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Marrakech Economic Over Dependency on Tourism
Posted on 10 Jul 2008 by Morocconewsline
<em style="color: rgb(82, 87, 93);">Built on a myth, Marrakech has for many years been the playground for the rich and famous in Morocco.<br><br></em>Marrakesh may have fallen victim to its own success. The tell-tale
signs are all pointing towards that direction. Inflation is at an all
time high, real estate prices have sky rocketed and overnight stays has
been decreasing over the past several months. The city’s
over-dependence on tourism is becoming a real threat to its economy.<br><br>The king’s speech at the 2001 tourism conference in Marrakech marked a
turning point in policy. The government presented Vision 2010 as
Morocco's national tourism strategy. The main objectives were to
attract five times as many visitors in 2010 as in 2002 and create
600.000 new jobs in hospitality and tourism sector. In 2002, Marrakech
benefited from a 200 millions dirham (27.4 Million USD) endowment
established by the King of Morocco. The red city became the jet-set
capital of Africa.<br><br>Building on its momentum, Marrakech has
capitalized on its competitors unfavorable environment. The surge in
terrorism activity in Egypt in 2002, the bird flue scare in Turkey and
terrorist threats against tourist sites from kurd separatists have all
benefited tourism in Morocco. <br><br>Over the next few years,
Marrakech would opt for tourism as a strategic development path.
Tourism became the red city largest industry. Thanks to its exotic
culture, its landscapes and proximity, a mere three hour flight from
any main European capital, Marrakesh has attracted over two million
tourists in 2007. <br><br>Huge investment from the Middle East remain
a very important aspect of the foreign involvement in Marrakech tourism
industry. After September 11, many Middle East investors faced with
rising difficulties when investing in Europe and the US turned to
Morocco as a friendly Islamic country with great investment potential.<br>The city has attracted more then 161 Billion MAD.<br><br><b><br>Don't put your eggs in the same basket..</b><br><br>From
an economic viewpoint the economic return of tourism in Marrakech is
undeniable, but there is a flip of the coin very few in the Moroccan
government want to look at. There is no economic activity without
external diseconomies.<br><br>The upswing of prices has been remarkable
in Marrakech. It has affected all sectors without expection according
to the Haut Commissariat au Plan (HCP). Marrakech is considered today
the most expensive city in Morocco. This label does not sit well with
both tourists and locals. <br><br>Local officials have been trying to
shed off this image. Abdellatif Kabbaj, “the myth of the expensive city
is false, categorically false”. This statement contradicts the HCP
number. The cost of living index during the first 5 months of 2008 are
higher than the national average by 2.7 points. It has reached 184.9.<br><br>A
few years ago, Marrakech was sold as a tourist destination where life
was simple and affordable. Between 2003 and 2007 the price of land
doubled, thanks to real estate speculators, the increase of the price
of raw materials and wealthy clients looking for state of the art
construction. A few weeks ago, a real estate agency was advertising in
the Financial Times a 1500 square meter house for 6.8 million dollars
in Marrakech. That same agency is also offering for sale a one thousand
square meter villa in the outskirts of St Tropez for 4.25 Millions
dollars. <br><br>This euphoria has hit all sectors of the local
economy. As tourist can afford to buy items at higher prices, retailers
have increased their prices of existing products and provide more
expensive goods. Local residents have had to pay for more expensive
goods. As retailers selling to tourist can afford to pay higher rents,
these costs are passed on to the local consumer as well. Local
consumers and tourists alike have been complaining about these price
increases, which are sometimes a higher than prices in Europe. These
inflationary tensions have spilled over into Morocco economy at large
and contributed to a rise in general inflation. In some instances the
locals had to scale down and the cut down on their quality of
accept a lower quality of life than they enjoyed without tourist.<br><br>This
Marrakech euphoria has spawned a policy of “business opportunism” that
will turn out to be detrimental in the long run. Some unscrupulous taxi
drivers, restaurants and small shops owners, have been charging
exorbitant prices.<br><br>But how can local officials prevent this
excessive pricing? They adhere to the theory that in a free market
economy there is little the government can do against these sort of
abuses. They have implemented regulations to deter taxi drivers and
restaurants from overcharging their clients. But the lack of
enforcement of these regulations makes them inefficient and
ineffective. It amounts to window dressing and fails to in its effort
to reassure the international public opinion.<br><br><b><br>Economic over-dependency </b><br><br>In
Marrakech there is not other major economic activities besides tourism.
There is no alternative. The choice is not whether to pick
“Manufacturing or Tourism” but rather “Tourism or unemployment”. <br><br>The
numbers speak for themselves. Between 2003 and 2007, investments in
Marrakech reached over 158 Billion Dirhams, with the tourism sector
claiming the lion share of 72%, 27% went to real estate and less than
1% went to commerce, agriculture, artisanat and services combined.
However, labor and land used for tourism have an opportunity cost local
official have chosen to overlook for years. The over-dependence on
tourism is a double-edged sword.<br><br>As fewer tourists hit the road
this holiday season, local officials in the tourism industry are
worried. The city of Marrakech has yet to start a long overdue
alternative economic development plan.<br><br><br>Karim Zouiyen<br>Morocco Newsline<br><br>

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