- A crippling drought that is affecting Morocco, Spain and Portugal is the main factor behind an economic recession beginning to get noted in Morocco. The government has already downscaled its growth forecast for this year, while experts warn the crisis could go on for several years. High oil prices and declining textile exports also take their toll.
Morocco and the Iberian Peninsula is currently hit by the region's worst drought in six decades. The semi-arid region had already been using more water than it produces, due to its tourism industry and general economic expansion. The current drought threatens both the agricultural sector and further economic expansion at large.
The Moroccan economy is gravest hit, given the population's dependence on agriculture. More than 40 percent of the population lives in rural areas and is directly or indirectly depending on the agricultural sector. The drought is expected to affect rural economies for years to come. Moroccan authorities therefore already have warned of an expected exodus from rural areas into the Kingdom's already crowded cities.
The government has already noted the negative impact of this drought on the national economy. Authorities now reduce the expected economic growth rate from 3.5 to 1.3 percent for 2005. Such a downscaling may even be repeated later this year, when the consequences of the drought become clearer.
The drought is however not the only reason for the registered economic recession in Morocco. The Kingdom - which entered the year optimistically due to a new free trade deal with the US - is also facing problems due to record oil prices, which are closing into US$ 60 a barrel. Experts foresee oil prices between US$ 50 and 65 for the next five years, which will increase production prices in the non-oil producing country.
At the same time, Morocco's most important industrial sector, the textile industry, is facing big problems since the world textile trade was liberalised in 1 January. Morocco's textile industry now pays the price for not having modernised sufficiently during the last decade. While competitors such as Tunisia have been able to increase exports, Morocco has noted a 16 percent decrease in its exports of textile products to the European Union (EU) so far this year.
The dilemma faced by Moroccan authorities is that the economic sector with the greatest growth potential - tourism - also is the sector most dependent on the country's scarce water resources. So far this year, Morocco has noted a 25 percent increase in ordered charter travels to the country. Tourism infrastructure is constantly being expanded, but the environmental costs may be great.
The environmental effect of the ongoing drought in any case already is visible to Moroccans and visitors. Only during the last weeks, some 1,200 hectares of forests have been destroyed by wild fires in the country. Officials at the Water and Forest Department today attributed the large growth in number of fires - double from last year - to the drought.
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