Index of economic freedom, Morocco remains in the soft underbelly of the Country Rankings

oo e1615046938824 730x410 1

Morocco’s index of economic freedom is 63.3 which places its economy in 81st place among those of the freest in the 2021 index. Its overall score remains unchanged, with a drop in freedom of trade offset by improvements in monetary freedom and other indices to its advantage. Morocco is ranked 9th out of 14 countries in the Middle East and North Africa (MENA) region.

Its overall index is higher than regional and world averages and places it in the soft (moderate) belly of the “Index of Economic Freedom” or the index of economic freedom, an indicator based on a set of ten economic criteria, created by the Heritage Foundation and The Wall Street Journal. Its stated objective is to measure economic freedom in the various countries of the world. However, although the Moroccan economy has remained moderately free this year, three areas of the Index in particular are holding it back. The first is attributed to the integrity of the government and which is criticized for the too soft fight against corruption. The second is to strengthen the judicial system to make it more reliable and transparent, which according to the Heritage Foundation would increase the effectiveness of the fight against official misdeeds. Finally, it is recommended that the rigidities in the labor market be remedied, which would improve productivity.

While praising the longevity of the Alaouite Dynasty (17th century) and the Constitutional Monarchy with an elected parliament, Heritage Foundation and the Wall Street declare that Morocco is a key Western ally in the fight against Islamist terrorism. The document also states that the economy is expected to contract by 7.0% for the coming year and that measures were taken after 2011 to increase the power and independence of the Head of Government (currently Saad Dine El Otmani ) and provide greater civil liberties. King Mohammed VI remains the one to cap it all, a key stabilizing influence, says Heritage Foundation.

In addition to a large tourism industry and a growing manufacturing sector, the aviation industry has attracted foreign investment and is currently the fastest growing industry in terms of employment. Only about 30% of land is registered in the formal system, and almost all of this is in urban areas. The tribes collectively own more than a third of the land in Morocco.

The top personal income tax rate is 38% and the top corporate tax rate is 31%. The other taxes include a value added tax. The overall tax burden is equivalent to 27.6% of total domestic income. Public spending has represented 30% of total output (GDP) over the past three years, and budget deficits have averaged 3.8% of GDP. The public debt is equivalent to 65.8% of the GDP.

The online building permit processing platform has been improved and it is now possible to request and obtain certificates of conformity online. Morocco has also made it easier to obtain electricity. Labor regulations are rigid. The government subsidizes the prices of butane gas, sugar and flour.

Morocco has eight preferential trade agreements in force. The trade-weighted average tariff rate is 9.7% and 44 non-tariff measures are in force. Foreign and domestic investors are generally treated the same under the law. The competitive financial industry continues to grow and offers a range of financing options. The stock exchange does not restrict foreign participation. In 2020, measures were taken to increase the liquidity of the banking system.

In the top 5 of the Country Rankings we find Singapore (89.7), New Zealand (83.9), Australia (82.4), Switzerland (81.9) and Ireland ( 81.4). The UAE is the first nation in the MENA region and it ranks 14th (76.9), Israel comes next 26th (73.8) and Qatar 31st (72). The United States are 20th (74.8), Japan 23rd and Germany 29th (72.5), Tunisia 119th (56.6), Mauritania 128th (56.1) and Algeria 162nd (49 , 7).