Morocco Develops Automobile Industry Despite Global Trade Slowdown

Employees work at the assembly line of Dacia Sandero cars at a factory operated by Somaca in Tangiers (file photo: Reuters)
Employees work at the assembly line of Dacia Sandero cars at a factory operated by Somaca in Tangiers (file photo: Reuters)
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Morocco Develops Automobile Industry Despite Global Trade Slowdown

Employees work at the assembly line of Dacia Sandero cars at a factory operated by Somaca in Tangiers (file photo: Reuters)
Employees work at the assembly line of Dacia Sandero cars at a factory operated by Somaca in Tangiers (file photo: Reuters)

Morocco’s recent involvement in global value chains for automobiles is an example of a country’s ability to expand its own trade despite global trade slowdown, according to the Arab Sustainable Development report.

The report, issued by the United Nations bodies operating in the region, headed by the Economic and Social Commission for Western Asia (ESCWA), said that Morocco sought to diversify its sources of growth through the development of the automotive industry by launching its Renault-Nissan Tangier plant in 2012.

The report noted that the automobile manufacturing saw a 20 percent annual growth in Morocco, and became a major driver for the country’s exports, adding that it is supposed to help launch the Peugeot-Citroen plant in Kenitra, further consolidating its position.

It also indicates the untapped potential for Arab countries to participate in the international economy.

The report noted that “improved investment is a policy choice” calling upon Arab countries to support innovation and entrepreneurship, absorb the potential and capacities of youth, create a conducive environment for the development of new industries, and integrate countries further into global value chains.

“Make greater efforts to forge agreements between countries to foster full regional integration and increased access to global value chains.”

In the field of adopting modern technology as a mechanism for implementation in the Arab region, the report sees that Morocco, along with a few other countries, has adopted noteworthy initiatives. It pointed out that educational systems, political structures, and social norms in most countries do not focus on critical thinking and creativity, which prevented the emergence of a critical mass of people effectively using, innovating, and producing technology.

The weak absorptive capacity in many countries has resulted in the widespread consumerist approach where people use technologies and products, without producing or adapting them according to their local needs.

Morocco is one of the few Arab countries that have adopted guaranteeing access to information as a fundamental right, according to the report.

Also, the document highlighted that some countries have made great strides in reducing maternal mortality, including Morocco, especially in rural areas.

It called for greater equality in health care provided especially maternal health care and during childbirth, however, it criticized the absence of social protection systems that mitigate marginalization and exclusion in the region.

The report warned that in the Arab region, the poor, refugees, and displaced people are at the risk of being left behind when it comes to social development goals. It cautioned that the impact of the situation is borne disproportionately by groups that face multiple layers of social, economic, or political marginalization including women, persons with disabilities, migrant workers, refugees, and displaced persons.



Gold Bounces Back from One-month Low after Fed Jitters

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
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Gold Bounces Back from One-month Low after Fed Jitters

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo

Gold prices erased losses to gain on Thursday, after dipping to the lowest level in a month earlier in the day on the Federal Reserve's hint of a possible rate cut slowdown next year.
Spot gold gained 1.2% to $2,617.96 per ounce as of 0748 GMT, having hit its lowest since Nov. 18 in early trade. However, US gold futures were trading 0.8% lower at $2,632.00.
Bullion declined more than 2% on Wednesday after the Fed lowered rates by 25 basis points as expected, but indicated that there will be fewer cuts by the end of 2025, boosting the dollar and bond yields.
Fed Chair Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation.
"The big question over here is that because the Fed says they will still be data-dependent and if Trump's policy starts to actually see inflation, a big risk would be that the Fed may not cut rates next year at all," said Kelvin Wong, OANDA's senior market analyst for Asia Pacific.
Markets now expect interest rates to remain unchanged at the Fed's January meeting.
"A rate cut is usually supportive for the yellow metal... but right now gold is up on short-covering after the dip," said Ajay Kedia, director at Kedia Commodities, Mumbai.
Traders are now awaiting key US GDP, initial jobless claims data later in the day and core PCE data - the Fed's preferred inflation measure - on Friday.
"If the US Personal Consumption Expenditures (PCE) data comes in line with expectations that shouldn't be a big surprise. But in case it inches up to 3% and above, we could see some pressure on gold again," Wong said, adding that very short-term oriented speculators are looking for opportunities to buy the dips.
Higher rates dull the appeal of the non-yielding asset.
Spot silver gained 0.8% to $29.59 per ounce, platinum added 0.9% to $927.75 and palladium advanced 1.7% to $917.86.