The economic ties between Israel and Morocco are growing, with hopes of ushering in a new era of prosperity for both countries and potentially the entire region, according to business and industry experts.
Just two years after the signing of the Abraham Accords, memorandums of understanding are turning into business deals, and trade between Israel and Morocco is spiking at unprecedented rates.
“In the last couple of years, the floodgates have opened,” said Jeremy Lustman, who leads DLA Piper’s Israel Country Group.
The international law firm has a branch in Morocco, which Lustman said has been closely collaborating with his team since the signing of the accords, as an influx of Israeli companies have started to query about entering the Moroccan marketplace.
Trade between Israel and Morocco reached $4.7 million in July 2022, constituting a 213% increase from July 2021, according to the most recent figures of the Central Bureau of Statistics.
For the first seven months of 2022, bilateral trade increased to $24.3m., constituting a 16% increase from the first seven months of 2021. Total trade with Morocco in 2021 was about $42m., according to the Israel Export Institute.
“Morocco is very liberal and open-minded.”Pankaj Bhula
“Morocco is very liberal and open-minded,” explained Pankaj Bhula, who serves as the regional expert in Morocco for the Israeli cyber security company Check Point. He told the Magazine that while some African countries have mandates not to work with Israeli companies, Morocco is not only “well aware of the value” of Israeli technology but sees itself as a potential gateway for these Israeli companies to the rest of Western Africa.
Moreover, while the cultures can sometimes clash and collaboration can require a learning curve, Morocco is very proud of the nearly 500,000 Israeli citizens of Moroccan descent, explained DLA Piper’s Camilia Benani, who advises financial institutions and state-owned companies in oil and gas, mining and infrastructure projects where she lives in Morocco.
“We are very tied to one another and have always had very close relationships,” Benani said. “Since resurrecting diplomatic relations, it is amazing to see how many people are looking to collaborate.”
Last month, Israel announced that it would open an economic attaché’s office in Morocco in 2023.
“The connection with Morocco seems the most natural thing in the world.”Israeli Economy Minister Orna Barbivay
“The connection with Morocco seems the most natural thing in the world,” said Economy Minister Orna Barbivay at the Morocco Israel Business Conference, where she made the announcement. “There’s a mutual desire to promote effective economic processes. The Abraham Accords attests to the fact that Israel is open to peace with whoever wants it, and the economic opportunities are extraordinary. Morocco is just the beginning, and the potential is huge.”
In February, Barbivay and Moroccan Industry and Trade Minister Ryad Mezzour signed an economic cooperation and trade agreement stating that they would work together to remove “all barriers to normal economic relations,” including legislation, standards or discriminatory practices.
Israel had a liaison office in Rabat from 1994 to 2000, and Morocco had one in Tel Aviv.
A goal, according to Israel Export Institute chairperson Ayelet Nahmias-Verbin, is to connect the economy of the Eastern Mediterranean – Israel, Greece, Egypt, and Turkey – with the economy of the Western Mediterranean – Morocco.
“When you look at the Mediterranean, we are on one end and Morocco is on the other,” she told the Magazine. “With warming relations with Turkey on the one hand and Morocco on the other, we can start thinking about creating an economy for the hundreds of millions of people living in the region.”
A former Labor Party MK, Nahmias-Verbin noted that while around 75% of the export institute’s 5,000 members are small and medium-sized companies, when it comes to Morocco it has been able to assist “one of the biggest companies in Israel to open business in Morocco,” although she did not name the firm.
“Morocco is the gateway to Africa,” she stressed. “It is much easier to find a partner in Morocco who can open the market in Africa for you... There were some companies in Morocco before the accords, but not on a large scale. Today, relationships and trust are being built.
“Geopolitics is not gone because of the Abraham Accords,” Nahmias-Verbin added. “But I think the economy in this day and age takes a much more important place in the dialogue than ever before.”
Cooperation in energy and natural resources
Opportunities for collaboration are especially hot in specific sectors, such as water, agriculture and food technology and energy, explained Aviva Steinberger, director of innovation diplomacy for Start-Up Nation Central, which has been working closely with Morocco, such as holding an innovation conference there in March.
“The king is investing a lot in the innovation ecosystem, specifically in areas in which Israel has a lot to say,” she noted. “We found a lot of matches.”
In March, for example, Morocco was forced to shut off tap water for 20% of its population amid the worst drought it had experienced in 40 years. Israel has largely solved its water shortage by building sophisticated desalination and water-treatment plants.
