Public investments and private investments interactions impact on Business climate development in Morocco

Abstract

Kingdom. To remedy this, Morocco is called upon to integrate the junction between public and private investment in order to balance the intervention of the two types of investment in the development of the national economy. Official data show that public investment accounts for 60% of total investment in Morocco, while private investment accounts for only 40% of total investment. Faced with this observation, the New Development Model of Morocco has insisted on the need to raise the share of the private sector in the enrichment of national investment by deploying any initiative likely to encourage investments, small and large, in a dynamic motivated by state mechanisms of incentive to job creation. In this article, we seek through a narrative analysis of investment reforms to see to what extent public and private investments can be governed in such a way as to create complementary territorial arrangements that should bring together the State and economic operators. This will work to achieve a single objective, which is to promote the creation of a causal link between the two types of investment. To this end, the answer lies in the New Development Model, which places the role of the state in improving the quality of infrastructure and state facilities to make the business climate in Morocco even more attractive. This vision remains dependent on the participation of the private sector in the exploitation of mechanisms promoting a mutualization of the contributions of the two parts towards a territorial then national anchoring of the investment balance in Morocco. To do this, this contribution is based on the analysis of the contribution of the State and the private sector in the dynamics between public and private investments, and to detect the contributions and the limits of each component in the improvement of the business climate in Morocco. Thus, we will present the definition of the two types of investment through a review of the literature on these two concepts, and then dissect the relevance of reforms to develop private investment in Morocco, and the relationship between investment and business climate in Morocco. At the end of this analysis, recommendations will be proposed to highlight the priority actions likely to raise the contribution of the private sector in the generation of more added value thanks to an interactive dynamic between the two types of investments and an institutional setup based on the Public-Private Partnership.

Keywords: Investment, business climate, economic development

JEL Classification: P11.

Paper type: Theoretical Research