Reform in Morocco: caught between terror and the king



Despite being one of the poorest Arab countries, the kingdom of Morocco has been spared the widespread protests seen elsewhere in North Africa and the Middle East.

Just last week, however, the regime suffered the strongest reminder that serious reforms are not a luxury, but a necessity. The Marrakesh bombing has been the deadliest in a series of violent incidents that have occurred on a yearly basis since the Casablanca bombings of 2003, when 45 people died in an attack that involved 12 suicide bombers. The attacks that killed 16 and injured 21 others on the Jamma El Fna in Marrakech targeted Morocco's core industry, tourism, and with it the foreign tourists who have visited the country by the millions over the last decade.

This newest attack reveals some of the details of the Moroccan situation that are difficult for Arab neighbours to the east and European neighbours across the Strait of Gibraltar to understand.

Morocco's traditional monarchy is based on the centuries-old idea that the monarch is the "Commander of the Faithful" - Amir Al Mu'minin - of Morocco's religious community. Effectively, this means that contesting the supreme role of the king is sacrilege. Most Moroccans, especially in rural areas, have rallied in support of the king on many difficult occasions since Morocco gained independence from French colonial rule in 1956. The bond between Moroccans and their ruler is not based solely on fear, as has been the case in some other states in the Middle East. Rather, it is profoundly religious.

The king's religious role has significantly reduced the scope of protest action. It is inconceivable to hear public calls for the king's removal, and even privately, it has been an idea limited to a handful of intellectuals and political activists. This is true in spite of two attempted military coups during the early 1970s.

Consequently, opposition to the regime and calls for reforms have limited themselves to calls for greater public accountability, greater participation of political parties in the national government, and for increasing the scope and protection of human rights.

Since the early 1990s and especially under King Mohamed VI, who has ruled since 1999, the regime has responded positively to such demands and has even taken the initiative, while insisting on an implicit bargain in which the opposition would refrain from asking for reforms that might touch upon the supreme position of the king.

For example, the current 1996 constitution allows the king to appoint the prime minister without consideration of electoral outcomes, and to appoint all senior positions from the minister of justice, and the minister of interior, to high-ranking military officers. He is the supreme commander of the armed forces, and the royal office is the primary initiator of most, if not all, pieces of legislation.

From a position of strength, the king was able to grant substantial political freedoms. These included a multi-party system, a guarantee of free and fair elections for almost 20 years now, complete with supervision by international observer groups, and in 2004 the establishment of a public truth and reconciliation commission. Here, hundreds of victims of human rights abuses were able to talk on national TV about the tortures they suffered under King Hassan II, who ruled until 1999.

However, this relative freedom also pushed many parties and citizens to call for a Spanish-like transition from authoritarian rule to constitutional democracy, a demand that the king and the royal advisers, called makhzen, have tried to quell. When mass protests brought down Hosni Mubarak and Zine el Abidine Ben Ali, timid protests inside Morocco repeated the long-standing demand of a constitutional democracy in a movement called 20 February. In response, the monarch caught his adversaries by surprise by announcing a constitutional reform that would, as in the 1990s and before, be approved by referendum.

Unlike Tunisia (but similar to Egypt), there was no constitutional assembly that was charged with instituting reform, but a commission hand-picked by the monarch himself. The 20 February Movement continued its protests, which accelerated after one rally was violently dispersed in Casablanca on March 13. Again in response to this dissatisfaction, the monarch began a heightened process of political consultation. Political parties - all more royalist than even the king himself - were requested to submit their proposals for reform, as were some activists of the 20 February Movement in an attempt to co-opt them into the political space. The pro-reform weekly newspaper TelQuel wrote on April 22 quite accurately that "the revolution is the king".

In this situation, the effects of the Marrakech bombing are likely to be disastrous for any substantial constitutional reform. Throughout its history, and particularly since the Casablanca attacks, the Moroccan kingdom has always been able to portray itself as the guarantor of stability. If pro-constitutional reform activists were initially confident in calling for substantial changes following the Tunisian or Egyptian examples, their constituency may now be a lot smaller than it was before.

An emphasis on economic reforms, such as an increase in the minimum wage or more subsidies, will also become more prominent in an effort to deflate the economic causes of violence and terror. Reformers will also look to neighbouring Tunisia, where in spite of the revolution, unemployment continues to cause young graduates no shortage of despair. This will ultimately limit the role played by the Tunisian model, which has otherwise served to inspire waves of enthusiasm since January.

James N Sater is an associate professor at the department of international studies at the American University of Sharjah

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For information on Crater Lake National Park, visit www.nps.gov/crla/index.htm . Because of the altitude, large parts of the park are closed in winter due to snow. While the park’s summer season is May 22-October 31, typically, the full loop of the Rim Drive is only possible from late July until the end of October. Entry costs $25 per car for a day. For accommodation, see www.travelcraterlake.com. For information on Umpqua Hot Springs, see www.fs.usda.gov and https://soakoregon.com/umpqua-hot-springs/. For Bend, see https://www.visitbend.com/.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia