VZCZCXRO7115
RR RUEHBC RUEHDH RUEHKUK RUEHROV RUEHTRO
DE RUEHCL #0006/01 0131620
ZNR UUUUU ZZH
R 131620Z JAN 10
FM AMCONSUL CASABLANCA
TO RUEHC/SECSTATE WASHDC 8590
RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMGH/MAGHREB COLLECTIVE

UNCLAS SECTION 01 OF 02 CASABLANCA 000006 
 
SIPDIS 
SENSITIVE 
 
STATE FOR NEA/MAG, EB/IFD/OIA 
COMMERCE FOR NATHANIEL MASON 
 
STATE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ECON EAID PREL EINV ETRD EFIN PGOV MO
SUBJECT: MOROCCO'S SKILL SHORTAGE THREATENS ECONOMIC GROWTH 
 
¶1. (SBU) Summary: Morocco's leading CEOs agree that the country's 
education system has failed to produce graduates fit for the work 
place.  The skill shortage, specifically in the technical and 
engineering field, threatens the Kingdom's economic growth and 
competitiveness, the CEO's warned.  Public and private sector 
efforts to improve the gap between graduates' existing skills and 
the demands of modern jobs have done little to quell anxiety among 
Morocco's high-technology sectors, which are key pillars in the 
Kingdom's efforts to create a modern and out-looking services 
sector.  End Summary. 
 
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The Skills Gap 
-------------- 
 
¶2.  (SBU) EconOff recently met with students from Morocco's most 
prestigious business and management school, the Higher Institute for 
Commerce and Business Management (ISCAE), to elicit their thoughts 
on the growing disillusionment among the country's youth regarding 
employment prospects.  One of the leading causes to this phenomenon, 
the students said, was the schools failure to prepare students to be 
competitive in the work place.  "Our country's universities and 
training centers have failed to properly educate a generation of 
young people who simply cannot meet the expectations of modern day 
firms", one student said. 
 
¶3.  (SBU) In separate discussions, Morocco's leading CEOs echoed 
similar concerns about the failure of the country's education system 
to prepare new graduates entering into the workforce.  According to 
Coca Cola's CEO Imad Benmoussa, Morocco's education system has 
failed to produce graduates fit for the work place.   Mehdi Sahel, 
the CEO of the outsourcing firm Tata Consultancy Services (TCS), 
added that his company's greatest challenge in terms of business 
operation and growth is the scarcity of qualified personnel.  He 
explained that because of the limited supply of qualified employees, 
these candidates are in a position to demand higher wages that 
cannot be met by many employers.  Reinforcing this point, the 
director of the country's largest recruiting firm, Jamal Belahrach, 
explained that for each IT position advertised in the market, only 
four applicants out of 100 meet the minimum qualifications.  Out of 
these four, on average one is willing to accept the job at the 
advertised salary.  Belahrach lays the source of labor market 
imbalance at the feet of the basic education system in Morocco, 
which he categorizes as "catastrophic". 
 
¶4.  (SBU) However, even if Morocco's top universities could overcome 
the shortcomings in the educational system, the lack of work ethic 
in the younger population also remains a problem for employers. 
Ahmed Legrouri, the dean of engineering at Al Akhawayn University, 
told EconOff that Moroccan businesses complain that although recent 
graduates from engineering and technical schools may have adequate 
academic knowledge in their field, they often lack an understanding 
of what an employee is expected to do.  New hires, he reported, fail 
to report to work on time, neglect instructions, and resist 
direction from supervisors.  Moroccan schools and higher education 
institutions need to do a better job of inculcating in students the 
basic expectations of an employee, in order to make them more 
attractive to potential employers, he concluded. 
 
-------------------------- 
Bridging the Skills Divide 
-------------------------- 
 
¶5.  (SBU) Government programs to bridge the skills divide have 
yielded mixed results.  For instance, public institutions like the 
Office of Professional Training and Labor Promotion (OFPPT), which 
trains close to two-thirds of all the country's recent graduates 
have not translated into larger-scale reductions in unemployment. 
While OFPPT is expected to double the number of trainees in 2010, 
Morocco's OFPPT southern regional director told EconOff that he 
worried about the lack of jobs once twice as many graduates entered 
the system.  And although state grants of up to USD3100 exist for 
engineering and higher-technology sectors to train college 
graduates, employers have been reluctant to participate in such 
programs due a long and cumbersome reimbursement process, said 
Mohamed Tamer, the Vice President of the General Federation of 
Moroccan Business (CGEM). 
 
¶6. (SBU) "What the government has to understand is that improving 
the quality of education, not the quantity of students and trainees, 
will be critical to preparing Morocco's graduates to be competitive 
in today's job market", argued Rachid Benabdallah, the President of 
Al Alkhawayn University.  With an official unemployment rate that 
remains higher among the educated (19 percent) than the non-educated 
(5 percent), it is not clear that higher public expenditures to 
increase the number of educated youth alone will improve employment 
 
CASABLANCA 00000006  002 OF 002 
 
 
levels.  As a result government agencies are beginning to place more 
emphasis on the quality of education, although such reform will take 
years before Morocco reaps its benefits.  "Morocco's educational 
system has to be restructured if the country's higher value-added 
industries are to succeed," TCS's CEO warned. 
 
¶7.  (SBU) Aside from governmental intervention, ISACE students 
unanimously agreed the private sector had a bigger role to play in 
promoting education and job growth.  For instance, enterprise 
promotion programs targeting young people, such as business 
incubators, were cited as a promising area because they address 
practical hands-on experience and competency issues many young 
adults lack in the work place.  As an example of private sector 
intervention in this context, Coca Cola's CEO told EconOff that his 
company is slated to open a university that will help bridge the gap 
between graduates' existing skills and the demands of modern jobs. 
 
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Comment 
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¶8.  To modernize its workforce and job creation systems, public 
private partnerships in education and training should be created in 
the context of growing an economy that can export higher value-added 
goods and services.  Specifically, university and private sector 
partnerships should join forces to conduct the R&D required for a 
high value-added economy.  Building capacity at the university level 
and linking capabilities among faculty, researchers, and graduate 
students with the needs of private enterprises, should figure 
prominently in Morocco's efforts to create a modern and out-looking 
services sector.  Morocco risks losing out to better educated, more 
dynamic workforces in the MENA region, if it fails to address the 
skills gap. 
 
MILLARD