CNN - 15/4/2006
Although only the narrow Straits of Gibraltar separate Morocco from Spain, the announcement last week of huge capital investment by the United Arab Emirates has brought the Gulf states economically closer to the North African country than their European neighbors.
During the annual tourism conference held in Tangier, the agenda was dominated by the news that two Dubai-based companies are to make an overall investment of $20 billion in Moroccan tourism and infrastructure.
Although the visitors who are likely enjoy the new tourist facilities will be largely drawn from Europe, the deal puts the UAE at the top of the investors list in Morocco.
The agreement was formalized at the royal palace in the presence of the Moroccan King Mohammed VI who has in recent years made steady progress in opening the economy to foreign trade and investment.
The North African country has also made financial reforms aimed at encouraging the continued growth of the Moroccan economy
Dubai International Properties, the overseas property development arm of Dubai Holding, and Emaar Properties together will fund projects worth $18.9 billion to begin within the next three years as part of the overall investment of $20 billion.
Size of investment causes surprise
While Africa has suffered from western companies growing reluctance to invest, Arab groups, looking for ventures to expand their area of operations, are opting for North Africa for cultural and linguistic reasons. This expansion has also been aided by liberalization of Middle Eastern economies.
The size of the investment caused surprise, and some analysts pointed to the irony of a Morocco about to celebrate 50 years of independence, being economically "colonized" by another power, but officials were keen to emphasize the positive.
"The UAE has become the single largest source of foreign investment in Morocco," said Salaheddine Mezouar, Morocco's Minister for Trade, Industry and Economy. " We anticipate more investment of this sort in the future."
The ventures include three developments stretching from the Atlas Mountains to the Atlantic coast including golf and ski communities, Riviera-style living and luxury spas and resorts.
Mohammad Ali Al Abbar, Chairman of Emaar, put the investment in perspective by explaining that his company's international operations will dominate future activities. "In two years, 80 percent of our projects will be located outside the UAE," Al Abbar said.
Inevitably the furore over Dubai Ports' acquisitions in the United States, will slow down the flow of Arab money into the the American economy.
It is said that Emaar's projects in Morocco will be owned by it, including the land on freehold. Emaar has also made inroads into Egypt, and it is negotiating for new projects in Tunisia.
In addition to development in the Moroccan capital, Rabat, $2 billion has been earmarked for tourism projects in the valley of Bouregreg, the river that separates Rabat from the city of Sale.
In the Marrakech area, millions of dollars have been allocated for projects in the upper Atlas mountains and areas surrounding the terracotta-colored city.
The delegates at the annual tourism conference were interested to learn that Tangier's rather run-down tourism infrastructure will receive $650 million for the construction of hotels and different businesses in a city that is only separated from Europe by the Straits of Gibraltar.
The Chairman of Emaar says that the projects will enhance Morocco's status as a tourist destination and residential investment location.
"Morocco is a natural fit with the types of world class communities we offer," explained Mohammad Ali Al Abbar.
"It has distinctive natural beauty, from rocky coast to snow-capped mountains, and a climate conducive to year round outdoor living and leisure. As a destination and a place to live it is increasingly sought after."