Moroccan economy gets a rainy boost.

Even as the world prepares itself feverishly to enter the twenty first century with a technological bang, there are still certain natural phenomena that dictate the progress or otherwise of many a nation. One such phenomenon is rain.

The importance of rains and water cannot be underestimated for the progress and prosperity of any country, rich or poor. And so it is that Morocco’s fortunes got a mighty dose of heavenly favor in the form of abundant and well-distributed rainfall, like never before in the past few decades.

In this time of global economic crisis, increasing unemployment, falling revenues and incomes, Morocco actually expects to be in position to cut income taxes, increase salaries for public servants, increase public spending on infrastructure projects, channel more investment into eduction and health and so on. In other words, Morocco is planning to make the lives of its citizens easier and more comfortable. Something the citizens of the mightiest economies of the world would envy right now.

Morocco is primarily an agrarian economy and does not have oil wealth. However, it the world’s largest producer and exporter of phosphates that is used in agriculture and industry. The abundant, and more importantly, the well distributed rains this season have literally set the Moroccan economy on fire.

The question now is, how far can Morocco carry on with this rainy dose of growth. It’s stated aim is to achieve a 6% growth rate for fiscal 2009. There are trouble spots, of course. Tourism is down affecting one of the major sources foreign exchange. As is the case with foreign remittances.

Industrial production is also said to be declining. However, as agriculture is the mainstay of the Moroccan economy, and is doing quite well, Morocco can very well smile its way to the Bank, at least for now. And if it acts wisely now, and prepares itself for a rainy day today, it may avoid the usual pitfalls in the growth of its economy.

Towards a slow and painful recovery.

Those desperate for some positive news on the economic front in the United States have something to cheer about. For the first time in nearly fifteen months, the U.S. unemployment rate fell by a smart margin, indicating a slow and painful movement towards recovery. Provided, of course, the relative data as presented in surveys carried out by Bloomberg and others is accurate and reliable.

One of the most important aspects of the current crisis is the issue of credibility of the institutions that were considered above reproach, and totally reliable. As it transpired later, many of these institutions were found sorely wanting in competence, as well as integrity.

The optimism about the current situation is mainly on account of the fact that job losses that were supposedly estimated to be in the region of approximately 325,000, turned out to be only around 247,000. It is not clear if the estimates were accurate or there is a real improvement in the ground level situation.

Some of the areas where job losses occurred in good numbers are the financial services, the construction sector, and the hospitality industry, while the auto industry added several thousand jobs in the otherwise cloudy scenario.

It remains to be seen, however, as to when and at what rate consumer spending would improve. That would be a key indicator of consumer confidence, as well as availability of disposable incomes. The economic recovery chain does not appear to be consistently strong throughout. There are weak points that could easily pull the positives back to square one.

If the American economy is really on the mend, it is definitely not at a pace that many fondly look forward to.