Japan Seeks New Trade and Business Relation with Morocco

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Scoop on Japan Economics

The Bank of Japan intervened in September to prop up the yen as it slumped to a 24-year low against the US dollar, a loss resulting from the erosion of the reserves and the impact of the imported inflation through the pricing of energy products.

Shrinking economy in Japan was a novelty like it was in Europe too.  Signs were showing not only of slow activities resulting from the disruptive supply chain bottlenecks and the Covid impact but more importantly from the change taking place in the international division of manual, robotic and logistic labor.

Bank of Japan’s Kuroda Shocks Markets by Raising the Benchmark Rate to 0.5% From 0.25%

The Japanese yen is up 3.42% against the U.S. dollar on Tuesday as the Bank of Japan surprised the world by deciding to allow the benchmark interest rate to rise to 0.5% from 0.25%. The Japanese central bank was one of the only banks worldwide to hold off on raising benchmark interest rates, as policymakers

The Bank of Japan waited for the European Storm, holding firm until the Fed and Ms. Lagarde decided to quit the position of waiting for the Russian Godot.

The first increase by the Fed responded to the financial plugging of the British economy but was confronted by the OPEC reducing oil production, the Russian to accept only rubble as payment and the Chinese to make payment only with Yuan for all the external transactions.  

The conglomeration of all these geo-financial moves pushed the dollar for the first time to reach higher than the Euro in the international market while it has also increase its vulnerability.

The shift from China to Southeast Asia and Vietnam, the disappearance of ISIS as buyer of weapons and seller of cheap, the Russia – Ukraine war and the arm race, the sanctions against African and Russia and China have also been the major factor in showing how western nations have not transformed the position of the Third world economies. Economies of the South remained anchored in their dependant position toward the external sources of capital with conditionality and the loss of their income given the loss of competitiveness and their inability to pay their external debt.  

Within the emerging and developing markets, they are more than 60% of the indebted countries are on the verge of defaulting first with Zambia, Sri Lanka and Ghana, Venezuela at the front line of complete default.

The recession is on the Western economies, it spreads beyond the surge of greater inflation coming from the energy and affecting commodities and food staples, the financial houses and “dough” makers started laying off shaking flour dust. In fact the flaws of the liberal distorted policies applied by the Monetary institutions in the Western societies have a great responsibility in the inflation and the insolvency of many third countries.

Even Japan had experimented such treatment when it was considered as the “Yellow Peril” by many news makers and analysists. During the period when the United States imposed to Japan, a reform of its banking and real estate market along the opening to trade, the buying and importing of rice, the devaluation of the yen and the installation of japanese car manufacturer to be located in proximity and inside of to the United State. Therefore, Japan took the role of echo room for the US economy since Reaganomics and the Chicago Boys.

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‘Now sustainable’

Morocco is tackling the climate crisis head-on by positioning itself to have one of the world’s most competitive low-carbon industries. Japanese organizations have shown significant cooperation and investment in the fields of wind and solar power. Morocco’s commitment to renewable energy spans more than a decade.

• 2009: National decision and first investments made toward developing renewable energy.
• 2016: Development of Noor Energy 1 solar power plant is launched.
• 2020: Renewable energy accounts for 37% of Morocco’s energy mix.
• 2021: Four gigawatts of installed capacity from renewable energy achieved.
• 2022: Taza wind farm, backed by Japanese investment, begins operations.
• 2025: Projects for green hydrogen to be commissioned.
• 2030: Target for electrical capacity from renewable sources to be set at 52%.

‘Now competitive’

Morocco has consistently ranked among the most attractive investment destinations in Africa and has played an important role as a regional trading hub for centuries. Today, it leads the way in terms of world-class infrastructure and digital connectivity across the African continent and offers a “best cost” value proposition.

• Access to 1 billion consumers through free trade agreements with almost 50 countries
• Distance from Europe: 15 km
• Average labor costs: US$327
• Tangier Med Port, the first transshipment platform in Africa, boasts 186 connections with 77 countries
• Airports: 18
• Industrial Zones: 100
• First “bullet train” in Africa

‘Now well-proven’

Morocco is the leading car manufacturer in Africa and has an automotive ecosystem of 250 companies. Its aerospace sector has 140 companies and an average yearly growth rate of 20%.

