PROGRAM INFORMATION DOCUMENT (PID)
October 21, 2011
Report No.: AB6839
Operation Name Morocco First Skills and Employment DPL
Region MIDDLE EAST AND NORTH AFRICA
Sector Tertiary education (40%);Other social services
(40%);Compulsory pension and unemployment insurance
(10%);Vocational training (10%)
Operation ID P120566
Lending Instrument Development Policy Lending
Borrower(s) GOVERNMENT OF MOROCCO
Implementing Agencies MINISTRY OF LABOR, MINISTRY OF EDUCATION,
MINISTRY OF ECONOMIC AND GENERAL AFFAIRS
Ministry of Labor and Vocational Training
Quartier Administratif, Rabat, Morocco, 10000
Tel: (212-5) 37 683 187/85 Fax: (212-5) 37 683 186
Ministry of National Education, Higher Education, Staff
Training and Scientific Research
Tel: (212-537) 217-586 Fax: (212-537) 217-585
Ministry of Economic and General and Affairs
Rabat - Agdal
Tel; (212) 537 68 73 16 Fax: (212) 537 68 77 42 87
Date PID Prepared October 20, 2011
Estimated Date of Appraisal January 13, 2012
Estimated Date of Board March 29, 2012
Corporate Review Decision Following the corporate review, the decision was taken to
proceed with the preparation of the operation.
I. Key development issues and rationale for Bank involvement
The “Arab Spring” has shown the powerful consequences of exclusion and high levels of youth
unemployment in the Middle East and North Africa (MENA) region. In particular jobs are at the
forefront of attention and unemployment is the main political and economic issue facing
governments. Despite a relatively favorable socio-political situation compared to some other
MENA countries, the Moroccan population has experienced frustration over governance, social
inclusion and employment issues leading since February 2011 to a series of street
demonstrations, a new constitution and early elections.
While Morocco has made commendable progress in bringing about a steady reduction in the high
unemployment rate, unemployment continues to remain one of the most critical development
challenges for the country. The creation of quality jobs is a primary concern to policy makers.
The lack of jobs (and “quality jobs” in particular) has limited the extent to which the sustained
economic growth of the past decade could be widely shared and eventually translated into
poverty reduction. Unemployment rates are stubbornly high, especially among the highly-
schooled youth and new labor market entrants. Labor force participation among women is low.
Informality is rampant, involving the majority of the labor force, and is associated with low-
quality/ low-value-added jobs. Low quality and insufficient employment poses a risk to social
cohesion and security, particularly in a region where a large cohort of unemployed and out-of-
the-labor-force young people may feel disillusioned about their ability to participate productively
in economic life.
The creation of “more and better jobs” requires a structural transformation of the Moroccan
economy, which in turn calls for a comprehensive and coordinated set of policies in several key
areas: (i) stability of the macroeconomic environment; (ii) an improved business environment
and a trade policy that supports the competitiveness of Moroccan products; (iii) a financial sector
that better serves smaller firms; (iv) a labor force that is better trained; (v) effective social
protection, and (vi) strengthened labor market institutions. The proposed Skills Employment
Development Program (SEDP) covers areas (iv), (v) and (vi). It is complementary to other
operations within the Bank’s program in Morocco, which address area (iv): The Education
Development Policy Loans, and areas (i), (ii) and (iii): the Competiveness Development Policy
Loan, and the Financial Sector Development Policy Loan.
The low level of education and skills of the workforce is among the main factors which constrain
the country’s economic growth and long-term competitiveness. The labor market is imbalanced,
with notable mismatches between job demands and graduation qualifications and skills.
Improving the quality of outcomes in the education and training sector has become a key focus
of the Government’s actions. To overcome the challenges faced by the education sector, the
Government embarked on a comprehensive reform of the education and training system, with the
promulgation of the 1999 National Education and Training Charter (CNEF).1 The CNEF, which
enjoyed strong national consensus, declared 2000-2009 the “education and training decade,”
thereby establishing education and training as a national priority. At the request of the
Government’s highest authorities, an ambitious Education Emergency Program (EEP)2 was
drawn up to accelerate this decade-long reform process.
In addition, the country launched a national employment strategy in October 2005. It includes a
set of active labor market programs (ALMP), referred to as “employment initiatives”, which
target young graduates job seekers. These ALMPs replaced and built upon the experience of
previous programs that have been implemented since the late 1980s. The Government is now
keen to improve the effectiveness of these ALMPs on the basis of recent evaluation studies, and
to strengthen its labor market institutions (especially public employment services) in order to
create an adaptable labor market. It has also recognized the need to strengthen the labor market
information system to better inform policies. The Labor Ministry is currently preparing a new
employment promotion strategy for 2012-2016.
