Inclusive green growth in Morocco : a set of case studies

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Inclusive Green Growth in Morocco

A set of case studies

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i

Acronyms and abbreviations

ABH: river basin agencies

AfDB: African Development Bank AMDI: Moroccan Investment Agency CBD: Convention on Biological Diversity

CESE: Economic Social and Environmental Council

CNEDD: National Charter for the Environment and Sustainable Development ECA: Economic Commission for Africa

EIB: European Investment Bank GEF: Global Environment Facility

GIZ: Deutsche Gesellschaft für Internationale Zusammenarbeit; German international cooperation agency

HCEFLCD: High Commission for Water, Forests and Combating Desertification HCP: High Commission for Planning

INDH: National Initiative for Human Development

IRESEN: Research Institute for Solar Energy and New Energies MANE: Environmental Upgrading

NES: National Environment Strategy

NSDS: National Sustainable Development Strategy

ONEE: National Office for Water and Electricity (ex-ONEP: National Office for Drinking Water)

PAGER: Integrated Programme for the Collective Supply of Drinking Water to Rural Populations PERG: Global Rural Electrification Programme

PMV: Green Morocco Plan

PNA: National Sanitation Programme

PNDM: National Household Waste Management Programme PNEEI: National Programme for Water-saving in Irrigation PNRR: National Programme for Rural Roads

RIC: Regional Investment Centres

SDRA-V: Sustainable Development Report on Africa V SIE: Energy Investment Company

SPDE: Integrated System for Sustainable Protection of the Environment TOE: tonne of oil equivalent

UNDP: United Nations Development Programme UNEP: United Nations Environment Programme

Note: the acronyms related to Moroccan organizations have been left in their French version, for ease of user reference, with an English translation of their full name.

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v Acknowledgements

The authors of this report, which includes a series of case studies on inclusive green growth in Morocco, wish to express their thanks to Josué Dioné, Director of the former Food Security and Sustainable Development Division of the Economic Commission for Africa (ECA) and to Fatima Denton, Director of the ECA Special Initiatives Division, for their advice.

Isatou Gaye, Chief, Green Economy and Natural Resources Section of the Special Initiatives Division, led the study, made suggestions on content and supervised the preparation of the report. The team responsible for the report comprised Yacouba Gnègnè, Marieme Bekaye, Mathilde Closset, Somlanare Romuald Kinda, Charles Akol, Benjamin Mattondo Banda, Andrew Allieu, Richard Osaliya and Alessandra Sgobbi.¹ Ms. Lamia Zouiten, who was commissioned to produce an information document, worked with the team to prepare and complete the report.

The team was fortunate to enjoy contributions and constructive comments from the experts who took part in the special expert group meeting on the fifth edition of the Report on Sustainable Development in Africa, organized in December 2013 by ECA, in cooperation with the United Nations Environment Programme, the United Nations Organization for Industrial Development, the United Nations Development Programme and the Food and Agriculture Organization of the United Nations. We wish to extend our thanks to all the experts for their respective contributions.

We are also grateful to Martha Messele, Tsigereda Assayehegn, Rahel Menda, Asnakech Megersa and Gezahegn Shiferaw for their assistance with administrative and organizational issues.

Lastly, we wish to express our thanks to Demba Diarra, Chief, Publications Section, and his team, including Marcel Ngoma-Mouaya, Teshome Yohannes and Charles Ndungu, for their efficient handling of the editing and processing of the text and proofreading, design and printing of the report.

1Currently working at the Joint Research Centre of the European Commission, at the Institute of Energy and Transport.

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vi

Summary

Context and introduction

This report was commissioned by the Economic Commission for Africa (ECA) to identify and evaluate good practices for inclusive green growth in Morocco. In this context, the main objective of the consultations was to produce a study documenting a series of case studies on inclusive green growth in certain sectors of the Moroccan economy. The report helped to inform the Fifth Sustainable Development Report on Africa (SDRA-V) on the theme of: “Achieving sustainable development in Africa through inclusive green growth”.

The methodology comprises a literature review, consultation with the various parties concerned and an analysis of the successes, challenges, good practices and lessons learned in the implementation of inclusive green growth activities. Also examined was their involvement in public action, including the public policy options to promote inclusive green growth in selected sectors.

By documenting the successes, challenges, good practices and lessons learned in the field of inclusive green growth in Morocco through a series of case studies, this report will facilitate networking of knowledge on the subject between member States and the regional and subregional organizations. The objective is to foster the sharing of best practices and to amplify and ramp up successes.

Socioeconomic and environmental background

Analysis of the Moroccan situation shows that the country has not remained deaf to the multifaceted international crisis, simultaneously financial, economic and environmental, resulting in a greater commitment on the part of Morocco to successfully transitioning towards a development model which integrates the different aspects of sustainable development.

In Morocco, the challenges posed by climate change are a reality. In particular, the advance of arid and semi-arid zones has led to a worsening of the phenomenon of desertification, together with a decline in water resources. For example, in 2012, drought caused economic growth to drop when it caused a significant decline in agricultural added value. The energy bill continues to be the major cause of the Moroccan trade deficit and constitutes a limiting factor in the growth of GDP. The country imports around 97 per cent of its energy needs and spends substantial amounts on subsidizing the demand for fossil fuels.

This report seeks to show how Morocco has embarked on the path of socioeconomic development which is laying the foundations for an inclusive green economy. It presents the principal socioeconomic characteristics of the country, the acceleration of socioeconomic development over the last decade and traces the recent political, institutional and regulatory developments in the country, together with developments in terms of sectoral policies that help to shed some light on the situation in Morocco.

