Can Investment in Renewable Energy and Privatization Save Moroccan Economy
The threats posed by the detrimental effects of global warming and the degradation of the ecological environment due to the intensive industrialization has increased the amount of greenhouse gases in the atmosphere, thus, prompting decision-makers to adopt groundbreaking measures towards a cleaner industry.
For Morocco, a country that has been facing waves of political and economic unrest during the last decade, a transition towards energy efficiency at this particular moment might not lead to the creation of labor intensive structures in the very short term. Yet, investing, in such a promising and growing sector may offer a glimpse of hope for the industrial sectors, as well as the labor market in the forthcoming years. Indeed, the implementation of a renewable energy strategy is liable to reduce dependency on imported energy.
The European Bank for Reconstruction and Development considers that the transition towards energy efficiency in Morocco cannot be achieved without supporting the domestic production of renewable energy, in addition to a substantial reform in the electricity sector, including the reorganization of the state owned ONE ( Office National d’ Electricité). The EBRD report recommends the implementation of energy sufficiency throughout municipal and public services in private and public buildings and across numerous industries through a transition towards privatization.
During the EBRD annual meeting held in London on the 18 and 19 May, Mr. Fathallah Sijilmasi Secretary General of the Union for the Mediterranean outlined a four-step plan to lay robust foundations for renewable energy production in the Maghreb, including Morocco. He stressed that the primary focus in the North African region is to put forward regional projects to find a remedy to the low level of regional integration among North African countries. He added that Morocco is negotiating with the EBRD a master plan about solar energy with the goal of producing 20 Giga Watt by 2020.
The master plan comprehends a number of key stages. The first step aims at formulating a legal framework for energy exports to Europe before setting the financial mechanism for buying and selling subsidies. The third step would be the implementation of adequate infrastructure in local as well as international markets. According to Mr. Sijilmasi, the overture to international markets in the Mediterranean Union will operate at three main corridors, namely Morocco and Spain, Tunisia and Italy, as well as Turkey and Greece. He went on to say that the industrial component remains pivotal in job creation.
As a matter of fact, the concept of energy efficiency still does not strike a chord with many industrialists in Morocco. Hence, the necessity to sensitize the public opinion over this news trend in energy management.
The EBRD financing for renewable energy has grown dramatically in recent years with a number of groundbreaking projects mainly in the exploitation of wind and hydropower. Now that the ERBD has inaugurated a new region of operation in many ways, it is faced with a new context full of new business prospects but also characterized by different legal tradition and cultures. The novelty of this business environment calls for a thorough examination of the main challenges facing the private sector in this region.
Nevertheless, the financing of the private sector by European financial institutions may lead to a massive privatization that would open the way to corruption and the resurgence of the same unhealthy environment- that stirred the uprising a year ago in Egypt and Tunisia- marked by corruption and inequality in wealth distribution.
Many economists remain skeptical about the new interest that European financial institutions are showing to the North African region. The same institutions were zealous to invest in the private sector in Eastern European countries in 1990s. The liberalization of public institutions in Eastern Europe had the reverse effect sought at the onset of this operation. Many workers lost their jobs as public institutions were privatized, not to mention the shrunk in public budget since the public revenues were severely reduced as the privatization extended to more public institutions.
Between what the EBRD advocates, namely the promotion of democracy and free market economy , the critical situation of Arab governments in the North African region and the threats than an uncontrolled privatization may present, many politicians in countries like Morocco and Tunisia seem to be more concerned about their immediate survival rather than about the far-reaching consequences of this European appetite in an unstable region.
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