Morocco textile industry adapting to free trade

Morocco textile industry adapting to free trade

Sun Apr 23, 2006

By Tom Pfeiffer

RABAT (Reuters) - Morocco hopes to create as many textile industry jobs as it loses over a two-year period, the kingdom’s trade minister said, as firms adapt to the fall of world trade barriers by developing new niches and technologies.

As cheap Asian manufacturers muscle into its vital European markets, Morocco is trying to nurture industries that have a competitive advantage in being close to Europe and that offer the greatest profit potential.

To try to turn the threat of globalisation into an opportunity, it has sealed free-trade deals with the United States and Turkey and is encouraging inward investment with reforms of the financial sector, labour market and taxation.

"Our aim over two years is that between the creation and disappearance (of textile industry jobs), there is a balance," Trade Minister Salaheddine Mezouar told Reuters in an interview.

Textile makers, which account for up to 40 percent of Morocco’s exports, are shifting from low-value-added product lines and adding technology so they can process an order and fly the finished clothing to European buyers in a matter of days.

To reduce the country’s high transport costs, a massive port expansion in the northern city of Tangier is due for completion in mid-2007. Industrial hubs nearby will support key export sectors including textiles, auto parts and electronics.

"With the investment we have put into Tanger-Med, we will multiply port traffic by 15 times, we will be six days from the United States, and we will reduce transport costs by 50 percent," Mezouar said.

The changes should help cut Morocco’s reliance on agriculture, which employs more than 40 percent of the workforce and, despite heavy investment in irrigation projects, still suffers from severe droughts.

"We have fixed as a goal over 10 years to create something like 500,000 jobs in industry, knowing that the rhythm increases as our projects come to fruition," Mezouar said.

He said the aim was for industrial gross domestic product to account for 23 percent of total GDP by 2015, up from 16 percent currently, and for industry to contribute 1.6 percent of GDP growth every year.

Alongside textiles, phosphates and money sent home by its citizens living abroad, Morocco’s other key revenue earner is tourism.

The government aims to double the number of visitors to the country to 10 million by 2010 and is overseeing the construction of a chain of resorts on the Atlantic and Mediterranean coastlines and urban redevelopments.

The plan took a leap forward late last month, when two Dubai property firms agreed to a series of tourism investments worth a combined $9 billion. Mezouar said the deals were not a one-off event.

"Other projects (of a similar size) will follow in the coming months."

Mezouar was speaking after officials unveiled a plan for an industrial park near the administrative capital Rabat, bringing together firms and university research bodies to develop and market products using nanotechnology and biotechnology.

The project foresees an investment of 1.5 billion dirhams in its first phase, and the creation of up to 20,000 jobs by 2015.

source: Reuters