Inclusive green growth in Morocco

Commitment to environmental issues in Morocco has gradually gained ground over the years. The two speeches of King Mohammed VI on the occasion of the Throne Day

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vii festivities in 2009 and 2010 respectively served to expedite environmental action. For example, the national charter for the environment and sustainable development (CNEDD) represents a major turning point in Moroccan institutional reforms. This decision was the starting point for political action designed to ensure consistent and compatible economic development, protection of the environment and social well-being. The new Constitution puts the finishing touches to the institutional aspect of environmental protection and sustainable development since several of its articles make reference to them. Lastly, the Moroccan mechanism is rounded out by a reinforced legal framework; strengthened monitoring, evaluation and prevention tools; the creation of observatories of the environment and sustainable development; the definition of the sustainable development indicators; the creation of the national and regional environmental impact studies committees; and the reinforcement of economic and financial instruments with the creation of funds.

A series of case studies on inclusive green growth in Morocco

The national liquid sanitation and wastewater treatment programme (PNA) consists of rehabilitating and extending sanitation networks, reinforcing the storm drainage system and building sewage treatment plants for 330 towns and urban centres with over 10 million inhabitants. Its key aim is to effect the improvement of water basins at the environmental level. The programme is expected to result in an overall connection rate to the basic sanitation system of 75 per cent by the end of 2016, compared with 72 per cent at present, 80 per cent in 2020 and 100 per cent by 2030, and the capacity to treat and reuse or recycle 100 per cent of the wastewater collected by 2030, compared with the current 25 per cent.

The national initiative for human development (INDH) aims to reduce poverty, insecurity and social exclusion through actions in support of income-generating activities, capacity-building, enhanced conditions of access to basic services and infrastructures and support for highly vulnerable people. The first phase of INDH 2005–2010 posted positive results, encouraging the authorities to launch a second phase, INDH 2, scheduled to run for the period 2011–2016.

The national programme for water-saving in irrigation (PNEEI) aims to move over to localized irrigation of almost 550,000 ha in 15 years, through five elements: (1) the collective modernization of areas of large scale hydraulics; (2) individual modernizations; (3) increasing the value of agricultural production; (4) strengthening technical advice; (5) and other supporting measures such as simplifying the procedures for the award of State financial assistance and organizing the professions involved in the sector, standardization, etc.

Launched in 1995, the global rural electrification programme (PERG) is a response to the growing isolation of the rural community in a context where access to energy is a government priority which has never wavered over time. In terms of the expected outcomes, while only 18 per cent of the rural population was connected to the electricity grid before the launch of the programme, an electrification rate of almost 100 per cent is scheduled by 2010.

The Moroccan solar plan is intended to put in place a capacity of 2000 megawatts by 2020. Through the development of solar potential, the project will contribute to the reduction of energy dependency, the preservation of the environment through restrictions placed on greenhouse gas emissions and the fight against climate change. It is planned that by 2020

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viii installed electrical power generated by renewable energy will account for 42 per cent of the supply, including 14 per cent of solar origin.

The national household waste management programme is designed to restore the municipal waste management sector in Morocco to full working order. It provides for the collection and cleaning of household waste, achieving a collection rate of 90 per cent by 2020 and 100 per cent by 2030. The programme was initiated in 2007 and revised in 2008 to benefit from improved planning and to bring its objectives into line with the country’s new undertakings, as well as ensure its integration into other initiatives under the country’s environmental upgrading programme (MANE).

Lessons learned, challenges and opportunities for inclusive green growth in Morocco The focus of this report is on agriculture, energy and waste management, which incorporate significant layers of green and inclusive growth. Although Morocco seems well equipped to make the green economy a priority, the report nevertheless reveals some problems and shortcomings encountered in the various cases studied and in the implementation of the inclusive green economy.

The integration of the various green programmes is not sufficiently developed at regional and local levels. The green economy enjoys only weak State support when it comes to mobilizing dedicated private financing, research and development activities and innovative technology. It is further limited by such factors as the failure of the environmental legislative framework to be effective and the lack of financial incentives to develop the green professions.

In terms of measures to be put in place, this study is in line with the measures proposed by the Moroccan Economic, Social and Environmental Council (CESE). These consist of defining an overarching transition strategy towards a green economy; developing manufacturing sectors associated with the green economy; preparing a strategy to anticipate what skills will be needed and to develop capacities for innovation; strengthening the tools of governance of the green economy strategy on a national and regional scale; developing environmental education and awareness; establishing financial mechanisms dedicated to the development of the green economy; implementing the existing arsenal of environmental legal provisions by putting in place monitoring and follow-up instruments; and developing the environmental dimension and social behaviour.

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1. Introduction

Against an international background marked by many concurrent crises – financial, economic, energy and climate-related – Morocco is conscious of the need to launch its transition towards a new model of development that is more respectful of human and natural resources. The issue is to maintain its pace of development while increasing the competitiveness of its key sectors, despite the constraints.

Concerning the climate, the advance of arid and semi-arid areas has resulted in worsening desertification – accelerated by land degradation – together with the decline in water resources and the need to work on adaptation strategies such as oases in particularly vulnerable regions, or in key sectors such as agriculture. With its agriculture still largely dominated by crops grown in bour (rain-fed) zones (81 per cent of the usable farmland) and therefore dependent on rainfall, vulnerability to the impacts of climate change is still a reality.

The country also imports about 97 per cent of the energy consumed, which has a considerable impact on the balance of payments and the country’s capacity to be competitive.

The energy bill represents 11 per cent of gross domestic product (GDP) and 52.6 per cent of exports. In addition, predicted needs are based on the expectation of a 9 per cent growth rate per annum by 2030, which is likely to aggravate the situation. Energy sector subsidies represent 90 per cent of spending from the compensation fund. This creates two problems:

first, balancing and forecasting the budget and second, the competitiveness of the cost of the kWh obtained from a renewable source versus electricity from fossil fuels, which is currently subsidized.

