The estimated 70,000 Moroccans who crossed over to the Spanish North-African enclave of Ceuta on July 30 and 31 were not fleeing a failed state, a war or some natural catastrophe. They were making a rational decision to flee a country that offers them no hope of finding a job, let alone training. Despaired by their incapacity to change the system, they voted with their feet. Contrary to what right-wing politicians such as the Italian Prime Minister Georgia Meloni and German Chancellor Friedrich Merz asserted, the events of Ceuta were less an illegal migration crisis than a crisis of the model of economic development Morocco has adopted for the past 40 years.
Morocco offers the apparent paradox of an economy that is flourishing: investment amounted to 32% of GDP last year, inflation stood at 1% and debt to GDP at 67.2%, while FDI increased by 31% in the year to 30 June, which translate into 37% unemployment among young people. Last year, 230.000 of the 400.000 Moroccans who reached the age to start working were neither at work, in education or in training. The paradox is only apparent because a recent study on econometrics like GDP concluded ‘there appears to be an increasing gap between the information contained in aggregate GDP data and what counts for common people’s well-being’ (https://www.stiglitz-se-fitoussi.fr). Production, big business and financial markets all turn out to be overrepresented in GDP metrics, while the economic well-being of the ‘common people’ was experienced more in consumption, in household transactions and in many non-market transactions. Modern economists have rediscovered a truth that was obvious to early 19th century British rulers: the unprecedented rise in living standards that accompanied industrialisation was conditional on mass emigration to North America and Australia. The same was true of Italy later in the century. Emigration was a safety valve that was key to the political stability of both countries.
Unemployment is particularly high in the Rif hinterland along the Mediterranean coast where the well to do spend their summer holidays and King Mohamed VI was hosting the good and the great of his kingdom for the National Day (Fete du Trone) at M’diq, the royal palace in Tétouan. The contrast between the ‘haves’ and, 20km away, the ‘have nots’ at F’Nideq was there for all to see.
The King has often alluded to the need to reform what remains, for better or worse, a system of crony capitalism (Discours du Trone, 30/VII/2026). The Rapport de la Commission Spéciale sur le Modèle de Développement (CSMD, April 2021) lucidly diagnosed the failures of the economic policies pursued by successive governments over a generation. In 2019 the former head of the Confédération Générale des Entreprises du Maroc (CGEM), Salaheddine Mezouar, noted that ‘a culture has been created in which the private sector waits to see what the state will do to follow suit. Private enterprise is often equated with a firm’s capacity to win state contracts.’ He went on to question the capacity of what are essentially family-owned companies to take risks (‘L’État contrôle tout’, interview in Tel Quel, 13/IX/2019). The Haut Commissariat au Plan, the state’s planning authority, has questioned the return on capital of huge state investments. The essence of capitalism is to take risks. If only state groups such as the phosphate and fertiliser OCP Group dare take risks, intelligent ones at that, that raises doubts about Morocco’s future economic resilience.
Recent history offers an explanation for why the Moroccan model of economic development is stalling.
The Structural Adjustment Plan of 1985, which followed the country’s default on its foreign debt in 1983 offered thousands of entrepreneurs who were not close to the powers that be a chance to create a thriving textile and garments export industry and 200,000 jobs. The sector was destroyed in the 1990s by a lack of domestic reforms and an ill-timed opening to international markets. In the 1980s the King bought out the French bank Paribas’s investment portfolio in Morocco. Royal capitalism symbolised by the royal holding Omnium Nord Africain (ONA) replaced French capitalism and extended its investments to five key sectors: mining, energy, distribution, hotels and banking. In 1996 the autonomous CGEM was stripped of its autonomy by King Hassan II on the unproved pretext that it was aiding and abetting smuggling. In 2004 the privately owned Wafabank was bought by ONA. Private Moroccan capital took refuge in distribution and construction, where competition is inexistant. Free-trade agreements have since fostered a powerful import lobby, whose symbol is the departing Prime Minister Aziz Akhannouch.
The new generation of bankers are well connected with the palace, the real centre of power in the country.
In 2018 the World Bank that had until then cheered-on Morocco’s economic policy, deplored ‘the weakness of the private sector’ going so far as to reveal what everyone had known for decades, that in the much-maligned informal sector, 81.6% of all employment is accounted for by companies that employ fewer than 10 employees (World Bank-IFC, ‘Creating markets in Morocco)’. The respected central bank, Bank al Maghrib, has alluded diplomatically but repeatedly to these failings.
Widespread outrage followed the death of eight women at the hospital of Agadir last September. For many this was not an unfortunate accident but a reflection of a system designed to neglect the poor while allowing the rich to escape. Public hospitals are deteriorating as billions are spent on lavish projects such as football stadiums –the biggest in the world is being built between Rabat and Casablanca– that are deemed essential as Morocco prepares to co-host the next Football World Cup tournament with Spain and Portugal in 2030. Hence Generation Z’s slogan last September: ‘Les stades sont là, mais où sont les hôpitaux?’.
Kind Mohamed VI is well appraised of the reasons why Morocco’s economic model is crying out for drastic reform (Francis Ghilès, Morocco has swagger, Cidob, March 2025). Investments in huge projects are fine but they will not create the small- and medium-sized enterprises (SMEs) and job opportunities without which a new crisis in Ceuta is inevitable; or worse, the situation could lead to a social explosion in Morocco. The Moroccan economist Jamal Bouoiyour argues that what the kingdom needs is a new social contract (‘Crise de Ceuta: “Le Maroc n’a pas besoin d’un nouveau plan de développement, mais d’un nouveau contrat social’, Le Monde, 5/VIII/2026.) In their hugely influential Why Nations Fail, Daron Acemoglu & James A. Robinson demonstrated that lasting prosperity rests on the quality of institutions, free and fair competition and equal opportunity.
The ‘King of the Poor’ (Le Roi des Pauvres), as Mohamed VI liked to style himself at the beginning of his reign in 1999, has reduced poverty in Morocco. But the future stability of the kingdom is hostage to the inconvenient truth that millions of young Moroccans are denied any hope of social mobility. The question is: will the King and Morocco’s ruling elite grasp that thorny nettle?
