Democracy Lab logo Morocco Is Running Out of Time Unemployment and stagnation are fueling extremism — and the king's gradual reforms aren't cutting it.

The Islamic State has thrived by exploiting the anger of the politically and economically marginalized in unstable and dysfunctional countries like Iraq, Syria, and Libya. Why, then, has it begun targeting the relatively stable kingdom of Morocco? Hardly a week passes without Moroccan security services announcing the arrest of members of an alleged Islamic State sleeper cell. While precise numbers are unavailable, between a few hundred and over a thousand Moroccans have been recruited and trained by the Islamic State in Syria. Moroccan authorities fear these radicalized fighters will return to seek further recruits and launch attacks on home soil. What actions the returnees take and the likelihood of their success could depend on the level of popular discontent that awaits them.

On the one hand, Morocco’s rising poverty, growing youth unemployment, and suppression of peaceful political dissent create a fertile Islamic State recruiting ground. On the other hand, with an innovative, growth-oriented approach to development that combines the best of western and Islamic economic principles and a spiritual but anti-theocratic style of Islam that discourages extremism, Morocco could weather the storm — and even transform itself into an economic model for countries seeking to defuse the Islamic State threat. The outcome is far from certain, and ultimately depends on whether King Mohammed VI has the political will to accelerate the pace of reform.

During the Arab Spring in 2011, the king quickly initiated a series ofconstitutional reforms after pro-democracy demonstrations broke out in Morocco. Though he stopped short of relinquishing his own power in favor of a constitutional monarchy, he did increase the role and independence of the prime minister and parliament. In addition, Morocco’s new constitution provided for greater civil liberties and expanded human rights — although similar promises had been made in the past, only to be rescinded. Nonetheless, the new constitution succeeded, at least temporarily, in defusing the crisis. In contrast to so many other countries, Morocco appeared to have emerged stronger politically from the Arab Spring.

But if the unrest was to be controlled, Morocco’s deep economic malaise would also need to be addressed. Its economy had been hard-hit by the international economic crisis of 2008-09, with falling remittances and high unemployment among workers returning from overseas. Despite a growth rate of 4.6 percent between 2000 and 2010, levels of poverty, inequality, illiteracy, and unemployment among recent graduates had not improved since 2000, even as elite corruption and cronyism grew increasingly conspicuous.

Both the king and the coalition government formed by the Justice and Development Party (PJD) after the 2011 elections attempted to institute economic reforms. The king announced the expansion of a decentralized strategy to promote bottom-up democracy by allowing communities to take charge of their local affairs. The PJD went even further, promising to create jobs and raise educational levels while curbing corruption and improving government effectiveness, rule of law, and the business climate.

However, while Morocco had moved up two rankings on the Human Development Index by 2013, the country’s progress did not extend to other areas. Economic growth declined to an average of 3.7 percent between 2011 and 2014. The unemployment rate, which had fallen to 9.1 percent in 2010, has since been stagnant, with only 21,000 new jobs created in 2014. This slowdown occurred despite a relatively liberal free market approach to economic activity that attracted $3.4 billion in direct foreign investment.

The composition of Morocco’s unemployment reveals some especially troubling patterns. At 20.6 percent, youth unemployment is especially high and rises to a staggering 39.9 percent among urban workers aged 15-24. The marginalization of such large groups of young Moroccans creates a potential powder keg for revolution. Furthermore, the rate of unemployment rises along with job qualifications — from 4.5 percent for unskilled workers, to 21.7 percent for workers with vocational skills, to 24.6 percent for university graduates. Not surprisingly, Moroccans’ frustration with the government has skyrocketed, as illustrated by the decline in social capital (basically a measure of trust), which plummeted from 13th in the world in 2010 to 84thin 2014.

The poor performance of the Moroccan economy has less to do with the viability of the Moroccan model than with its implementation, particularly in the area of governance. The political and constitutional reforms that were expected to usher in a period of improved governance failed to do so — in fact, because of an over-emphasis on laws and institutional proceduresinstead of substantive reform, the country’s performance deteriorated on five of the six World Bank Governance Indicators between 2010 and 2013.The human rights provisions of the 2011 constitution have been largelyignored.

Morocco’s economy has been hindered by the slow and tentative pace of change. The PJD seems to have subscribed to the Chinese idea ofevolutionary institutionalism. Rather than risk dramatic changes in a new and highly uncertain environment, the Moroccan government has moved incrementally — always looking for better ways to improve the economy, but with minor reforms that can easily be reversed if proven ineffective.

Some excuse Morocco’s incremental pace of change in light of the dislocation and chaos created throughout the region when earlier neo-liberal market reforms were applied too swiftly. However, a more likely explanation is that, despite the appearance of comprehensive economic management, there is little real coordination between the ministries and agencies responsible for implementing key reforms. Because Morocco is still very much a monarchy, the PJD has no control over several key ministries, whose directors report primarily to the king. The faltering pace of economic reform can at least partly be attributed to ministries working at cross purposes, each focusing on its own priorities.

In order to create the necessary economic and social stability to counter the Islamic State, it is critical that Morocco complete its transition from a rent-based, special interest, distribution economy to a modern, production-oriented economy. It can only do so, however, if the government is allowed to apply a pragmatic, consistent, and goal-oriented approach to development. Toward this end, it is critical that the king lend his authority to the PJD to quickly overcome the opposition of vested interests.

While the slow, incremental approach to reform propelled the Chinese economy, China had the option of proceeding at its chosen pace. With the Islamic State threat looming, time may be a luxury Morocco can no longer afford. If the Arab Spring had resulted in a region-wide transformation to more democratic governance and effective policies to counter economic and political marginalization, groups like the Islamic State might never have evolved. For the time being, Morocco still has the chance to make that transformation. The likely alternative is a future defined by violence and war.

In the photo, unemployed Moroccans demand more job opportunities in Rabat.