As far as demographic issues are concerned, life expectancy has increased by 25 years in the space of 50 years, resulting in a restructuring of society and the emergence of new problems related to the demographic transition. These concern mainly the relative increase in the number of adults in relation to dependents, a situation which can be regarded as presenting an opportunity. However, the pressure of the job market, especially among the youngest members of the work force, makes it impossible to take fullest advantage of the situation. It is estimated that 2015, the additional demand in the job market will be 400,000 jobs per annum, on average, a significantly higher level than the 217,000 jobs created annually, on average, between 1995 and 2003. The second issue concerns increased household consumption, resulting in greater pressure on resources (energy, water, land, etc.). Furthermore, the fertility rate dropped from 7 children per female in the 1960s to 2.2 in 2010, a rate comparable to the average of some developed countries, which has led to a sometimes complicated redefining of the role of women in society. The population of Morocco will reach about 38 million by 2025, 68 per cent of it in urban areas. This will create new demands for infrastructure and social and economic services. The study carried out by the Ministry of Agriculture estimated the loss of irrigated agricultural land through urbanization at 40,000 hectares.

It remains a complicated exercise to ensure respect for macroeconomic balances (debt, budgetary balance), combined with the demands of the different sectoral strategies, the development of infrastructures, initiatives to foster the opening up of the rural world and provide generalized access to education and health. Both budgetary balance and investment needs are now threatened by the compensation fund, which is subsidizing basic goods (sugar, oil, wheat, gas, etc.) and currently has to deal with the boom in domestic consumption and the vagaries of international prices of raw materials. It is no longer possible to sustain the

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10 imbalances in the compensation fund which, in some years, may amount to between 75 per cent and 98 per cent (2011) of the investment budget.

In addition, with regard to the country itself, geographical, ecological and climatic diversity has created significant economic imbalances, which have worsened over time: a strong concentration of wealth in only a few regions, the inaccessibility of the southern regions and the mountainous areas, urbanization and urban sprawl. Some imbalances can be redressed by the effective implementation of advanced regionalization, especially of the decentralization and devolution processes. However, this process must be supported by capacity-building and rigorous oversight because there are significant risks involved in such transfers of power and jurisdictions.

Lastly, there is a low level of mobilization of knowledge and innovation. If Moroccan research is to be more effectively integrated into the framework of global research and development, it will be necessary to attract international skills and review the cooperation strategy. On the question of providing funding for research, although the research strategy provides for an increased share of GDP (3 per cent) to be devoted to it, this budget has never actually been higher than 0.73 per cent. Research and development and patents have been allocated only a very small share of the contingency plan, while the bulk of the funding has gone to research students.

In an effort to deal with these issues, the country has adopted voluntarist policies and is pursuing the necessary reforms in its socioeconomic spheres; it is also gradually improving its institutional and regulatory arsenal concerning the environment, although its implementation remains problematic.

This report seeks to demonstrate how Morocco has adopted the path of socioeconomic development that is laying the foundations of an inclusive green economy.

The first part describes the main characteristics of the country and reviews the acceleration of socioeconomic development over the last decade, working in a number of areas, often accompanied by in-depth reform in the following sectors:

Democracy: The new Constitution provides for the election of the government by universal suffrage and marks the transition towards a new model of society which puts human beings at the heart of development.

Institutions: The establishment of institutions responsible for strengthening action in sustainable development (High Council for Land Development; High Council for Water and Climate; Economic, Social and Environmental Council; National Environment Council, etc.) represents a step forward. However, these institutions need to operate with increased vigour within a more clearly defined field of action.

Laws and regulations: Drafting of many environmental laws, preparation of the draft framework law for the environment and sustainable development.

Sectoral initiatives: Strategic sectoral approaches, quantified targets, programme contracts and voluntarist policies. The draft framework law on the environment and

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11 sustainable development², currently being debated in parliament, requires the systematic use of strategic environmental assessments of the different strategies, plans and programmes being implemented.

The second part presents a series of case studies, illustrative of Morocco’s action in the sphere of inclusive green growth. There is an initial explanation as to how inclusive green growth is a real opportunity for the country in the light of the recent development strategies and constraints. Following the explanation of the opportunity for inclusive green growth, the study shows how the case studies were selected on the basis of quantitative and qualitative criteria. Each case presents a development problem encountered, the strategies used to overcome the constraints and, lastly, the regulatory framework which either fosters or hinders the implementation of inclusive green growth.

Lastly, the report synthesizes the best practices which can potentially be reproduced, as well as the lessons learned through these detailed case studies. This last section also proposes some opportunities for improvement.

2. Economic, social and environmental situations

Morocco is situated in North-West Africa, with both Mediterranean and Atlantic seaboards. Over the years, its proximity to Europe and its geostrategic position as a gateway into Africa have made it a cultural and linguistic hub, creating diversity in both its population and its trade. Based on its age-old focus on trade, Morocco has chosen a market economy, opening up to the world outside through free trade agreements and attracting foreign investment.

2.1 Economic situation

Over the last 10 years, Morocco has achieved a satisfactory economic performance, as shown in the graph below. The growth rate has never dropped below 3 per cent,³ despite the international crisis of 2008. The implementation of sectoral strategies coupled with major investment, through continuous voluntarist policies, is bearing fruit. In fact, as a ratio of GDP, the rate of investment continues to exceed 35 per cent. It should be noted that in economic history such figures have only been observed in the East Asian countries (China, the Republic of Korea, etc.).

2PLC 99-12.

3 Nominal GDP (DH billions), at current price (base price1998). Source: High Commission for Planning – National Accounts.

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12 Figure 1

Evolution of GDP and economic growth (current price, base price 1998)

Source: High Commission for Planning – National Accounts (Morocco).

Economic growth has, however, remained volatile and inadequate in relation to the demand for jobs, which has resulted in a high unemployment rate, especially among graduates and young people, and has contributed to aggravating the level of poverty. The country’s insufficient economic growth can be attributed to the negative contribution of foreign trade, the fact of the growth of imports significantly outpacing that of exports and by continuing low total factor productivity. On the other hand, however, the acceleration of development creates new challenges such as worsening pollution, increased volume of waste, exacerbation of social differences and problems of governance. The structure of GDP seems to have stabilized with the expansion of the tertiary (services) sector (about 56 per cent) and the continuing very strong contribution of the agricultural sector. Each production sector now has a strategic road map, which improves the visibility of national and international economic operators in the sphere of investment.

