Morocco: World Bank inaugurates new country assistance strategy with Morocco
Morocco, Economics, 6/7/2001

The World Bank said the two loans to Morocco worth $ 97.5 million approved last week mark the start of a New Country Assistance aiming to guide the bank group's overall program in the country for the next three years, after it noted the significant progress made in the last decade in achieving macroeconomic stability and liberalizing the economy.

The international financial institution says in a statement the Bank's executive directors "emphasized the importance of the ongoing political opening, and commended the Government for the significant progress made in the past decade in achieving macroeconomic stability and liberalizing the economy. The directors also welcomed the Government's increasing focus on poverty reduction and rural development."

The WB said political opening has to be coupled with a strong growth-oriented economic program, anchoring the Moroccan economy more firmly on the dynamics of international trade, while ensuring medium-term fiscal stability.

The newly-inaugurated Country Assistance Strategy proposes a "base case" lending program that would remain at about the same level as during the last five years, at about $250 million per year, which would be divided into a core component focusing on poverty, unemployment and human development, and a sector reform support component.

The core poverty component would comprise about three operations, totaling $150 million, per year. These operations would support community-based rural development, education and literacy programs, employment generation and good public governance. The sector reform program would seek to support priority reforms by the Government through analytical and advisory work. Contingent on fiscal and sector reform, it could also include up to one adjustment operation of US$100 million per year.

The strategy also envisions a 'high-case' scenario that would respond to the implementation by the government of a package of macroeconomic, structural and social reforms having the potential to accelerate economic growth and the pace of poverty reduction. Under such a scenario, WB's financial assistance could reach up to $450 million per year.

Under the new strategy for Morocco, the International Finance Corporation (IFC) will play a role in helping to improve the business climate, through efforts aimed at mobilizing financing for complex projects, providing innovative financial instruments, especially for small and medium-size enterprises, and supporting institution building in the financial sector.

The World Bank release adds that The Irrigation Based Community Development Program will serve as an entry point for the implementation of the Moroccan Government's new "2020 Rural Development Strategy" which calls for a more participatory, integrated approach to rural development. Under the leadership of the Ministry of Agriculture, Rural Development, and Water and Forests, the Program would seek to improve the incomes and quality of life of rural communities in 15 provinces over a 13-year period (2001-13), primarily through demand-driven, coordinated investments in small and medium scale irrigation and complementary community infrastructure, including rural roads, water supply/sanitation, electrification, health and education facilities.

This project is the first "adaptable program loan" approved for Morocco, encompassing three phases over a 13 year period, for an overall program cost of US$242.4 million with Bank financing representing US$172.6 million. The first phase of the Bank loan approved last week by the Board is US$32.6 million. It is accompanied by counterpart financing from the Moroccan government of US$6.63 million and a US$3.2 million from the local communities.

The Information Infrastructure Sector Development Adjustment Loan, in which the World Bank contributed a US$65 million-worth loan aims to: support Morocco's telecommunication privatization and liberalization program, extend services and strengthen the regulatory environment of the telecommunications sector; assist in the formulation and implementation of a strategy for the use and development of information technologies; and formulate a national strategy for the postal sector, including the financial services provided through the postal network, which will serve as a basis for further specific reforms.

Previous Stories:
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