Morocco houses about two-third of the phosphate reserves of the whole world, so this is a higher league as compared to Russia, China, and the US. Morocco has four main producers of phosphate, so the reserves account for 50% of the global reserves. The consumption growth of phosphate in Morocco is estimated at as1-2% per annum. These economically exploitable reserves hold central significance in the Morocco economy, so it is taking measures to reduce the prices of phosphate in 2008 (Babali, B. 2019).
An estimated investment of $4milllion, the economy is planning to increase the production of phosphate from 30-55 million tons per annum. The analysis provides that the GDP of the economy is significantly affected by this growth and export. So the country is famous for attracting foreign investment and other countries to increase business relationships and collaboration with the phosphate industry (Update, 2019).
Political and Economic Influence of the Phosphate Industry
Morocco’s export market in Europe has faced successive shocks due to the financial crisis. The stronger position of Morocco’s economy is due to strategic advantage. On the political side, it gas faced political issues with Arab neighbors that created difficulty in maintaining growth. World economic forum reported that Morocco is a competitive economy of North Africa and stable in terms of democracy. After the constitutional changes in 2011, the elected government faced a strong role of parliament among developing countries (Rarick, 2011). The plan of government to capitalize on the strategic location was to focus on the African and American markets. The development strategies of the economy regarding mining and chemical have faced a great set of reforms and policies aiming at growth.
The phosphate industry is facing huge advantage of the growth, and its presence in Morocco’s geographical areas has created wealth, job training, and better supplier connections. Due to the wellbeing of its employees and contribution to improving GDP, political influence is increased. Peace and Security Council of Africa decided that Morocco will not enter in the contracts of exploration and exploration of natural resources of Western Sahara. The decision shows that Morocco faced criticism about not showing up at the meeting of Sahara. Morocco aims to be the large producer of fertilizers and phosphates, and by 2017, this production was increased to 12 million tones.
The big plans of OCP under construction framework and fertilizer production are elapsed at US $2.4 billion investment for a period of five years. In 2016, OCP signed a contract with the Dangote group, which is by the wealthiest person from Africa and Nigeria. These domestic and foreign plans of Sahara with Russia show political goodwill about phosphate partnership, which is relevant to the economy of Morocco. In Sahrawi and Nigerian news sources, the phosphate related collaboration can be a misunderstanding because most of the phosphate and fertilizer is sold to factories and mines. Towards political aspects, Morocco is a leader of Arab states and Mediterranean unions. The stable status of politics in Morocco has international influence. For instance, phosphorus is a chemical fertilizer, and this industry will be engaged in more than 65 new production units and by 2017-2021 (Update, 2019). The stable political status of the economy is seen in all the aspects and industries, so effective measures have been taken for universal education and securing human rights as well as employment opportunities.
Demographic Profile of the Labour Force
The living standard in Morocco is not up to the international level, and a decline is seen since 1990. People living below the poverty line are increasing, so since 1991, 19% are below the poverty line. Another reason for this is uneven development and the emergence of the affluent class. The flexibility of the labor market in morocco is not estimated, but it describes financial productivity and inflation rate. The structural changes in labor 2019 have reported that a shift in labor and productivity is seen from industry to services sector. On account of the phosphate industry, the labor force has specific records, for instance, unemployment is a challenging issue, but due to the phosphate industry, a trained labor force exists in Morocco. The North African average is estimated as 10-12% for unemployed people, while 9% of women laborers are a part of regional unemployment when measured on average (International Monetary Fund, 2019).
In Morocco, no specific unemployment gender gap exists, but data by ILO reveals that a steady rate is observed in the past decade. Youth unemployment is also increasing, while in the past ten years, this ratio is hovering over the regional average. As compared to Arab countries, Moroccan workers are manly working in the agriculture and mining sector (Rarick, 2011).