The implementation of these strategies has had a positive impact on the sectors concerned, enabling the upper limit of public policies to be set while encouraging private sector investment. These results have been achieved with the help of complete restructuring of the financial sector in the 1990s together with the reforms made to liberalize the economy.

The investment charter of 1995 and the many free trade agreements (European Union, United States, Turkey and the Arab countries) signed in the 2000s signalled the beginning of this move towards openness. Coupled with the sectoral strategies, this charter gives the investors visibility and creates the structure for both these sectors and for entire swathes of the Moroccan economy. The volumes of foreign direct investment increased tenfold between 1996 and 2011. In addition, the changes in the institutional framework with a regional

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13 approach and “one-stop shops”, the regional investment centres, designed both to facilitate the creation of new business and to establish the Moroccan investment promotion agency (AMDI), have made a substantial contribution to reinforcing the country’s attractiveness for investors.

However, there are still challenges to be faced. The trade deficit continues to widen, thereby worsening the balance of payments deficit. Morocco is struggling to improve the creation of added value. It continues to export low-priced products (agriculture, phosphates, etc.) while its imports are following the opposite trend. The implementation of an inclusive green economy constitutes an opportunity to create sustainable perceivable value on export markets (organic products, environmentally friendly, fair trade, etc.).

Very little consideration is given in the various sectoral strategies to the goals fixed by the cross-cutting thematic strategies such as all the environmental strategies on biodiversity, climate, water, etc. The sectoral system means that more specific action plans can be formulated, but the integration and overall consistency of public policies are under threat. The quest for synergy and increased convergence is essential if sustainable development in Morocco is not to be compromised.

2.2 Environmental situation

2.2.1 Deterioration of the climate situation

The following maps show the deteriorating climate situation in Morocco. The arid and semi-arid areas have made substantial gains while the semi-humid and wetlands areas have seen a considerable reduction in area. This development has had a visible impact on biodiversity, rainfall, agricultural production and subsequent investments to adapt to these changes. The maps also illustrate the profound differences between regions. Availability of water, for example, is very unevenly distributed across the country.

Figure 2

Evolution of the aridity index

Source: National Meteorological Office (Morocco).

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14 Given this situation, the State authorities have implemented investment policies in large and medium-scale water infrastructures in an effort to maintain the development of the agricultural sector, which currently employs almost 43 per cent of the working-age population. However, climate change now poses new challenges in a context of advanced regionalization. How can territorial equity be ensured when geographical and climatic disparities are widening? How can agricultural development and sustainability be combined?

2.2.2 Protection, conservation and rehabilitation of biodiversity

Morocco is home to a rich biodiversity of fauna and flora as well as ecosystems, thereby occupying second place in the Mediterranean region. However, this biodiversity is subject to pressures whose consequence is that almost 600 species of animals are threatened, including 40 per cent of species of arthropods, and also 1,700 species of plants of the 7,000 identified. The chief causes of these various threats are demographic pressure and urbanization, inappropriate agricultural practices, deforestation, overgrazing, pollution, overfishing, transport, mass tourism, fires, poaching and invasive species. Climate change is also affecting the degradation of biodiversity and exacerbating its environmental impact. In fact, decreased rainfall (a decline of 4 per cent between 2000 and 2009) and the greater frequency and increased duration of periods of drought are subjecting ecosystems to various stresses and reducing their productivity.

In response to this situation, Morocco has devised solutions to preserve its biodiversity and reduce the threats hanging over it. In the context of the implementation of the Convention on Biological Diversity (CBD), Morocco has established a national committee on biodiversity, responsible for implementing the convention and acting as the coordinator between the departments and institutions concerned. Secondly, a national strategy and a national action plan for biodiversity have been adopted in response to national conservation needs and the rational and sustainable use of biodiversity. It has become necessary to update the strategy and its action plan to incorporate the new circumstances. The Department of the Environment has prepared a proposal to update the national strategy and a programme of work on biodiversity, covering the period 2011–2020. The total cost of the scheduled actions amounts to $1.527 million, cofinanced by the Global Environment Facility (GEF). Other plans and programmes have been initiated for the protection of biodiversity⁴.

In addition, a documentation centre and a mechanism to distribute information on national biodiversity have been created, with the support of the United Nations Environment Programme (UNEP). They include an information system on Moroccan biodiversity management and a portal to Moroccan biodiversity; work to update this portal is ongoing.

However, the inventories remain incomplete, an area where much still needs to be done. A number of actors are responsible for biodiversity management: ministerial departments, public, semi-public and private institutions, etc., and to date there has been no coordinated and integrated approach with a genuine vision.

It is not within the scope of this report to present every environment along with its problems. However, we believe it is useful to present some soil-related issues, an environment often overlooked by the State authorities.

4The master plan for the development and management of protected areas; the national plan for watershed management; the master plan for reforestation; the master plan to combat forest fires; the national programme to combat desertification; the Halieutis plan for maritime fishing.

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15 Soils and sustainable land management

The soil is a limited resource which must be protected. It plays a number of key roles in the environment: maintaining natural vegetation, drainage, water infiltration, etc. The degradation of soil quality is partly responsible for the decline in agricultural yields, dam siltation and the degradation of the natural landscape. Consequently, soil protection helps to reduce the environmental impact of activities, but this requires a thorough knowledge of the situation. But only an area of 22 million hectares, or 31 per cent of the national territory, has been explored. Such a poor level of knowledge has created a major obstacle to the implementation of large-scale national programmes.

Concerning management instruments, it was found that a series of measures related to environmental protection or to other public policy sectors such as agriculture or rural development is being implemented over scattered areas. This diversity or even conflict in the areas of implementation is compounded by inadequate protection and sustainable management of the land. Consequently, this limits the effectiveness of the measures undertaken to mitigate the environmental impact of activities and the protection of these resources.

