Double-edged

In 2011-12, the GCC approved allocating $5 billion in funding for development projects to Morocco, over five years. This has contributed significantly to Moroccan fiscal and external revenues. Analysts say no agreement on new grants has been announced yet. The absence of renewed GCC support would have an adverse impact on Morocco’s external and fiscal position.

While GCC support is seen as fiscal and external cushion for the beneficiaries, S&P analysts say that sometimes, it may even be a disincentive to structural reforms. Moreover, the extension of bilateral financial support can be unpredictable and conditional upon political agreements.