In the Morocco phosphate industry, the unemployment ratio is at a declined level as compared to other sectors. North African estimates state that 65% of the unemployed force is estimated for a year, while 52% are job seekers. The government is paying job security (social) and medical insurance to employees. If the higher education sector is observed, the unemployment rate is high, and since 2012, this ratio is increased to 6.8% (White, 2015). In the mining and quarrying sector, total employment is 67,664 in 2012, while this sectoral share was 0.6%. The ratio of men employed in this sector was 98%. The estimates show a positive result for the phosphate industry that this sector is engaging more people and increasing the employment level (Update, 2019). In addition, the Gross Domestic Product of Morocco due to mining and quarrying was 3.2%, while per-share GDP in US$ is 64,651. Different channels explain the gender gap and growth rate of employment; for instance, women’s participation in the labor force increases the talent of potential entrepreneurs. The participation rate in the labor force is 25% overall that highlights the case of lags. The Moroccan labor market experiences gender gap. There are gender disparities observed in the participation of the rural and urban areas of the labor force (Ashford, D.E.1961).The employment rates in different sectors, particularly the mining sector, face the rate of unemployment, despite training and formal jobs (Prettitore, P.S. 2015). However, this ratio is minimal, and the labor market is facing mismatch under regulation, yet this impact is acute for women.Moroccan has taken measures to reduce the prices of phosphate in the past. Though it is a large country to produce phosphate rock in the world, yet its labor force is facing different issues. Despite training, involvement, and job opportunities for the labor force in Morocco, specifically in the mining sector, there is a gap in labor force participation.
The manufacturing sector in Morocco is contributing to the GDP of the country (Watch, 2020). Raw material and transportation sectors are linked to the mining sector, and there are enormous opportunities for the labor force to participate, yet some lags exist, and a need to improve this labor force participation is inherent. Though the mining sector is attracting the attention of the private sector and other state operations as well as foreign sources. Processing of phosphate and export needs of fertilizers is a key part that needs the involvement of the labor force. The economic activity of this sector, in relation to labor force participation, is a significant attempt of government because, with the increase in global collaboration and investment, the export will be increased (White, 2015). Morocco’s economy needs an emphasis on the added value of phosphate due to the increased focus on exports. The government is attempting to control basic hurdles and challenges for the labor force to enhance their participation in the mining sector since this will enhance the GDP of the economy (Medsocialdialogue, 2016). The involvement of labor in producing phosphate is inherent for the economy, and this will transform the industry as well as its capabilities.
Evaluation of Economic Growth
The economy of morocco needs high investment as well as private sector growth to reduce unemployment and increase job opportunities for youth. There are some weaknesses in a competitive business environment for small and medium enterprises development. The role of the government to improve private sector involvement is supportive for the acceleration of mining sector growth (Rarick, 2011). These reforms are reinforcing and boosting a rich growth tendency. The public sector involvement, efficiency, and governance are linked to anti-corruption policies and transparency. For the progress, administration, and promotion of government policies, there is an increased need to reduce corruption as well as vulnerabilities in all the mechanisms. The information access law is enacted in 2019 to facilitate all feedback received from the public. The economic forces are now aligned with the communication perspectives, and national strategy implementation is focused that will increase the public trust level (Watch, 2020).
Morocco’s economy has stable politics and enormous natural resources, i.e., phosphate industry potential. This scope can easily attract foreign investment and activate anti-corruption policies. The public sector efficiency for the economy is significant. Civil service and quality of public investment are linked to reforms that can help maintain public wages (Hahn, T. and Auktor, G. 2018). These motivating factors for the labor force can increase the engagement of people and youth. In the Morocco economy, fiscal decentralization in 2018 presented transparent criteria for the public resources in the region. The public enterprises are also working for the financial management level, and it is helpful for the adoption of a strategic approach. The public investment management is linked to increasing the efficiency of public investment because of improved execution and better coordination of public, private partnership welcome labor participation (Rarick, 2011).
The Morocco economy has much potential that can be cultivated by focusing on the transparent involvement of private companies (White, 2015). The standard of life and per capita income in Africa can be increased by the increased involvement of youth in different sectors. Moreover, rural-urban migration in different areas is contributing to economic development. Young Moroccans seek employment opportunities in the economy, and if phosphate production is accelerated by advanced technology, the quality of the labor force can be improved. By improving government involvement, the political & economic spheres can be accelerated that enhance the rapid economic development and growth of certain sectors (Fabbe, K. et al. 2018). Authorities in Morocco are focusing on advanced structural reforms since it will be helpful to accelerate capital. The economy needs to reduce inequalities, remove corruption, and create job opportunities for the business environment. There should be mutually reinforcing reforms like social participation & education practices that will empower vulnerable groups.
References
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