2.3 Social situation

Currently, Morocco is undergoing many sociocultural changes and economic transformations which have helped to change its demographic and social dynamic. The following table presents some key socioeconomic indicators.

Table 1

Indicators in the field of the fight against poverty Indicator

Poverty rate (%) 8.8

Per capita GDP (in US dollars) 1546

Per capita GDP growth rate (per cent) 1.55

Unemployment rate (per cent) 10.8

Source: High Commission for Planning (Morocco).

Because of improvements in sanitary conditions and greater access to healthcare, life expectancy now stands at 74.8 years, compared with only 47 years in 1962. Consequently, Morocco is in a much better position to control its human development, because of its advanced demographic transition and a natural growth rate of 1.32 per cent in 2010 compared with 2.7 per in the 1960s as a result of the decline in the birth rate and an improved infant mortality rate.

However, there are still sizeable social issues. The demands made by the youth of the country on 20 February 2011 were unequivocal: an improvement in the standard of living, to be achieved by better access to employment (unemployment rate stabilized at 10 per cent and the informal job sector is estimated by the High Commission for Planning (HCP) at almost 80 per cent of total employment), better distribution of wealth and greater social cohesion.

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16 One of the main problems remains the contrast between the growing prosperity of its urban sector and the insecurity of its rural sector. One of the direct consequences of this situation is the upswing in the rural exodus phenomenon; this results, first, in pressure on urban structures which are having difficulty in keeping pace, leading to the emergence of shantytowns and unemployment and, second, a loss of interest in the countryside, which is gradually being stripped of its active population, with its community becoming less and less permanently rooted.

Deciding to reverse this trend, the Moroccan State authorities adopted a historic course in the development of the country. In two decades, the various actions rolled out have actually slowed down the exodus by using three levers to open up the rural sector (accessibility, supply of drinking water and electricity).

Table 2

Indicators related to opening up the rural sector in Morocco

Indicator 1995 2012

Served by a rural road (PNRR 1 & 2) 36 per cent 80 per cent Access to drinking water in the rural sector (PAGER) 14 per cent 92 per cent Access to electricity in the rural sector (PERG) 15 per cent 97.4 per cent Source: Ministry of Equipment and Transport (PNRR), National Office for Water and Electricity (PAGER and PERG).

Nevertheless, still not enough has been done, even though the economic development strategies attempt to incorporate the rural element. According to the High Commission for Planning, 17 per cent of the population lives on an income of less than DH 2,000 and 64 per cent of the population on an income of less than DH 5,000, while 8 per cent of the population has an income in excess of DH 12,000. The relative poverty rate dropped from 21 per cent in 1985 to 9 per cent in 2007, which marks a significant improvement, even if poverty remains very much present in the rural sector, as demonstrated by the following figures.

Table 3

Evolution of the relative poverty rate

1985 1998 2001 2007 2008

Urban 13,3 9,5 7,6 4,8 4,7

Rural 26,9 24,1 25,1 14,5 14,2

Total 21 16,2 15,3 9 8,8

Source: High Commission for Planning (Morocco).

3. Potential for inclusive green growth in Morocco

3.1 Inclusive green growth, green employment and entrepreneurship The terms “green employment and entrepreneurship” are linked to the concept of the inclusive green economy. Green employment is a relative and constantly changing concept. It refers to a whole range of professional profiles, skills and educational contexts.

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17 Green entrepreneurship (or eco-entrepreneurship, or sustainable entrepreneurship) is a form of entrepreneurship which integrates environmental, economic and social factors into the business plan and offers innovative solutions concerning what is known as responsible production and consumption⁵.

The Economic, Social and Environmental Council (CESE) states that the concept of the green economy represents potential for sustainable growth and job creation and is a new approach to sustainable economic and human development. Studies of the mapping of green employment and entrepreneurship in Morocco, recently carried out by the Department of the Environment, supported by UNDP in the context of the youth employment support programme “YES Green”, together with the initiatives taken in some pilot regions, serve to demonstrate and confirm the existence of substantial potential for employability and entrepreneurship:

 Based on the pyramid structure given backing in the draft of the green employment training strategy (Department of the Environment), the small trades and medium trades, at the base of the employability pyramid in terms of training levels, are proving to be trades with mass employability and more appropriate to the needs of the sectors with potential to generate employment (sanitation, waste, renewable energies).

 On the other hand, trades related to cutting-edge engineering skills have a very low level of employability. Consequently, this segment of the green economy, which consists of fulfilling the need for green jobs through average training and education profiles, constitutes an excellent opportunity to enhance the employability of the country’s youth and thereby help to reduce unemployment.

 Other issues concern the national training and education systems. These must be adapted to retrain those selected, who will be assigned to help the transition to a new green and sustainable economy. Consequently, some environmental professions must be integrated into the vocational training system and certain jobs on the vocational training map must be “greened”, for which an approach is currently being formulated.

There are a number of initiatives to foster entrepreneurship, including in particular: the national initiative for human development (INDH), which supplies opportunities provided by the process to integrate environmental and social dimensions into projects such as the Moukawalati, Moubadara and Tatmine programmes, which provide support for the cooperatives. The mapping process has also analysed other initiatives which are worth improving and replicating, such as local subcontracting micro-enterprises set up by the Moroccan national drinking water agency (ONEP), and training and establishment of networks of nature activity leaders by the High Commission for water and forests and combating desertification (HCEFLCD).

3.2 Key levers for the development of environment-related professions and their employability

Despite all these initiatives, there are extremely few appropriate partnership and coordination mechanisms among the actors concerned to target needs more effectively and to

5 Brahim Soudi - Head of the Department of Natural Resources and the Environment at the Institut agronomique et vétérinaire Hassan II for Finances News Hebdo, 21 March 2013.

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18 increase the employability and insertion of young people into the job market in general and into the green job market in particular.

