Transcript Investment Opportunities

Morocco
‫المملكة المغربية‬
Al-Mamlaka al-Maghribiya
Kingdom of Morocco
Chadwick Meyer
Stephan Sepanski
Craig Wehler
“Our Kingdom has seen reforms that have
had tangible repercussions on the economic
situation, but our ambition is to widen
prospects for growth even further by
promoting small and medium - sized
enterprises and encouraging both national
and foreign public and private investment,
while encouraging the private sector to be
more entrepreneurial... “
His Majesty King Mohammed VI
King of Morocco
Geography
Capital: Rabat; Casablanca is the
largest inhabited city
Area: 446,550 sq km
Coastline: 1,835 km
Terrain: Mountainous areas with
large plateaus and valleys, rich
coastal plains; Northern Mountains
are geologically unstable and subject
to earthquakes
Climate: Mediterranean, more
extreme in interior
Natural Resources: Phosphates, Iron
Ore, Manganese, Lead, Zinc, Fish,
Salt
Land Issues: Land Degradation,
Water Contamination, Coastal Water
Contamination
CIA World Fact Book
History
8000BC-earliest known inhabitants the
Berbers
670AD- Arab expansion and Berbers
adoption of Islamic ways
1771-Morocco 1st nation to recognize the US
1956-Independence from France and Spain
1970-Western Sahara Annex
2006-Celebration of 50 years of
Independence
Courtesy Wikipedia
US/Moroccan Relations
• Morocco was the first country to seek diplomatic
relations with the Government of the United
States in 1777, and remains one of our oldest
and closest allies in the region. Formal U.S.
relations with Morocco date from 1787, when the
two nations negotiated a Treaty of Peace and
Friendship. Renegotiated in 1836, the treaty is
still in force, constituting the longest unbroken
treaty relationship in U.S. history
– Source: US State Department: http://www.state.gov
Demographics
Population: 33,241,259 (July 2006 est.)
Age: 0-14 31.6%
15-64 63.4%
65+
5%
Average Age: 23.9 years
Growth Rate: 1.55%
Ethnicity: Arab-Berber 99%, Other .7%, Jewish .2%
Religions: Muslim 98.7%, Christian 1.1%, Jewish .2%
Language: Arabic, Berber Dialects, French
Literacy: 51.7%; 64.1% Male, 39.4% Female
CIA World Fact Book
Hofstede’s Dimensions
Government
• De jure Constitutional Monarchy with an
elected Parliament
• Executive Branch:
– Chief of State: King Mohamed VI
– Head of Government: Prime Minister Driss Jettou
– Cabinet: Council of Ministers appointed by Monarch
• Legislative Branch:
– Chamber of Counselors; 250 seats
– Chamber of Representatives; 325 seats
• Judicial Branch:
– Supreme Court
Courtesy Wikipedia
Economy
• GDP by sector: Agriculture 21.7%;
Industry 35.7%; Services 42.6%
• Worlds Largest Producer and Exporter of
Cannabis
• Unemployment Rate: 12.1%
– 19% of the Population is below the Poverty
Line
• Child Labor Issue- 1999 over 500,000
children under 15 were in the labor force
Courtesy Wikipedia
Notable Information
• Not a member of the African Union
• Mudawana- More rights for Woman; 1st of
its kind in the Arab and Muslim World
• Capital Punishment- highly debated and
Moroccan Parliament will vote in 2007
• Morocco is one of the primary launching
points of illegal migration from North Africa
into Spain
CIA World Fact Book
Communications
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1.3 million land lines
12.4 million cell phones
2,500 internet hosts
4.6 million internet users
35 television stations
Source: CIA Factbook
Internet Costs per Month
(Annual GDP per capita $4100)
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Menara ADSL 256 kbps (around $25) = $300 per year
Menara ADSL 512 kbps (around $45) = $540 per year
Menara ADSL 1 Mbps (around $60) = $720 per year
Menara ADSL 2 Mbps (around $70) = $840 per year
Menara ADSL 4 Mbps (around $95) = $1140 per year
Most individuals cannot afford their own personal internet service in
their homes.
Computer Usage
• 47% of people use a computer at home,
work or elsewhere on at least an
occasional basis (US 76%)
• 58% of men use a computer, 36% of
women use computers
Truly a World Wide Web
GLOBE GOING DIGITAL
2005 Pew Global Attitudes Survey
IT SWOT Analysis
Strengths
•
Very good telecom infrastructure compared to
regional countries
•
Government initiatives to promote IT
•
Potential availability of local venture capital
after discovery of oil reserves
•
Relaxed FDI regulations
•
Growing internet culture
•
Solid mobile platform
•
High mobile phone penetration
•
Maroc Telecom’s as a pioneer of IT
development
Weaknesses
•
Shortage of educated and skillful workforce
•
Weak banking system to support e-commerce
activities (payments, credit cards)
•
E-commerce (8% use, 2001)
•
Software piracy issue
•
Small scope of IT projects
•
Small PC penetration (high costs)
•
Lack of infrastructure in rural areas where
most of population
•
Enforceability of laws and regulations
•
Maroc Telecom monopoly position
Opportunities

