"Weak" Moroccan economy insulated from global financial crisis
2008-09-30
The Moroccan financial sector is safe from the shocks witnessed recently in the United States and Europe, according to the director of the nation's central bank. Abdellatif Jouahri said the Moroccan economy is less exposed to risk because it is less advanced than the economies of developed nations.
By Imane Belhaj for Magharebia in Casablanca – 30/09/08
 [Imane Belhaj] Morocco's central bank said that the country has not been affected by the global financial crisis because the financial sector is less advanced than those of developed nations. |
The financial crisis affecting the United States and other major world markets has analysts concerned about the health of the Moroccan economy. Abdellatif Jouahri, Governor of Bank Al-Maghrib, Morocco's central bank, recently assured the public that Moroccan banks are not at risk, though the economy could be harmed by the broader economic slowdown triggered by overseas financial malaise.
Jouahri stressed at a press conference held Thursday (September 25th) in Casablanca that Morocco has not been affected by the global financial crisis that began in earnest with the bankruptcy of American financial services juggernaut Lehman Brothers Holdings Inc. Morocco is not vulnerable to the global financial crisis, he said, because the nation's banking institutions cannot afford the kind of activities that caused the US collapse.
The Moroccan financial sector does not have assets in overseas banks facing difficulties, Jouahri said. Overseas assets held by Moroccan banks total just 31 billion dirhams, or 4% of total resources, which he said is an insignificant ratio.
The bank conducted an internal audit to assess the institution's vulnerability, Jouahri said, applying a "control and risk analysis strategy... hinging on the principle of self-assessment by units and their extent of risk."
He said that the bank has re-examined its code of ethics and precautionary rules to strengthen internal procedures in a more volatile international economy. An international audit was also conducted by the World Bank on the rules of pooling cash reserves in the Moroccan central bank.
Abdel Salam Al Sediki, professor of economics at the Mohammed V University in Rabat, supported the bank director's assertion that Morocco's economic weakness will largely insulate it from the financial crisis.
"Our [financial] sector is still in its beginnings and its role is limited," he told Magharebia. "Banking institutions are governed by regulations because our economy is fragile."
The country is not immune to risk, however.
"Morocco shares several complex relations with international institutions," Al Sediki said. "The financial sector knows no nationality and binds countries via web-like interconnections."
As a result, the professor said, it is inevitable that growth rates will decline as 2010 and 2012 approach.
"In France, a country with a strong economy, growth will be nearly 1%. France is a country with which we share 60% of our trade. Thus, our economy is bound to be influenced."
Oxford Business Group (OBG), a UK institution specialising in economic research, stressed that the Moroccan financial sector is not affected by the turbulence in the international financial markets.
OBG maintained in a report recently published by Bank Al-Maghrib that the bank is pursuing efforts aimed at building more flexibility into the banking system, despite the global financial disorder that followed the outbreak of the international credit crisis.
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champion Posted 2008-09-30
Jouahri is lying! There are several people who bought real estate at inflated prices and got loans that they could not pay back, just the same as they did in the USA.
BEN Posted 2008-09-30
It would be nice if the lift in my apartment block went up faster than the rate of inflation and poverty. As for our crisis, it dates back to 1830. We are therefore quite far ahead in this regard and we do not need lessons from anybody, rather we are the ones who should be giving lessons. The proof is that we are getting better with our body now vaccinated and protected. Although it is weaker from the process, this is not unusual, just like our doctor of finance said!
hossam Posted 2008-10-02
The Moroccan economy experienced “weakness” in the 1970s, but, at that time, it could be said that it made a great step in it its development. On the contrary, the United States is really hurting.
Ego Posted 2008-10-02
How could a global financial crisis affect an economy that remains outside the game of international speculative operations? This is like cat pee in an ocean. So, what evidence we have learned (as enunciated by the governor of the Moroccan bank) is that… we need to find evidence!