To sum up, the access of young people to financing seems to act as a major constraint on the landscape of the job market and business in general. Specific measures will need to be put in place in the light of the CESE approach and of the strategic recommendations made by the departments involved in training, employment and the environment and should draw inspiration from successful national and international initiatives.

The regulatory framework in the environmental sector and incentive measures are also indispensable levers for the development of environment-related jobs and employability within them. The international reference index shows:

 The importance of a regulatory framework which constitutes a driving force in the use of new expertise. In fact, a number of environment-related jobs offer no employability unless the environmental laws are implemented, along with the associated environmental controls and audits.

 The need to establish incentives and regulations to encourage businesses to invest in green technology. Effective financing systems and tax relief will help them to move towards employment strategies respectful of the environment and to guarantee ecological innovation and production.

Another issue relates to the fact that employability in environment-related jobs depends very much on the level of investment in the green sector. Without investment, few jobs will be created and there might even be the risk of job losses, as was stated in the European Parliament in 2010.

3.3 Agriculture: a necessary decoupling

In 50 years, the agricultural sector has made great strides in terms of modernization and diversification. With 4 million jobs, it is the country’s top activity sector (43 per cent of all households countrywide). In the rural environment, agriculture employs almost 80 per cent⁶ of the working population.

The added value of the agricultural sector has increased by 2.5 in the space of 10 years, reaching DH 114 billion in 2011 and contributing 15.5 per cent of GDP. Investments made in major dam schemes over the last 50 years, combined with efforts to modernize the productive agricultural sector, have facilitated better management of the impacts of cycles of drought.

Figure 3 demonstrates this vulnerability since significant fluctuations can be seen over the years (a decline of 20 per cent during the drought years of 1995 and 1996).

6 Ministry of Agriculture and Maritime Fisheries (MAPM) (2010).

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19 Figure 3

Evolution of agricultural GDP (current prices, base 1998)

Source: High Commission for Planning.

International agricultural imports represent between 14 and 24 per cent of total imports, while agricultural exports represent between 15 and 21 per cent of total exports. This is one of the few sectors in which the balance of trade is more or less equal.

Agricultural sector and inclusive green growth: promoting a dynamic economy, employment and better living conditions

Green Morocco Plan

The global context marked by the challenges of food security, climate change, rising prices of agricultural commodities and the fight against poverty has forced Morocco to review its agricultural strategy and upgrade, restructure and redefine its missions. This was the context in which the new Green Morocco Plan (PMV) was drawn up.

This new strategy is based on an overall approach which covers all the actors in relation to their own objectives. Moreover, it rests on two major pillars: modern agriculture (pillar 1) and solidarity (pillar 2).

Pillar 1: Modern agriculture with high added value should involve 400, 000 farmers, and generate DH 150 billion of investment in 900 projects.

Pillar 2: The inclusive agriculture strategy involves 600, 000–800, 000 farmers.

Planned investment stands between DH 15 and 20 billion. Three million rural inhabitants should see an improvement in their living conditions.

Very significant impacts related to the growth of agricultural GDP and the fight against poverty are expected by 2015. In fact, considerable spinoffs can be expected if financial, institutional and managerial resources are rolled out and the appropriate reforms are made:

 A significant improvement in agricultural GDP, exports and private investments;

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 An effective fight against poverty on a greater scale in the countryside and also in the disadvantaged peri-urban areas;

 A marked improvement in buying power and the price/quality ratio for consumers on the national market.

Five years after the launch of the Green Morocco Plan, the first results are encouraging. In terms of investment, DH 53 billion were invested between 2008 and 2012, which has allowed additional added value of DH 23 billion to be generated. Agricultural GDP also increased by an average of approximately 32 per cent during the period 2008–2012 compared with the benchmark period of 2005–2007, while production increased by 43 per cent in 2011–2012 compared with the same benchmark period.

Additional cultivated areas reached 750, 000 hectares (increase of 11 per cent), the number of tractors rose from 5 to 6.8 units/1, 000 hectares (increase of 36 per cent) and the sectors’ yields recorded upswings varying between 6 per cent for citrus to 65 per cent for cereals.

Similarly, the market value of processed commodities increased by 8 per cent, the share per individual in available food commodities improved by about 14 per cent, while the food commodities price index remained stable at around 13 per cent, compared with 33 per cent at the international level.

Although the results are encouraging at the moment, there are a number of problems which have hindered the implementation of a truly sustainable and durable agriculture. Of course, improved productivity and yields were necessary in order to be competitive, but with the implementation of a more intensive form of agriculture, new challenges are emerging:

 Pressure on resources, such as water and land, but also increasing energy needs;

 Pollution from waste generated (agricultural film, pipes and ducts for irrigation), but also an increase in pesticides and fertilisers;

 The place of traditional agriculture, with the sectional and “aggregator” model.

In principle, aggregation can provide a solution, but if this process is not conducted using a win-win approach, there is a real risk of the parallel marketing channels becoming more entrenched;

 The development of the sector and in particular the improvement of the agro- industrial fabric.

3.4 Energy: the road to renewables

One of the main characteristics of the energy sector, which contributes 3 per cent of GDP, is that it is highly capital intensive. The sustainability of the sector and of the strategies used within it depends essentially on the capacity of the country to secure the necessary investment and to develop the relevant industrial sector. Annual investment needs are estimated at around DH 9, 000 billion.

3.4.1 Ever-increasing needs to support the socioeconomic development of the country

Based on a history of consumption showing annual growth of 8 per cent for the period 2003–2007, two possible scenarios have been defined: a basic scenario with growth in

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21 demand of 7 per cent, then of 6 per cent with effect from 2017, and a second disruptive scenario with growth of 9 per cent until 2012, and 8 per cent thereafter.

Figure 4

Growth in demand for electricity in GWh, 1999–2011

Source: Ministry of Energy, Mines, Water and the Environment, Department of Energy.