“The country has a real interest in understanding how Israel addressed its water challenges,” Steinberger said.
Morocco is also laying the groundwork for a network of alternative energy sources and has set a goal of producing 52% of its electricity through renewable energy by 2030.
Last month, the Israel National Energy Research Consortium (INERC) and Mohammed VI Polytechnic University in the name of the Moroccan National Energy Transition Consortium (MNETC) signed a bilateral agreement for energy cooperation at Bar-Ilan University. Under the agreement, joint research will be conducted in such areas as rechargeable batteries, recycling, solar energy and the hydrogen economy, as well as solving Morocco’s major challenge of storing and transporting its energy.
The relationship between INERC and the polytechnic institute started about a year ago through a series of Zoom meetings, explained Prof. Doron Aurbach, scientific director of Bar-Ilan’s Energy and Sustainability Center who heads INERC.
The signing ceremony substantiated the relationship, which is funded separately in both countries. Morocco scored $20m. in support from a major phosphate company to support the work the countries will do together over the next five years, he said. Israel’s funding comes through INERC.
“We will have immediate results,” Aurbach said, noting that the sides decided to compose together peer-reviewed articles that will contribute to scientific literature. In addition, Israel will immediately absorb 15 Moroccan graduate students for the coming academic year.
“This is something that can reflect on the entire Middle East, not just the countries signed on the Abraham Accords agreements but also because of our special relationship with Jordan in terms of water and energy,” Aurbach said.
“Research has no limits, and it can spread to surrounding countries for the benefit of our populations and other populations, added H.E. Abderrahim Beyyoudh, the head of the Liaison Office of the Kingdom of Morocco to the State of Israel.
Helping Morocco become cyber secure
Another area of cooperation is cybersecurity.
Israel’s Check Point hired Bhula shortly before the signing of the accords. He said that since 2020, the office has grown by two more people and is likely to hire another employee in the coming months. He said Check Point works with local IT companies to sell its technology and provides the support.
During the pandemic, Morocco was among the top five countries in which mobile phone users were attacked by malware, Morocco World News reported, and was in the top 10 for the most malware attacks in general. Moreover, Bhula said that, like the rest of the world, Morocco is experiencing an influx of cyber threats in general in all areas.
Check Point generally serves as the first point of defense, mostly for enterprises and financial institutions, and has the highest prevention rate of any similar company in the world at 99.9%.
“We need to help Morocco as a country become cyber resilient and secure,” Bhula told the Magazine. “In South Africa, there is no agreement with the Israeli government and we already have a head start there and are really running. Now that we have the Abraham Accords agreement in place, we can leverage this agreement and the opportunity to help Morocco.
“What we are doing now is only the tip of the iceberg,” he added. “There is so much opportunity in Morocco.”
Israel as a model for Moroccan economy
Morocco is not looking to enter the Israeli marketplace in the same way as Israel would want to enter Morocco’s but rather to tap into or invest in Israeli technology.
While Morocco has a population of 37 million people, Israel has only nine million. Moreover, while Israel is only beginning to enjoy relations in the region, Morocco, as noted, has ties with all of Africa – a continent with an estimated 1.2 billion people. In Western Africa, there are nearly 472 million people.
“Morocco is turning to Israel for ideas, and Israel sees Morocco as a bridge to the African markets,” Steinberger said. “We are seeing and having conversations with Moroccan investors who are looking to... invest in Israeli innovation and want to better understand which Israeli technologies could be attractive to them.”
Since the Start-Up Nation Central’s March conference, she said the organization has conducted a number of joint workshops and seminars using Israel as a case study to help Moroccans learn from the Jewish state’s successes and failures.
She said Moroccan business leaders want to know how Israel evolved from a resource to a knowledge economy, something Morocco has set its sights on doing.
For Israeli companies looking to set up shop in Morocco, DLA Piper’s Benani said they can hire lawyers to help assist in necessary transactions, such as hiring employees or ensuring that the company complies with local rules and regulations.
In general, she noted that Morocco is very friendly to foreign business, as it operates similar to Europe. She estimated that it takes only about 10 days to set up a new foreign company in the country. In addition, there is a strong foreign exchange office in Morocco, so foreign investors “have no problem repatriating all this cash abroad.”
She said, “The business climate is good, and Morocco is trying to get even better.”
“It’s nice to see that post the honeymoon period, these relations are creating traction,” DLA Piper’s Lustman added. “I think the trend will continue.”