Ego Posted 2008-10-02
Wassila/Zineb; If you happen to be here, then you have my best wishes for happiness, prosperity and peace for you, your sisters and your honourable family on this Eid. May God inspire us all to do what is best in our lives, both here and there. Amen, Bouhhemis El Ferghani
Hachad Posted 2008-10-02
It is reassuring to see institutions that work with wisdom and not like the vampires of Wall Street, who are thirsty for dollars. There is still much to do and to safely invest in, for example: the country's infrastructure and also in renewable energy. Thank you, everybody.
REDA Posted 2008-10-03
Champion: I will prove that you are a blowhard! In Morocco, they do not have this kind of loan, that is: high-risk or even subprime! If a borrower is not creditworthy, then the bank will not lend to him! Got it! Who is the one who knows who is lying now?
champion Posted 2008-10-03
Reda, What are you on? Subprime mortgages were indeed given to people in the USA, but the bubble burst too quickly and these people have found themselves with loans that are worth more than the market value of their house. Therefore, they are voluntarily moving and leaving their house to the bank. There is no need to think that Americans are crazy. Have a little respect, please!
fatz Posted 2008-10-05
Salam, I had thought that this crisis had an impact on the Moroccan financial system, so what Mr Jouahri announced really surprised me. But, as for me, I think that those who are doing the purchasing—the importers and currency speculators—are going to indeed take advantage of this situation through forward-forward rates and forward transactions so long as the dollar’s value presently continues to decline.
Simo Posted 2008-10-07
hi everybody 3id mubarak said. I have a commant on what Mr Jouahri said that Morocco does't affected by the world financial crisis that is to say that Morocco's economy is healthy and we are far away from the crisis. That great US then must learn the lesson & do what Morocco did in ordser not to have this kind of crisis.
Ironman Posted 2008-10-11
Hey you guys, since you all seem so knowledgeable on Moroccan economical matters, what's your take on real estate? am i the only the only one that thinks that the bubble is bound to burst, or is there evidence that supports the growth?
ahmed Posted 2008-10-12
I think that even if Morocco is not directly affected by this, then in the long term we will still feel the effects of the EU’s and USA’s crises on our economy, particularly in the tourism sector.
USA Posted 2008-11-16
I applied for a loan at the BMCE and they agree to lend me 2,500 thousand at a 13% interest rate because I live in the US and because any of my friends live in Europe have signed off on such loans, not because they want to buy a house, but because they want to buy dozens of them for speculation, selling them for ten times the price in two years. A lot of them have lost their job and many of the rest have, even if they kept their jobs, been faced with inflation such that they cannot honour their loans. That reminded me a bit of what happened in the past, so I quickly grabbed my bags and went back to the US. I do not know what economy you are talking about!? Gas!? Illiteracy!? Unemployment!? Minimum wage!? Is this what development is, having no cities sprout up like mushrooms? We no longer talk about real estate or houses in Morocco; we talk about cities quite frankly. The minimum wage in this country is ridiculous. The Morocco I know is suffering so much that those living abroad are afraid of going back to their country, of making a purchase and of taking out a loan. And, there are even those who are defaulting on their payments just to limit their losses. Let us stop lying to one another: Morocco is part of the Third World. We have nothing and we have never had anything except the protection of a king who does not think about the rich, but about the poor, and that was Hassan II. We have already sold our sea to Spain. The beautiful coast where hotels hosting all nationalities was destroyed and all the Moroccan families living around there were screwed over (for example: Tagazout, Aglou, Essaouira and so on). I do not see how a tourist who comes to Morocco on Air France, stays at Sofitel and then leaves is to our profit. Tourists who come to Tangier, take the train, stay in a Moroccan hotel and eat at a Moroccan place and buy things at bazaars…
khadija Posted 2008-11-30
Why don’t we talk about the crisis in Morocco? When are we going to talk about the crisis in Morocco? Is there another word besides “crisis” that reflects the current situation in Morocco. If you have a response, please contact me by email. –Thank you
abd aslam Posted 2009-02-14
There is no doubt that Morocco was influenced by the world financial crisis. The stock exchange of Casablanca has declined terrifically and horribly. It has lost 10 billion Euros. It is true that the crisis didn’t have a serious impact on banks but banks will certainly suffer of the drop in Maghreb transfers as well as the decline in the revenues of Morocco from tourism which is directly associated with Banks. I think that the author of this article is not well informed about the Moroccan economy in particular or the world economy in general. It beggars belief that the rate of economic development in Morocco is less than other economies of developed economies. Morocco has achieved in 2008 over 6 percent which is a very good progress rate in the world level compared to a progress rate which is mostly less than 3 percent in development economies. The cause for the higher economic progress in Morocco than developed countries is that the Moroccan economy is still in the phase of development and building the economy. As to developed countries, they have a stable and constant. Therefore, we notice that for over a decade these countries have a stable economic progress which doesn’t exceed 3 percent.