The Government is addressing poor job quality for a large part of the labor force by encouraging
the formalization of micro-firms. A national strategy for micro-enterprise development has just
been validated and implementation of some tax-related measures has begun. Efforts to extend
social security coverage for salaried workers are underway. Morocco has also engaged in
reviewing its regulatory framework essentially to promote better quality jobs under the decent
Rationale for Bank Involvement
The Country Partnership Strategy (2010-2013) places the employment challenge squarely at the
center of Morocco’s development. The importance of this development issue was confirmed
through the Arab Spring civil protests that have been taking place in Morocco since February
2011. Support to skills development and employment is a key component of the Bank’s program
and the SEDP is a central instrument of the Bank’s lending support. The SEDP series will
contribute to achieving the first and second pillars of the CPS, namely: (i) encouraging growth,
competitiveness and employment; and (ii) improving the quality of service delivery to citizens.
The SEDP is designed in close collaboration with the Bank’s other activities that target growth,
private sector development and employment creation – namely the Competitiveness DPL and the
Financial Sector DPL. It also complements the Bank’s work in service delivery that is pursued
through the Governance and Accountability DPL (which itself builds on the past Bank
engagement in the Public Administration Reform program) and in the Education Sector DPL.
This multi-instrument approach is being pursued as a result of the analysis in the Bank’s CAS
Completion Report for the FY06-09 period that concluded that difficult policy reforms had more
successful implementation when reforms were not bundled together in a multi-sectoral
instrument but rather pursued with as streamlined an institutional structure as possible.
The SEDP was also designed based on the Bank’s long-term AAA engagement in analysis of
employment and labor market issues, skills and education, and social protection systems. In
http://www1.men.gov.ma/men/plan/SYNTHES_Fr.pdf, http://www1.men.gov.ma/men/plan/RESUME_Fr.pdf &
2008, the Bank prepared a comprehensive analysis 3 of factors impacting employment in
Morocco using the MILES4 framework, and provided a set of policy recommendations to address
them. This analysis provides the main conceptual framework for the present program.
The proposed program will be implemented in parallel with the Bank’s continued AAA program
in these areas and will especially benefit from the Employment technical assistance that is being
carried out in parallel. Its implementation will be informed and enriched by the Bank’s stepped-
up outreach and engagement with different development partners that has been given new
impetus as a response to the Arab Spring.
II. Proposed Objective(s)
The proposed program will support key measures that the Government intends to implement in
the relative shortterm in some of these areas. More specifically, the Skills and Employment
Development Policy Loan (SEDP) program will support the Government in implementing its
program of reforms aimed at improving employability, productivity and employment quality. It
will do so by contributing to the implementation of key reforms of the Government’s in the areas
of higher education, vocational training, labor market policies and institutions, and social
Its expected results are as follows:
The flow to the labor market of young graduates of higher education and vocational
training will be improved;
ALMPs will be more efficiently inserting stock of unemployed in the job market;
Intermediation services have become more accessible, especially for the non-graduate
youth unemployed, and able to match a larger amount of job seekers to vacancies;
More micro-firms will have an incentive to become formal; as result they will benefit
from public services that will boost their productivity;
More salaried workers will have access to risk management instruments thereby reducing
their household’s vulnerabilities to shocks; and
Policymaking in employment-related policies and programs will be more evidence-based.
III. Preliminary Description
The reform program supported by the loan is based on the following four pillars:
World Bank. 2008. Développement des compétences et protection sociale dans le cadre d’une stratégie intégrée
pour la création d’emploi, Mimeo, Washington D.C.: World Bank.
MILES, the name of the framework, is the acronym summarizing five elements determining job performance:
Macroeconomic performance, Investment climate, Labor market policies and institutions, Education and skills, and
Social protection for workers.
I. Matching skills developed within the vocational training and higher education systems to
the needs of the labor market;
II. Improving the effectiveness of intermediation services, including active labor market
III. Improving job quality; and
IV. Strengthening the labor market information system.
The program will contribute to improve the matching of skills developed within the vocational
training and higher education systems to the needs of the labor market, through:
Developing a new vocational training strategy, to match the higher education strategy,
with a view to orienting sectoral policy measures in a coherent and efficient manner;
Increasing the relevance of new labor market entrants’ qualifications;
Setting up a high-quality training system that continually adapts training programs to
labor market needs;
Extending vocational training coverage for increased equity; and
Carrying out evaluations on specific themes that enable stakeholders at all levels to take
decisions efficiently in the areas of employment and employability.
It also aims at improving the effectiveness of intermediation services, including active labor
market programs through:
Developing an employment promotion strategy to address the stock of unemployed
workers with inadequate skills;
Preparing a new set of ALMP that incorporate lessons learned from evaluations of
existing programs and take into account the evolution of the unemployed population
Strengthening labor market intermediation by public employment services; and
Improving information on the job market and professional orientation for youth.
It is expected to contribute to improving job quality by :
Encouraging informal non agricultural micro-firms are encouraged to become formal and
create better quality employment; and
Extending social security coverage for salaried workers.
Finally, the program will help strengthening the Labor Market Information System (LMIS) by:
Producing/sharing the data allowing stakeholders at all levels to take decisions on
employment and employability policies ; and
Systematically evaluating ALMPs .
