Donor Strategies as regards of Development in Morocco
Internship report
By
El Alaoui Faris Meryem
Under the Supervision of
Dr Fouzi Mourji
Faculté des Sciences Juridiques, Economiques et Sociales
Université Hassan IICasablanca
In
Domestic and International Studies
Economic Consulting Company
Last version on August 22nd, 2003
Contents:
Introduction…………………………………………………………………………………..2
Chapter I: Development disparities and international cooperation
Section I: Developoment, underdevelopment and sustainable development…………………3
Development and underdevelopment………………………………………………………....3
Development and economic growth…………………………………………………………..4
Sustainable Development……………………………………………………………………..5
Section II: International Cooperation for Development……………………………………...7
The Types of International Cooperation for Development…………………………………...7
The Modalities of International Cooperation for Development……………………………...8
Chapter II: The Case of Morocco……………………………………………...... 9
Section I: Development situation of Morocco………………………………………………..9
Economic situation…………………………………………………………………………….9
Poverty and social inequities………………………………………………………………... 10
Human Development in Morocco……………………………………………………………11
Section II: Donors Strategies as regards of development in Morocco...... …...... 12
The strategies of implementation of cooperation programs...... 13
A Summary of Activities in the domains of support to governance, economic development of women, and the fight against poverty………………………………………………………...16
Chapter III: A particular Development Program in Morocco: The MicroStart Program by the UNDP…………………………………………………………………………………18
Section I: Micro-Finance in Morocco...... 18
Section II:UNDP’s MicroStart Program...... 18
Evolution of MicroStart in Morocco...... 18
The legal status of micro-credit institutions ………………………………………………….20
The Implementation of MicroStart Morocco…………………………………………………20
Impact of MicroStart on the Micro-credit institutions………………………………………..21
An Assessment of the Positive Outcomes of Micro-credits in Morocco: The case of “Zakoura Micro-crédit”...... 22
Interrogation: Do Micro-Credit Institutions reach the poorest?...... 23
Conclusion...... 25
Appendix I: Donors Information Sheets…………………………………………………...26
The United Nations Program for Development in Morocco………………………………… 26
Office of Italian Cooperation for Development in Morocco…………………………………29
The French Agency for Development Group in Morocco……………………………………31
The World Bank in Morocco…………………………………………………………………33
The Japanese International Cooperation Agency……………………………………………36
The European Union’s Cooperation Delegation in Morocco………………………...... 38
The United Nations Funds for the Development of Women (UNIFEM)……………………40
Appendix II: Internship progress………………………………………………………… 42
References…………………………………………………………………………………...43
Introduction
This study is the result of a two months internship in Domestic and International Studies, a company for economic studies specialized in micro-finance. As I lack economic background to work on a purely economic project, I have been assigned to study donors’ strategies in Morocco. Working on this subject was very interesting as it introduced me to the domains of international cooperation for development and allowed me to meet a number of people working in this field.
The questions that I try to answer in this report are:
a)What are the principal domains of intervention of donors supporting development in Morocco?
b)What implementation strategies do these donors follow?
To conduct this study, I have contacted members of the following donor organizations: the UNDP[1], the French Agency for Development, the Japanese Embassy (for information on the JICA[2]), the Italian Office for International Cooperation, the Delegation of the European Union for International Cooperation, The World Bank, and the UNIFEM[3].
Some of them could afford to answer my questions; others gave me access to their documentation. I have summarized the information collected during the interviews and from the documentation available at DIS into “Donor Sheets”[4]. Preparing these sheets allowed me to see the necessary elements to answer the questions cited earlier.
The first chapter of the report discusses development disparities and international cooperation. It is based on a rapid survey of literature linked to this topic. The first section of this chapter reviews some definitions and concepts of development and the second section presents the types of international cooperation for development.
The second chapter considers the case of Morocco. Its first section briefly presents the development situation in our country, acting as an introduction to the second section, which is dedicated to the donor strategies in Morocco.
The third chapter studies a particular program of international cooperation in Morocco: The MicroStart program implemented by the UNDP. This program has succeeded in bringing effective technical assistance to five Moroccan micro-credit institutions.
Appendix I gathers the Donors Information Sheets, which are an integral part of the work although put in an appendix.
The progress of the internship is reviewed in Appendix II.
CHAPTER I: Development Disparities and International Cooperation
Section I: Development, Underdevelopment and Sustainable Development
The Developing World:
The term developing world was adopted by the United Nations in a view to stop using the term under-developed countries, which has a negative connotation.
Another term is the “Third World” which originally designated the “non-aligned countries”, those belonging neither to the “First World” being the Western Capitalistic Countries nor to the “Second World” or the Eastern Communist States.
The developing world encloses three quarters of the world. Africa, except South Africa, Asia except Japan, Middle East, except Israel, America except the United States and Canada and Oceania except Australia and New Zealand are all part of it. (Friboulet, 2002. Section: Développement et sous développement des Tiers Mondes)
Putting such different countries with such different states of development in one category does not provide a realistic appreciation of what the “developing” world is. In fact, some of the countries present in this category may seem highly developed compared to others.