Baggy Posted 2009-03-12
The Moroccan financial system is not immune from international financial crisis , that is, the Moroccan banking system is linked to IMF which regulates somehow the international financial system. However, the degree of the Moroccan financial system is not itensively related to international financial system which in the short run is not affecte, but the question that should be arised is that the financial crisis is the end of Markov chain, means that this financial crisis is caused by the economic slow down for more that a decade , and with free trade, franchises the developing countres including Morocco will suffer more than developed countries, the reason for that is the unemployment rate inrease, the private and governement investment decrease, negative trade balance, all these indicators indictaes a slow if not decrease in economic growth.
ismail Posted 2009-04-13
Why has the oil run out? We are not going to be able to go to school to study. Let us look for a solution.
tarek Posted 2009-07-02
Salam alaikoum- Our country is safe for the moment, but we must understand one very important thing about the development of the national economy, namely: the current year’s economic growth is actually in decline and the textile and automobile sector will suffer thousands of job losses. Therefore, it is time to sound the alarm.
Anonymous Posted 22 days ago
let me start by saying that yes, you american are crazy, and yes u american do difine very well and clearly keynes animal spirits, not to mention the pitiful ignorance of ure people... what do u call banks that give away morgages right and left without asking for collateral. oh yes, they were going to package them anyways and sell them off to someone else and rid them selves of the problems they have created. and now, what does the gvt do, they bail out those very banks who have become too big fail who obviously do not think twice to make short term profits while letting the humble tax payers pay the bill at the end for their skeems. whether they did it on purpose or they were just too stupid to see it coming is their problem neways.but the whole world was screwed at the end. yes,economic growth and capitalism and competition is favorable and does promote higher living standards, but if not controlled by the wise, brings about chaos. and the further along we go, the biger these crashes become. yes the us economy is a big sucker and can afford to have a debt of over 10 trillion dollars. but what are we doing today to avoid further crashes,giving out bonuses to those who put us in the mess in the first place,,, lowering interest rated to 0 to creat god know what sort of buble again. yes i being sinical, but the way things are going leave me no choice. if technology is ure stronguest point, them put everything u have into developing it and stop looking for the easy way to make money just because people beleive in you. we ve known about the buble phenomenon for centeries now and home prices were never going to keep rising for ever. technicaly they should drop because of inovations in construction/lowering cost of construction/ lower price of homes.
عبد الرحمن Posted 12 days ago
"Those who swallow down usury cannot arise except as one whom Shaitan has prostrated by (his) touch does rise. That is because they say, trading is only like usury; and Allah has allowed trading and forbidden usury. To whomsoever then the admonition has come from his Lord, then he desists, he shall have what has already passed, and his affair is in the hands of Allah; and whoever returns (to it)-- these are the inmates of the fire; they shall abide in it." (Al Baqara: 275).
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