• Business-friendly environment
• Political stability
• Resilient economy
• Human capital
• Effective government incentives
• World-class “Special Economic Zones”
• End-to-end assistance and support from Morocco’s Investment & Export Development Agency (AMDIE)

‘Now agile’

Agility is part of Morocco’s DNA and key in a fast-changing world. Morocco is often described by foreign investors as agile, responsive and able to turn crisis into opportunity.

“We invite foreign investors and international buyers to explore the powerful investment and sourcing opportunities Morocco has to offer. We guarantee concrete solutions to the challenges facing the global value chain today and a strong commitment to the success of all investment projects in the country.”

— Youssef El Bari, General Manager of AMDIE

Learn more about Morocco: www.morocconow.com
A Japanese version of the ‘Morocco Now’ website is also available: www.morocconow.com/ja

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Basic Data

Diplomatic Relations:

• Established in 1956 with the recognition of Morocco’s independence
• 1961 Japanese Embassy opened in Morocco
• 1965 Moroccan Embassy opened in Japan

Bilateral Treaties and Agreement:

• 1960 Trading Arrangement
• 1985 Fisheries Agreement

Number of Residents:

• Number of Japanese Nationals residing in Morocco: 350 (October 2018)
• Number of Moroccan Nationals residing in Japan: 637 (June 2019)

Economic Relations

Trade with Japan:

• Imports from Japan : U.S.$ 259 million (2018) (automobiles, machinery)
• Exports to Japan : U.S.$ 150 million (2018) (seafood, phosphate rock)

Other Economic Relations:

• The Moroccan Embassy in Japan hosts the Morocco business seminars approximately every year in Tokyo as well as other local cities, in cooperation with JICA, JETRO, UNIDO and JCCME (Japan Cooperation Center for the Middle East).
• In addition, the Moroccan representative delegation led by the Minister of Energy, Mine Water and Environment had attended the 2nd Japan-Arab Economic Forums in December 2010 and appealed for cooperation with Japan regarding the promotion of using solar energy as a generation system.

Japan’s Economic Cooperation:

• Loans: 311.609 billion yen (List of Exchange of Notes)
• Grants: 37.111 billion yen (List of Exchange of Notes)
• Technical Cooperation: 39.369 billion yen
  • (note) Cumulative total as of March 2017

(a) Japan has provided support in the form of loan aid, grant aid and technical cooperation:

The focused fields are 1) enhancing competitive economy and sustainable economic growth especially through strengthening infrastructure, agriculture and aquaculture and human capacity development and 2) easing economic and social disparities between urban and local areas through improving education and public health.

(b) With over 40 years of experiences and knowledge transferred from Japan:

Morocco has been actively contributing to develop South-South Cooperation toward African nations in multiple fields such as fishery and road rehabilitation. In September 2003, to promote Japanese technical cooperation towards the southern African nations, Japan and Morocco signed a framework document regarding the “Japan-Morocco Triangular Technical Cooperation Program for The Promotion of South-South Cooperation in Africa.”

(c) Recent Major Projects:

Project for Flood Forecasting and Warning System in High Atlas Area (2010 grant), Rural Road Improvement Project (II) (2011, loan), Fez and Meknes Regions Water Supply Project (2011, loan) , Sewerage System Development Project (III) (2012, loan), Non-Project Aid on Next Generation Eco Friendly Vehicles (2012, grant), Basic Education Sector Support Project (2013, loan), Project for Construction of Shellfish Aquaculture Technology Research Center (2015, grant) , Green Morocco Plan Support Program (2016, loan), Project for Improvement of Equipment for Security Enhancement (2015, grant), Economic and Social Development Programme (2016 and 2017, grant), Oceanographic and Fishery Research Vessel Construction Project (2017, loan).

Cultural Exchange:

• (a) Receiving Moroccan students to study in Japan as Japanese governmental scholars every year
• (b) Senior volunteers from JICA teach Japanese language in several institutes including Mohammad V University.
• (c) Cultural grants were provided in the past, and cultural projects are being held in the Japanese Embassy.

Friendship League:

• Japan-Morocco Parliamentary Friendship League
• Morocco-Japan Parliamentary Friendship League
• Japan-Morocco Association
• Morocco-Japan Friendship Association

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