This is why a better categorization was provided by the World Bank the per capita GDP of 1995. The Middle or Intermediate Countries of which are North African Countries; the Middle East countries with the exception of the oil exporting emirates; Angola, Senegal, Ivory Coast, Gabon, Congo, Cameron in Sub-Saharan Africa; Japan, Malaysia, Thailand and South Korea in Asia; Portugal, Greece and Central Europe and almost the whole South of America. The 1995 per capita GDP of intermediate countries was between US$ 800 and US$ 4,000.
The Low Income Countries enclose much of Sub-Saharan Africa and Asia. In South America, only Honduras and Haiti figure in this category. The 1995 per capita GDP of Low Income Countries was below US$ 800. (Friboulet, 2002. Section: Développement et sous développement des Tiers Mondes)
However the differences in GDP and the distance covered on the road to development, developing countries share a number of characteristics.
A developing country’s economy is usually based on agriculture, which is not flourishing because of the lack of technology that does not allow high production. An agricultural economy with low technological advance implies dependency towards climatic conditions, which makes it difficult to act on the economic growth of the country.
Besides an agricultural economy, developing countries’ governance is dominated by traditional and religious values. Moreover, corrupt governments are not rare. Especially in countries which boundaries were drawn by the colonizing powers of the past, not considering the ethnic or the religious compositions of the people. In some cases, when most of the population is rural and still tribal, conflicts are not rare, which worsens a situation which is already sad.
All countries are governed by an elite, but an elite which considers only its material interest and forgets that the duties of the State is to provide stability, goods and services to its people is useless. For the state to accomplish its duties, an implication of the people is important, and for the people to participate in governing and therefore, developing its country, it needs to be sufficiently educated and open-minded. The problem in under-developed societies is that ignorance is widely present. Very low levels of alphabetisation and literacy prevents from changing the mentalities and making people able to look for themselves.
The health situation in developing countries is disastrous. As contraception is seldom used, there are too many children per family. The lack of access to sanitary conditions and medical help allows the diffusion of diseases and children and mother deaths, especially during accouchement.
The intermediate countries have evolved from the situation described earlier by managing to enhance their industrial and trade capacities, but much effort is still to be made to attain a high level of development. Another element helping development is when history spares a country from suffering from severe conflict situations.
Development and economic growth:
Development was assimilated with economic growth and directly related to the wealth of countries. Theories of economic growth and considerations of economic backwardness characterized the publications of the 1950’s. The idea was that the difference between developed countries and underdeveloped countries (Africa, Latin America and Asia) resides in the incapacity of the latters to product a high enough revenue. (Friboulet, 2002. Section I: Le développement, définition et finalité)
In fact, the word development as we understand it now was seldom used before the Second World War. It is only after it that economists gave interest to the gap between the industrialized countries and the underdeveloped countries.
Anglo-Saxon definitions of the end of the fifties helped the distinction between economic growth and development. Higgins, in his “Economic Development” (1st ed., 1959) wrote:
Development is a significant increase of the total income and mean per capita income, largely diffused amongst occupational and income groups[5], that lasts at least two generations and becomes cumulative.
(Translated from: Guillaumont, 1985. p. 39)
Higgins’ definition points to the long lasting and cumulative characteristics of development, even though it keeps development bond to economic growth. It also highlights the equal diffusion of the revenue. Development is then linked to an equal distribution of wealth, implying a reduction of disparities. A total reduction of disparities seems to be hardly reachable since even in the most developed countries, people living in high levels of poverty represent a relatively important percentage of the population.
The notion of development was more detailed by François Perroux (1903-1987) who stated that development is the combination of mental and social changes that make a population able to increase “cumulatively and durably” its global product (Guillaumont, 1985; p.42). He believed that development is followed by economic progress.
This definition states that economic growth is a result of development, not the essence of it. It is impossible without a whole structural and institutional change, with the constitution of “coherent financial market and system” (Friboulet, 2002 Section: Le Développement, Définition et Finalité) and the education of the people as well as rising their consciousness of their rights and duties towards their country. Of course, these changes are impossible before satisfying the basic human needs: nutrition and health in the physical aspect; education, social and political participation in the psychological aspect. The satisfaction of these needs implies, however, without a “decent” economic growth.
Development is therefore a sort of vicious circle of which economic growth is an important link, which explains the indebtedness of developing countries and their low capacity of going out from their underdevelopment situations.
Sustainable Development:
As stated earlier, the durability of development is important for it to be significant. In fact, a development that does not permit future generations to benefit from it is not significant. The awareness of the issue of durability or sustainability of development started to be raised in the 1960’s with the emergence of environmental movements in Europe and America.
The concept of “sustainable development” appeared in the 80’s and became known during the World Commission for Environment and Development (also called the Brundtland[6] Commission) in 1986. This commission was established by the United Nations to consider environmental degradations issues and to make recommendations regarding the long-term conservation of human environment.
The United Nations defines sustainable development as being “a development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. (UNDSD website)
A consensus on the essential aspects of sustainable development was reached in 1995 during the World Summit for Social Development. These essential components are: environment, economy and social equity.