In both scenarios, energy needs increase strongly, requiring the mobilization of additional resources.

An analysis of the main energy consumer sectors shows that transport and industry respectively account for 34 per cent and 23 per cent, similar to levels observed in more developed countries. It is worth identifying certain elements, including:

 Household consumption (property), which still has tremendous room for expansion, hence the need to speed up energy efficiency in buildings as well as creating awareness among the population;

 The still very high impact of the agricultural sector which is set to increase with the implementation of the national programme for water saving in irrigation (PNEEI);

 The potential for growth in the tertiary sector.

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22 Figure 5

Structure of the demand for energy in Morocco and in France

Source: Ministry of Energy, Mines, Water and the Environment, Department of Energy.

3.4.2 Supply is dominated by oil products

In 2010 and 2011, the following data were recorded on the distribution of energy sources:⁷

 2010: Oil: 66 per cent; natural gas: 4 per cent; coal: 23 per cent; renewable energy: 7 per cent

 2011: Oil: 68.8 per cent; natural gas: 4.6 per cent; coal: 22.4 per cent; renewable energy 4.4 per cent

The drop in the share of renewable energies in the energy mix is related to the significant increase (8 per cent per annum) of demand. Currently, the installed capacity of renewable energies cannot keep pace with this demand, which has a direct impact on demand for oil commodities and natural gas. Natural gas maintains its share in the energy mix despite the increased demand because one part (butane) is subsidized via the compensation fund.

7 2010 and 2011 statistics produced by the Department of Observation and Planning of the Ministry of Energy, Mines, Water and the Environment.

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23 Figure 6

Origin of energy consumed

Source: Ministry of Energy, Mines, Water and the Environment, Department of the Environment.

Oil and coal supply 90 per cent of energy consumed, which is an unsustainable structure in terms of pollution and of CO2 emissions and also at the economic level. In an effort to provide sustainable support for the country’s socioeconomic development, Morocco has defined a new energy strategy geared towards energy efficiency and renewable energies.

4. Institutional framework and instruments for the implementation of an inclusive green economy

As is the case in many developing countries, taking account of environmental issues was not a priority for Morocco at a time when its main requirement was to safeguard the fundamentals. Nevertheless, environmental action has gradually increased in strength and the two speeches made by King Mohammed VI during the festivities to mark Throne Day on 2009 and 2010 respectively helped to speed up environmental action.

4.1 Strengthening of environmental protection mechanisms

The determination of Morocco to elevate the environment to the status of a national priority was confirmed at the highest State level. For example:

4.1.1 Strengthening of the institutional framework

In the wake of the Rio Summit in 1992, the country created a ministerial department responsible for conducting the Government’s policy on environmental protection. Many specialist agencies came into being, especially in the sphere of renewable energies. In addition, Morocco has institutions and councils which facilitate consultation and participation of the parties concerned with environmental decision-making agencies (National Council of the Environment, High Council for Water and Climate, High Council for National Development, Economic, Social and Environmental Council, etc.). The new Constitution

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24 enshrines the institutional nature of environmental protection and sustainable development with references in a number of its articles.

Article 31: The State, public institutions and regional authorities shall work to muster all the means available to facilitate equal access of its citizens to their rights: access to water and a healthy environment; to sustainable development.

Article 71: The authority of the law governs, in addition to those matters which are expressly devolved upon it by other articles, the rules on the management of the environment, the protection of natural resources and sustainable development.

Article 152: The Economic, Social and Environmental Council may be consulted by the Government, by the Chamber of Representatives and by the Chamber of Councillors on all economic, social or environmental matters. It gives its opinion on the general guidelines of the national economy and sustainable development.

4.1.2 Strengthening of the legal framework

Considerable progress has been made on the legal front, with the enactment of several environmental laws, as the principal laws on the protection of the environment have been promulgated over the last decade:

Law 12-03 on environmental impact studies makes it mandatory to carry out an impact study for projects that may have negative impacts on the biophysical and human environments as a result of their location. This affects the majority of infrastructure projects, which are submitted to a national environmental impact study committee for ratification if their amount exceeds DH 200 million. The law applies to public or private, natural or legal persons. It sets down specific penalties in addition to those of a general nature related to civil or criminal liability.

Law 28-00 on waste management is designed to monitor and protect human, animal and plant health, water, air, earth, ecosystems, sensitive areas and landscape and the environment in general against the harmful effects of waste, which it defines and classifies; it also sets out obligations concerning waste management and disposal. The law stipulates that waste matter must be capable of being reduced in quantity and harmfulness during its life cycle. There are also requirements in place related to the types of waste. This concerns those who keep, produce and operate waste. Such persons may incur criminal or civil liability.

Law 13-09 on renewable energies is designed to develop national renewable energy sources. It provides a legal framework for the potential creation and operation of power generation plants using renewable energy sources. It specifies the general principles to be followed and the applicable legal system, including marketing and exportation. Implementing decrees should be published in the near future.

Law 47-09 on energy efficiency, capable of forcing companies to carry out energy audits on the basis of a specific consumption threshold, is under discussion. An energy efficiency code in the building sector is being prepared to define the energy efficiency of buildings.

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25 The law on air pollution⁸ targets the prevention of and fight against emissions of air pollutants likely to be harmful to human and animal health, the soil, the climate, the cultural heritage and the environment in general. It applies to any legal person or entity subject to public or private law, possessing, keeping, using or operating buildings, mining, industrial, commercial or agricultural installations, or installations relating to the craft industry or vehicles, engine-driven vehicles or equipment, combustion, waste incineration, heating or refrigeration appliances. It sets out specific penalties.

The Water Law⁹ complements three dahirs (royal decrees of 1914, 1919, 1925) which classify water in the public water domain. It defines a regime aimed at water conservation and protection. It prohibits building on freeboards, rivers and canals and any obstacle hindering navigation or the free flow of water. It also prohibits making or removing any deposit, plantation or crop in the public water domain. The law also makes provision for the institutional management of water and lays down penalties.

