By Amena Bakr
Kingdom's poor infra also hurting further investments agricultural field - trader.
Morocco still remains a marginal market for Gulf investors due to poor infrastructure and red tape, Gulf Arab executives said on the sidelines of an investment conference Thursday.
"I think that the Moroccan government's vision of easing the way for Gulf investments is not compatible with the regulations that they place which take a long time to complete," said Ahmed Al Kandari, general manager of Kuwait based Al Kandari General Trading & Contracting.
The kingdom's poor infrastructure is also discouraging additional investments to be made in the agricultural field, Al Kandari added.
"It's really a shame because Morocco could be our gateway to the African markets but if we try to ship food it would rot by the time it reaches the destination due to the bad infrastructure."
Other rules such as the employment of Moroccan nationals in new projects is also seen as a set back to some Gulf Arab investors. "The minimum wage for a Moroccan is much higher than say someone from Asia, so this is another factor than is keeping gulf investors from expanding here," he added.
In terms of the banking sector, lack of a legal framework that would guarantee the rights of institution are keeping large gulf financial firms away, said Ali Hamad Al-Mesaifri, first executive manger of Qatar International Bank.
"There is a reason why Gulf banks are not present in Morocco, it's because the country still lacks the legal framework we need to operate in," he said, adding that the financial crisis has put many banks' expansion plans on hold.
The economic slowdown had also caused Gulf Arab investors to think twice about new ventures as their liquidity levels shrunk, said Mohamed bin Brahim Al Touijri, assistant secretary general for economic affairs at The Arab League.
"Short term, high return investments is what many Gulf investors are seeking and that's why they are not that interested in Morocco because most of the projects here have to be long term," said Al Touijri.
He added that even investments in tourism are seen as low return as the kingdom mainly attract visitors from Europe who are seen to be low spenders compared to Arab tourists.
"That's why we are seeing that many of the Gulf Arab tourism projects here are being cancelled or put on hold ... it's just not worth it for the investors at this point.
Morocco has an investment grade rating of BBB- from ratings agency Fitch, but sub-investment grade ratings from Moody's and Standard & Poor's. (Reuters)