Foreign Direct Investment and Regional Development in Morocco: The Current Situation and the Need of a Development Policy

Attracting foreign direct investment (FDI) is clearly on top of the agendas of most countries. All countries find it more difficult to stay competitive without FDI, which sustains growth: financial capital, management skills, technology, access to export markets, and therefore enhance country's competitiveness. That is nationally, but what can we say about regional policies aiming to promote local development through FDI flows? Although Morocco has 16 regions, it is in practice divided into "two Moroccos": The Casablanca-Tangier axis or ‘‘Rich Morocco'' (North-West) and the marginalized territories or ‘‘Poor Morocco'' (South / East / Middle). As would be expected, most of the FDI inflows are located in the Casablanca-Tangier axis, which receives more than 2/3 of all assets of foreign companies. Inland provinces suffer from a lack of FDI because of the difficulties related to absence of appropriate infrastructures and qualified human resources. In addition, as labor has become gradually more mobile, skilled labor has shifted from these areas to the more prosperous zones around Casablanca. This study aims to understand why some Moroccan regions are preferred and more attractive for FDI when others, neglected, lack the opportunity of development through FDI flows. After a detailed overview of the current situation of FDI in Morocco and trends behind their location choice, this thesis will discuss the role of FDI in regional development emphasizing the need of a balanced and oriented regional development policy. It will also attempt to draw some recommendations that may be relevant to Morocco and other countries facing similar challenges.