Additional liberalization & deregulation of
telecom

Good relations with both E.U. and U.S.

Higher enrollment to IT and engineering
programs

Decent higher education institutes

Bilingual culture (Arabic and French)
Threats

Conflict with neighboring Algeria about
Western Sahara (where most oil reserves is
supposed to be)

Conflict with Spain about illegal immigrants
and fishing zones

Egypt and South Africa attracting FDI

Low literacy rates
Courtesy: American University: ICT Landscape in Morocco
Economy as it relates to IT
• Reducing restraints on private activity
• GDP- $135 billion (2005)
• GDP per capita- $4,100 (2001 est.)- CIA
factbook
• GDP real growth rate 1.7% (Inflation 1%)
• Unemployment rate 20% in urban areas
• Dirham now fully convertible for account
transactions
• 2000 sale of mobile telephone license
• Partial privatization of state-owned Telcom Co.
CIA World Fact Book
Economy as it relates to IT
• Inability to promote small and medium businesses
• Membership in IMF, World Bank, (WTO) and Paris Club
• 2004 signed free trade agreement with the US
– The U.S.-Morocco FTA eliminated tariffs on 95% of
bilateral trade in consumer and industrial products
with all remaining tariffs to be eliminated within nine
years
• Has a free trade agreement with the EU
• Selling government shares in the state telecom company
CIA World Fact Book
Investment Opportunity # 1
E-commerce: Website to sell
Moroccan Berber Blankets
E-Commerce Definitions
E-Commerce: The buying and selling
of goods and services on the
Internet, especially the World Wide
Web. a.k.a. 'e-business.
E-Retailing: Online retail selling.
IT SWOT Analysis
Strengths
•
Very good telecom infrastructure compared to
regional countries
•
Government initiatives to promote IT
•
Potential availability of local venture capital
after discovery of oil reserves
•
Relaxed FDI regulations
•
Growing internet culture
•
Solid mobile platform
•
High mobile phone penetration
•
Maroc Telecom’s as a pioneer of IT
development
Weaknesses
•
Shortage of educated and skillful workforce
•
Weak banking system to support e-commerce
activities (payments, credit cards)
•
E-commerce (8% use, 2001)
•
Software piracy issue
•
Small scope of IT projects
•
Small PC penetration (high costs)
•
Lack of infrastructure in rural areas where
most of population
•
Enforceability of laws and regulations
•
Maroc Telecom monopoly position
Opportunities

Additional liberalization & deregulation of
telecom

Good relations with both E.U. and U.S.

Higher enrollment to IT and engineering
programs

Decent higher education institutes

Bilingual culture (Arabic and French)
Threats

Conflict with neighboring Algeria about
Western Sahara (where most oil reserves is
supposed to be)

