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Prospects of Economic Synergies Between Morocco, Jordan and the GCC

GCC Expansion: The Case for Morocco and Jordan The presentation examines envisioned bilateral economic benefits of Moroccan and Jordanian membership to the GCC. An economic integration exercise not only benefits Jordan and Morocco, but also diversifies the GCC’s overall transition to post-oil economic foundations. Benefits to the existing GCC members could be enhanced by leveraging the respective strengths these countries have. In Morocco’s case, they are its proximity to and close economic relationship with Europe and the US; abundant natural resources; stable macroeconomic conditions and relatively low-cost skilled labour. Although Jordan’s population is considerably smaller, it is more amenable to leveraging its skills in ICT, education and knowledge-based industries. The majority of Morocco’s trade is tied geographically to Europe. The lion’s share of its trade with the GCC is dominated by downstream petroleum products while a large portion of Morocco’s exports to the GCC are associated with precious stones. Meanwhile, trade in Jordan is tied to the United States,China and India – large and rapidly growing markets. Jordan also imports a significant amount of petrochemical products from the GCC. Whilst there could be room for improving and diversifying the GCC-Morocco trade dynamic, the presentation instead argues to leverage Morocco’s long-established relationship with Europe in parallel. Jordan-GCC trade is significantly stronger, but that does not inhibit making use of Jordan’s FTA channel with the United States and EFTA with Europe. The economic benefits of membership for Morocco, Jordan and the GCC could improve in other dimensions too. In the case of labour relations, GCC integration yields a smoother transition of surplus young skilled labour force to work in the GCC. The GCC also benefits from better knowledge transfer from the Maghreb and Levant experience in specific areas of strategic GCC investment such as solar power. Furthermore, the GCC’s long-run food production diversification to water-rich countries could also benefit from including Morocco in their respective national food security strategies. Aside from the global slowdown, Morocco and Jordan have exhibited strong economic performance over the last decade. Both have sound productivity and innovation rankings. With educations systems crafted to further increase their potential, the presentation argues that they are well positioned to complement and strengthen post-oil diversity in the GCC economies.
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  Page 0   Prospects of Economic Synergies:Jordan, Morocco and the GCC October 30th 2011 Ikaraam Ullah Prospects of Economic Synergies: Jordan, Morocco and the GCC, October 30 th 2011    Page 1    Introduction  GCC Convergence Criteria  Synergies  Labour force  Goods and Services    Investment synergies  Concluding remarks   Outline    Page 2   ã In May 2011, the Gulf Cooperation Council (GCC) announced the bid towelcome Jordan and Morocco to join the council. ã Short-term need to create opportunities across the region. ã Long-term need to develop non-oil sector to diversify away fromhydrocarbons. ã Post-oil: High dependency GCC budget dependence (~80%) on finitehydrocarbon resources which are vulnerable to price shocks ã GCC and Morocco/Jordan share economic synergies that lead tomutually beneficial goals. Introduction    Convergence  
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