Why Are So Many Moroccans Immigrating to Spain?: A Brief Look at the Moroccan Economy

Last week, the Spanish government was put on high alert because thousands of Moroccans are looking to immigrate to Spain. I was perplexed at this phenomenon because in spite of being one of the top twenty economies in the world, Spain's economy isn't doing all that great, especially when one considers that Spain's current unemployment rate is 26 percent. If Spain's labor market isn't flattering, what is attracting Moroccans to moving to Spain?

The International Monetary Fund (IMF) recently published a report on the Moroccan economy that can provide further insight to that question. A part of me does not understand how things would have gotten bad enough where there would be a sizable immigration. As of last October, the new government coalition was established, which meant less deadlock and more enactment of laws. There is also a decline of the federal deficit, a twenty percent growth in the agriculture sector, there was GDP growth by four percent, and inflation was low. Morocco was also able to weather the volatility of the Arab Spring. That sounds like progress and resilience to me. So what's missing from the picture?

For one, taxation in Morocco is high, especially in terms of percent of GDP. Taxation has been 24 percent of the GDP for the past three years, which is a regional high. What's more is that there is a narrow tax base, which makes it more difficult for proprietors to make profit and expand their business. It's also more difficult to improve on business practices when lines of credit are constrained as much as they are in Morocco. These factors are compounded by the fact that doing business in Morocco is tough. In spite of the noticable strides Morocco has made in the World Bank's Doing Business Index in the past few years, it is still difficult to maintain protection of property and investment in Morocco. All of these negative facets of Morocco's economy are reflected in Morocco's unemployment rate. Although Morocco's unemployment rate is lower than that of Spain, it has been stagnant for the past few years. As is brought up both in the IMF report (p. 11) and Freedom House, the fact that the Moroccan economy reacts to exogenous shocks caused by European markets shows market volatility in Morocco. Even with the improvements in the Moroccan economy and stagnation of the Spanish economy, Spain's perceived grandeur and close geographical proximity make it a prime choice for those looking to immigrate.