Economic Impact

Israeli business leaders expect surge in trade with Morocco

March 31, 2022

By Danny Zaken

Morocco hopes to replicate, and even exceed, Israel-UAE business ties.
The Abraham Accords has led to growth in economic and business ties between Israel and the United Arab Emirates (UAE). Now Morocco wants in on that, too. Two large delegations from Morocco arrived in Israel over the last few weeks. These included several dozen heads of major companies, businessmen, high-tech entrepreneurs and investors. At the same time, an Israeli delegation from the Israel Export Institute, the Chamber of Commerce and the Israel Industrialists Union set off for Casablanca March 29, for a four-day visit.

One of the two Moroccan delegations — the General Confederation of Businesses of Morocco — came to Israel March 13 for a special three-day event. At this conference of business leaders, the two countries signed an agreement to improve economic cooperation between Israel and Moroccan companies, which included the expansion of business infrastructures between the two countries.

General Manager of Morocco’s Ministry of Industry and Trade Abdelouahed Rahal told Al-Monitor that his country has free trade agreements with dozens of countries, representing 2 million consumers. He said that it is in talks to sign a similar free trade agreement with Israel.

Chakib Alj, president of the General Confederation of Moroccan Industries (CGEM), told Al-Monitor that after arriving in Israel he realized that there is much more potential than he previously imagined. As expected, the main areas of cooperation will be agriculture, with an emphasis on agriculture in arid desert regions, of which Morocco has many, the controlled use of water, grey water usage and desalination. When it comes to grey water, he noted that Morocco only reuses some 20% of its sewage waters, but that it wants to learn how to raise that to Israeli levels. “We need water especially, and the availability of water at these levels would make it possible for us to exploit our agricultural lands in desert regions,” he said.

Another important point raised by Alj was that Morocco serves as a bridge to Africa. Its banks have branches in 22 African nations, and it has extensive trade throughout the continent. In fact, Morocco helped Israel obtain observer status at the African Union, despite fierce opposition from Algeria and other African states.

As for technology, startups and innovation, he said that Israel is a trailblazer. Morocco would like to imitate this success and learn how to develop and implement its ideas. Upon visiting startup nation Israel, it was agreed to hold a conference for investors and high-tech companies in Casablanca this May to advance this venue of cooperation.

Perhaps the most interesting point, however, revolved around the shortage of high-quality manpower in Israel’s high-tech industry. Alj noted that Morocco has an abundance of graduates in engineering from Moroccan universities and some even from European universities, especially France. The problem is that the local industry is still too small. On the other hand, the option of employing them by Israeli companies seems like an ideal solution for both parties. He noted that Israel already uses programmers and engineers from other countries like Ukraine and India, and then asked, “Why not Morocco?" He added, "The world is changing and moving ahead. Morocco is boarding that train. Cooperation with Israel will help with that.”

Also related to manpower, Morocco would like to join the list of nations that supply Israel with guest workers, and in a number of fields at that. The main focus would be construction and infrastructures, but there are also other fields, some of them new, including professionals in older industries like metallurgy and welding, where there are plenty of available jobs. Israeli salaries in these professions (approximately $3,000 per month) are several times higher than the average salaries for this work in Morocco.

According to Israel’s Central Bureau of Statistics, trade between Israel and Morocco jumped by 84% in the last year, but it still comes to just $42 million. Exports to Morocco grew by 147% in 2021, coming to $31 million. It centered mainly on aircraft and freight equipment (about 61%), chemicals (15%), and plastic and rubber products (14%). The Israel Export Institute estimates that potential exports to Morocco could be $250 million per year, not including defense exports.

The same source said imports from Morocco last year were valued at $11 million, an increase of 10% compared to 2020. The main import items were clothing and food. Nevertheless, the figure is apparently higher, since some of the goods imported from Morocco come by way of a third country. As such, there would be far more significant growth, when compared to 2020.

Alj estimates that trade between the two countries could be significantly increased within five years, to reach as high as a quarter of a billion dollars. CGEM, an umbrella organization representing 90,000 businesses before the public authorities, is considered an economic powerhouse in Morocco. Alj is a key figure in the close relationship between Morocco’s business sector and the authorities. He ended his interview by pointing out that there was a special warmth in the relationship between the two countries, which he attributed, among other things, to the large number of Israelis of Moroccan origin, and especially, King Hasan II and his heir King Mohamed VI, who have maintained ties with Israel.

Ron Tomer, president of the Manufacturers Association, visiting Morocco this week with the delegation, told Al-Monitor that unlike the UAE, the relationship with Morocco has been developing more quickly, with fewer obstacles resulting from cultural differences. The Israeli and Moroccan peoples are much more alike. He believes that Morocco can help Israel find construction materials such as cement and iron, and serve as an alternative to Turkey that imports these materials now. Then there is the diplomatic relationship. “If this relationship works and progresses, it will be a shining example to the other nations in the region, particularly in the fields of water and agriculture. It may even open the door for other countries such as Tunisia and Mauretania to join the Abraham Accords,” he noted.

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