The term “sustainable development” became popular after the World Summit on Sustainable Development that took place in Johannesburg between August the 26th and September the 4th 2002 (Le Courrier ACP-UE n.194; p7). This summit allowed the discussion of sustainable development matters and the achievement of some notable agreements.
The environmental situation of our planet is very critical. The carbonic gases emitted everyday increase the risks of greenhouse effects, petroleum, industrial pollution and intensive fishing kills the marine fauna and flora, biodiversity is constantly reduced and the genetic modification of plants may lead to unpredictable mutations.
This justifies the emphasis of the participating countries in the Summit of Johannesburg on environmental issues. Numerous decisions for improving the ecological situation of the planet were agreed upon. Amongst these, the agreement to restore the fish stock by 2015 was signed. This agreement is very important as the diminution of marine resources presents a danger for the alimentation of millions of people.
The participating countries also agreed on the decision to decrease the number of species in danger by 2010 and to minimize the effects of the production and use of chemicals by 2020(Le Courrier ACP-UE n.194; p7).
As far as the use of renewable energy, no agreement was reached as the oil producing countries as well as the US, Canada, Japan and China refused the proposition of the EU to increase the part of this far less pollutant energy by 15% (Le Courrier ACP-UE n.194; p7).
Another important point reached by the Johannesburg Summit is the official acceptance of Canada, China and Russia of the Protocol of Kyoto[7], which has allowed starting its execution, as the minimum number of joining countries has been reached (Le Courrier ACP-UE n.194; p7).
Defining international ecological strategies and applying them urgently would be the only solution to save the planet from the numerous risks that threaten it. Unfortunately, the various interests of industry holdings and petroleum companies block the evolution of such programs. The price for industrial and scientific progress is the diminution of the natural resources and the increase of threats on the life of living species, including humans.
As far as economy is concerned, the Summit of Johannesburg has also concentrated its efforts on economic problems such as the reduction of poverty in the World, the increase of the access to basic vital goods and the increasing of Public aid to Development.
Regarding these issues, the engagement to reduce the number of persons not having access to drinking water nor to sanitary equipment by half in 2015 and the invitation to the use of 0.7% of the GDP has been accepted by the participating countries (Le Courrier ACP-UE n.194; p7).
Of course, the domains of governance and gender equality were also mentioned, encouragements to country strategies in these fields were expressed and the right of women to health services “with respect to their cultural and religious values” (Ibid.) was once again stressed.
As the international relations (especially the commercial ones) are intensified and the gaps in development between the countries become wider, the necessity to make efforts to lower the disparities between the countries becomes obvious. In this regard, the international organizations target supporting and enhancing transfers to help in the development of poor countries. It is the multilateral cooperation. Similarly, historical and geographical relations between the countries cause the creation of a bilateral form of cooperation.
The following section treats of these forms of cooperation and of the modalities that international cooperation operates through.
Section II: International Cooperation for development
In the world of globalization and interdependence in which we live, developing countries cannot attain their development goals without the cooperation of more developed countries.
This international cooperation takes different forms and is implemented by different means.
The Types of International Cooperation:
There are three types of international cooperation for development: Bilateral Cooperation, Multilateral Cooperation, and Multi Bilateral cooperation.
The Bilateral Cooperation: Bilateral cooperation is the type of development cooperation in which one developed country helps one developing country. All Ministries of Foreign Affairs have an International Cooperation Office and funds dedicated to the assistance to receiving countries. These funds are either granted as non-reimbursable financial contributions or as low interest loans to the receiving country. Another option is the implication of Non Governmental Organizations from the Donator Country. This type of cooperation comes after establishing a development plan and the precisions about the domains in which the donator country will participate with the receiving country. The funds are given to the NGOs after a study of their development programs and granting that these funds will effectively be used to achieve these programs. The NGOs choose whether to contact a local NGO to work in collaboration with or to execute the project by themselves and with the assistance of the local government.
Another type of bilateral cooperation is the establishment in developing countries of delegations offices specialized in development. These delegations, being “in the field”, are better placed to know where the funding should go and to evaluate and assist the execution of the development programs.
The Multilateral Cooperation: Bilateral cooperation demands the implication of the Donor Country in the establishment of development plans and a close follow up of the procedures of execution of the development programs. Multilateral Cooperation is the solution for those who prefer to contribute financially and let international organizations take care of the troubling work of discussing the development programs with the authorities and following their execution steps. It is an indirect participation to development where the Donor countries either subscribe or contribute to the funding of International Organizations like many of the United Nations Organisms (UNDP, UNFP...), the World Bank, The African Bank for Development etc…
The international organizations proceed to the establishment of the programs and then seek the international community for gathering funds.
The Multi Bilateral Cooperation:This paradoxical appellation designates the type of cooperation that lays between the Bilateral and Multilateral Cooperation. A donor country may want to get more implicated in the execution of development programs. It would provide the funding and propose an NGO or a governmental execution team to participate to the execution by an international organization.