Conflict with Spain about illegal immigrants
and fishing zones

Egypt and South Africa attracting FDI

Low literacy rates
Courtesy: American University: ICT Landscape in Morocco
Proposal
• Host a website where small and medium
businesses can sell Berber blankets & rugs
• Why Berber blankets & rugs?
– Indigenous to the Berber population in the Moroccan
region
– Quality is known and appreciated worldwide
– Not easily imitated: Sustainable Competitive
advantage
– Just a jumping off point for other retail business
Proposal
•
Why e-commerce?
– Reduce costs and allow more flexible production methods.
– Higher returns for retailers who will no longer need a foreign
distributor or retail space
– Providing virtual shopping enhancing the ability of customers to
browse products quickly and easily
– Customers can compare prices easily
– Increasing market competition
– Raising productivity growth and the development will lead to new
job creation
– Increased government revenues through more taxable income.
– three conventions meant to promote e-commerce in Morocco
were signed in November 22th, 2000 between the government,
cooperatives and private operators
Current e-tailing sites
• http://www.shop.moroccantreasures.com
• http://www.maroctribal.com/
• http://www.midelt.com/
How?
• Host website in Rabat.
• Hire local webmasters, sales team, execution
team and call center
• Take advantage of low cost labor
• Take advantage of educated workforce
• Sales team should be of Berber descent, will
help to reduce cultural barriers
• Invite local businesses to a free conference to
explain the benefits of e-commerce
Finance
• We will charge a small commission on each
retail unit sold
• Local Government- King has stated that
country’s number one goal is to increase
(FDI) in small & medium enterprises
• The WTO
• We will sell ad space on the site
• Possible partnership with Google
• We will look to the World Bank for support
• UNCTAD (United Nations Conference on
Trade and Development)
Critiques/Challenges
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Cultural Barrier: Arab vs. Berber
Corruption: Its who you know
Logistics: Setting up retailers in rural areas
E-readiness: Are cultural groups ready
TAM: Issues with perceived ease of use
Meeting Demand: Slow handmade process
PC Penetration: 50% of pop. use a computer
Internet Penetration:
Government legislation: Continued privatization
Education in ICT: Seminars needed to teach
Investment Opportunity # 2
E-commerce: Websites to
advertise tourist sites in Morocco
IT SWOT Analysis
Strengths
•
Very good telecom infrastructure compared to
regional countries
•
Government initiatives to promote IT
•
Potential availability of local venture capital
after discovery of oil reserves
•
Relaxed FDI regulations
•
Growing internet culture
•
Solid mobile platform
•
High mobile phone penetration
•
Maroc Telecom’s as a pioneer of IT
development
Weaknesses
•
Shortage of educated and skillful workforce
•
Weak banking system to support e-commerce
activities (payments, credit cards)
•
E-commerce (8% use, 2001)
•
Software piracy issue
•
Small scope of IT projects
•
Small PC penetration (high costs)
•
Lack of infrastructure in rural areas where
most of population
•
Enforceability of laws and regulations
•
Maroc Telecom monopoly position
Opportunities

Additional liberalization & deregulation of
telecom

Good relations with both E.U. and U.S.

Higher enrollment to IT and engineering
programs

Decent higher education institutes

Bilingual culture (Arabic and French)
Threats

Conflict with neighboring Algeria about
Western Sahara (where most oil reserves is
supposed to be)

Conflict with Spain about illegal immigrants
and fishing zones

Egypt and South Africa attracting FDI

Low literacy rates
Courtesy: American University: ICT Landscape in Morocco
Proposal
• Design and host websites that tout the benefits and
experiences at Moroccan tourist sites
• Make money by taking a percentage of revenue for new
hotel bookings
• Why tout tourism?
– Country’s third largest source of revenue trailing only
phosphates and money transfers.
– Coastline on N. Atlantic Ocean and Mediterranean Sea
– Mountains and desert inland
– Casablanca, popular resort destination
– Current sites are poorly designed and maintained
Current Tourism Sites
http://www.emorocco.org/main.htm
http://www.visitmorocco.com/
http://www.morocco.com/
How?
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Host website in Rabat
Hire local webmasters and designers
Take advantage of low cost labor
Take advantage of educated workforce
Invite local businesses to a free
conference to explain the benefits of ecommerce
Finance
• We will charge a fee or percentage of sale for
each new hotel room or tour booked on our site
• Make additional money by taking advertising
revenue from hotels and tours to feature them
on the site
• Possible grant or money from the government as
part of their 2010 project
– Set to double the number of hotel beds in Morocco by
2010 to 250,000
Critiques/Challenges
• Language Barrier: French Spoken
Predominantly
• Need to translate website into multiple
languages based on target tourist
countries
• IT infrastructure in Morocco might not
provide for reliable hosting
Combining Both Opportunities
• One website to promote both E-retailing
and E-tourism in Morocco
• Economies of scale reduces
implementation costs
• Boost your web traffic to both sites
• Similar concept for 50 least developed
countries (LDCs) has been proposed by
UNCTAD, called e-tourism initiative 2007:
http://etourism.unctad.org
Questions?