Generally, although the existing laws are quite well structured, there are a number of problems which make it impossible to implement them fully.

First, there is a delay in putting in place the decrees or in implementing texts. For example, despite its 72 decrees, Law 10-95 is still not complete since many aspects have not been taken into consideration (wastewater discharge into the sea, desalination of sea water, water saving, water rights, management of exceptional circumstances, management of sludge generated by water treatment plants, etc.). Precepts such as the “polluter pays principle”

struggle for recognition because the definition of the discharge limits has still not been approved since 2005. More recent laws are not operational, for lack of decrees.

Second, there is the question of monitoring the observance of laws and penalties.

Much needs to be done in this sector and the monitoring teams must be reinforced, especially in the regions. The budget of DH 1.5 million ($170, 000) of the Department of Regulation and Control of the Ministry of Energy, Mines, Water and the Environment is not sufficient to cover requirements properly. When offences are identified, very few result in effective prosecution.

4.1.3 Strengthening of the monitoring, evaluation and prevention tools This is being done with the creation of the national laboratory of the environment, observatories (National Observatory of the Environment and regional observatories of the environment and sustainable development), the definition of the indicators of sustainable development, the creation of national and regional committees for environmental impact studies. However, these tools have suffered from a lack of both financial and human resources and the location of these observatories in the regions is not always a straightforward process.

Furthermore, there is scant support from the various production sectors when it comes to environmental problems. Few sectors are cognizant of the harmful effects of their activities and almost no sector monitors the pollution it causes. Control over the environments involved is still in the embryonic stage and there is a more or less systemic absence of data in the regions, with a few rare exceptions. Integrated regional environmental assessments have all come up against this absence of data.

8Law 13-03.

9Law 10-95.

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26 4.1.4 Strengthening of the economic and financial instruments

This has been effected through the creation of national funds (the national environment fund, the industrial depollution fund, the liquid waste and wastewater treatment fund, the energy development fund, etc.) but also using new mechanisms for cooperation (subsidies, agreements, public-private partnership) to support the measures adopted for the protection of resources and environments.

4.2 National charter for the environment and sustainable development (CNEDD) and its implementation process

When he made his speech from the throne in 2009, His Majesty King Mohammed VI called for the drafting of “a national global environmental charter […] in the framework of a sustainable development process”.

The national charter for the environment and sustainable development (CNEDD) represents a major turning point in Morocco’s institutional reforms, because that decision marked the point when political action tried to create consistency and compatibility between economic development, safeguarding the environment and the well-being of the population.

The democratic process of drafting the charter was fundamental because it laid the foundations for interministerial cooperation on which the implementation of sustainable development could be based. Two key reference points serve to implement sustainable development in Morocco:

(i) The framework law for the environment and sustainable development, with regulatory scope and effect;

(ii) The environmental protection system which enables technical implementation.

The framework law for the environment and sustainable development was adopted in the Council of Ministers and Government in December 2012¹⁰. The draft framework law is one of the factors facilitating the swifter implementation of the inclusive green economy and it:

(i) Defines the rights and duties inherent to the environment and to sustainable development incumbent upon natural and legal persons and states the principles which are to be respected by the State, regional and local authorities and the public institutions and State-owned enterprises and their partners, both when their action plans are drafted and when they are executed;

(ii) Strengthens the legal protection of resources and ecosystems by listing the types of measures that the State plans to take to fight all forms of pollution and to procure a high and effective level of protection for the said resources and environments;

(iii) Enshrines sustainable development as a fundamental value shared by all sectors of society, but particularly as an approach to be rolled out in global and sectoral public development policies and places an obligation on the Government to prepare the national sustainable development strategy to enable all parties to become familiar with the key policy guidelines for reference in this area;

10It was enacted in the Official Gazette of 20 March 2014.

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27 (iv) Defines the responsibilities and commitments that all parties concerned – the State, regional authorities, public institutions and State-run enterprises, private companies, civil society organizations and citizens – must respect concerning the environment and sustainable development;

(v) Lays down institutional, economic and financial measures intended to establish a system of environmental governance characterized by the effectiveness and consistency of the actions carried out, especially in terms of evaluation, creation of awareness, education and social communication in the service of the environment and sustainable development;

(vi) Lays the foundations of a system of environmental responsibility combined with a financing mechanism for restitution and compensation for damage caused to the environment and provides for the establishment of an environmental policy to build the capacities of the administration to ensure the proper implementation of the regulation governing the environment and sustainable development.

An integrated system of sustainable environmental protection (SPDE) has been adopted. This steering and management tool is designed to give concrete form to the principles and values of CNEDD in the context of incremental strategic planning which consists of:

 Upgrading the environment (environmental upgrading, MANE) to gain a unidimensional understanding of the environment through thematic environmental approaches given concrete form in programmes essentially designed to be remedial. The principal programmes related to this upgrading initiative are the national household waste management programme and the national sanitation plan.

 Building a national environmental strategy (SNE), making the environment a multidimensional pillar, with a strategic approach deployed in every sector designed to be both preventive and remedial;

 Defining and implementing a national sustainable development strategy which will help to integrate additional aspects, typical elements of sustainable development related to the regions and to the socioeconomic and sociocultural contexts. This strategy, currently being prepared by the Ministry of Energy, Mines, Water and the Environment, analyses such aspects as the potential of the different sectors to facilitate the emergence of an inclusive green economy.

Consequently, the implementation of CNEDD is a serious expression of the government desire to give priority to status sustainable development which must support both decision-making and arbitration.

4.3 Continuing institutional upgrading for the inclusive green economy in Morocco

In principle, the institutionalization of environmental action seems to be gaining ground; nevertheless, many obstacles remain.

Concerning regulations

Although the environmental laws have mostly been put in place, the implementing texts are slow to be instituted. Furthermore, key efforts must still be made in relation to

Inclusive green growth in Morocco : a set of case studies