Ten Prior Actions were selected for this DPL in support of the Government’s program:
Box 1: Prior Actions for SEDP1
1. At least 80% of open-enrollment public university faculties include, in all standard bachelor-level
programs, courses aimed at improving the non-cognitive skills that boost internal efficiency (foreign
languages, computer literacy, communication, study skills).
2. Labor Ministry’s Vocational Training Department establishes three (3) new vocational training institutes,
in high-demand sectors (namely, automobile, air and space, and fashion industries), under industry
3. Labor Ministry’s Vocational Training Department submits to Cabinet a draft Vocational Training Law,
which inter alia provides for vocational training to be under the overall governance of a foundation
specifically established for this purpose of the governance and financing of vocational training.
4. Labor Ministry’s Vocational Training Department carries out a technical audit of a sample of 48 NGOs in
order to identify capacity building needs in management and training, with a view to providing support for
NGOs intending to offer vocational training programs to out-of-school youth from disadvantaged
5. Labor Ministry, Ministry of Finance and Employers’ Federation (CGEM) have signed: (i) a partnership
convention which defines the Government’s and CGEM commitment to promote decent work 5 for young
unemployed graduate (Prise en charge par l’Etat de la couverture sociale [PCS]), and facilitate the insertion of
the hard-to serve unemployed in the job market (Contrat intégration professionnelle [CIP]); and (ii) An
addendum to the above-mentioned convention defining the number of target beneficiaries, budgets for 2012-
2016, and the M&E system including indicators; PCS and CIP have been launched.
6. All governance institutions described in Law No. 51/99 establishing ANAPEC are operational. The
Executive Committee (Comité d’études), chaired by the Labor Minister, and including representatives of
ANAPEC’s Board, workers and employers associations, and professional chambers has met (for the first
time) and performed its duty per article 8 of the Law.
7. Labor Ministry, in collaboration with Société nationale de radiodiffusion et de télévision (SNRT) and
ANAPEC, has institutionalized regular radio and TV campaigns to inform widely the population about new
job offers available in regional ANAPEC centers.
8. The Ministry of Finance implements two measures to encourage the formalization of micro-firms (revenue
below MAD 3 million per annum) : (i) Revenue tax is reduced from 30 % to 15 %; and (ii) and (ii) transition
from informal to the first level of formality will not imply any tax liability either on business revenues or
9. National Social Security Fund (CNSS) completes its extension plan with the inclusion of 150 000 new
beneficiaries between 2009 and 2011.
10 Labor Ministry’s Employment Department signs (i) with the National Statistics Office (HCP) a
memorandum of understanding allowing access to individual data of the labor force surveys [not yet
completed]; and (ii) with the Trade Ministry (MCINT) through CNSS a memorandum of understanding
providing access to individual data of the labor force industrial and service activity census.
IV. Poverty and Social Impacts and Environment Aspects
Poverty and Social Impacts
The Decent Work concept was formulated by the ILO’s constituents (governments, employers and workers) as a
means to identify the Organization’s major priorities. It is based on the understanding that work is a source of
personal dignity, family stability, peace in the community, democracies that deliver for people, and economic
growth that expands opportunities for productive jobs and enterprise development
The proposed program does not support any reforms that are expected to have negative
distributional impacts. The focus of the operation is centered on reforms aimed at: (i) matching
skills to labor market needs; (ii) improving the effectiveness of intermediation services,
including active labor market programs; (iii) improving job quality; and (iv) sStrengthening the
labor market information system. Indeed, the program is expected to have positive poverty and
social impact notably by: (i) reducing the risk of unemployment for vocational training and
higher education graduates; (ii) improving productivity and income; (iii) improving access to
social insurance; (iv) improving equity in access to training and job opportunities; and (iii)
developing ALMPs targeting the most-at-risk unemployed. As such, the operation is likely to
have overall positive social impacts, and in distributional terms, groups such as young graduates,
the unemployed, and those with poor quality jobs stand out to benefit from it. Indeed, the body
of analytical work supporting the operation confirms that the actions supported would essentially
benefit key vulnerable groups. Therefore it is proposed that an additional poverty and social
impact analysis (PSIA) is not warranted.
The SEDP program does not have any significant environmental implications. The project is a
development policy loan in support of a broad program of policy and institutional reforms, for
which the environmental requirements of OP/BP 8.60 apply. However, the policies supported by
the proposed operation are unlikely to cause significant effects on the country’s environment,
forests, and other natural resources. The measures supported under the operation are primarily
geared toward improving skills and employment and do not include an investment lending
subcomponent or physical investments.
V. Tentative financing
International Bank for Reconstruction and Development 50
VI. Contact point
Contact: Nadine T. Poupart
Title: Senior Economist
Tel: (212) 537-636-050
Fax: (212) 53763 60 51
Location: Rabat, Morocco (IBRD)
Contact: Sabah Bencheqroun
Title: Chargée de mission, Ministère des affaires économiques et générales
Tel; (212) 537 68 73 16 Fax: (212) 537 68 77 42 87
VII. For more information contact:
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-4500
Fax: (202) 522-1500