Rising in the east: The region aims to establish a dynamic, self-sufficient economy

The landscape of Morocco’s easternmost region, known as the Oriental, is vastly different than it was a decade ago, thanks to an overarching economic development initiative launched in 2003. The region has a number of advantages, with Mediterranean coastline, a fertile agricultural environment in the north, diverse topography and a young population. Yet it grappled with underinvestment until the late 1990s, as development efforts focused on Morocco’s economic and administrative centres in Casablanca and Rabat.

Several factors – including the Oriental’s traditional economic dependence on markets in Algeria and Southern Europe, distance from population centres on the Atlantic coast and an insufficient transport network – contributed to disconnect the region from national development efforts until recently.

NEW FOCUS: Efforts to integrate underserved regions have multiplied in the last two decades. The 2003-13 royal initiative, the region’s 10-year economic development programme introduced by King Mohammed VI in March 2003, has transformed the Oriental’s economic orientation, placing a strong emphasis on local industry, value-added agricultural production, application of new technologies and a reduction in economic reliance on Algeria. The region still has a number of hurdles to overcome, but it is nonetheless well positioned to see a significant increase in growth.

The Oriental region covers 82,820 sq km, 11.6% of the kingdom’s total area, in Morocco’s north-eastern corner. It is bordered in the north by 200 km of Mediterranean coastline, to the east and south by its 550-km shared border with Algeria, and by the Taza-Al Hoceima-Taounate region to the west. The Spanish exclave of Melilla carves out a niche on the Mediterranean coast near the main regional port of Nador.

The northern provinces have a mild Mediterranean climate well adapted to agriculture, particularly Berkane and Nador, where rainfall averages 350 mm per year. The climate becomes more arid in the south toward the Sahara Desert. Southern provinces were traditionally dominated by mining activity, which has since declined, but the Figuig oasis and desert zones nonetheless offer interesting potential for tourism, and irrigation programmes have strengthened agricultural output. The region comprises one prefecture, Oujda-Angad, and six provinces: Nador, Driouch, Berkane, Taourirt, Jerada and Figuig. These include a total of 27 urban communes and 87 rural communes.

POPULATION: The region had 2.02m inhabitants in 2013, accounting for 6.2% of the national total. Around 80% of the population is concentrated in the northern provinces, and population density is low in the semiarid and arid southern provinces. Roughly one-quarter of residents live in the regional capital, Oujda.

Decades of economic strain sparked a rural exodus and international migration flows that continue to have an impact on the economy. According to the High Planning Commission (Haut-Commissariat au Plan, HCP), around one-third of Moroccans living abroad originate from the Oriental region. The causes of this are many. The regional economy has traditionally relied on agriculture, commerce, small-scale industry and mining. But in the 1960s local mining activity dried up, causing unemployment to spike. In 1994 the Moroccan-Algerian border was closed following rising tension with Algeria. The closure cut off a major source of business activity in the Oriental, pushing vendors into the informal sector, and contraband activity rose.

Much effort has been expended in recent years to address long-standing challenges, but there is still work to be done. Regional unemployment, for example, has declined slightly in the last five years, from 18.2% in 2009 to 15.9% in 2013. Yet unemployment in urban areas remains as high as 20%, according to HCP figures.

ROYAL INITIATIVE: In March 2003 King Mohammed VI introduced the region’s 10-year economic programme, which galvanised efforts to develop the economy and brought considerable public resources to bear. The regional strategy outlined a comprehensive vision for economic growth, and the progress made over the last decade has been remarkable. Among the more prominent results of the government’s strategy was the formation of a regional agency, l’Agence de l’Oriental, which was established in 2006 to advance the initiative, engaging with foreign investors and development partners, and channelling funds into targeted sectors. Other key stakeholders include the Regional Council; the Regional Investment Centre, which works with investors to facilitate new projects; and the Chamber of Commerce and Industry, which represents local business interests and seeks to encourage national and international partnerships. All are based in Oujda, the region’s largest city and its commercial centre.

In the last decade public investment has focused on developing infrastructure to boost economic activity. Since 2003 the region’s road, airport and rail infrastructure has been upgraded, reducing transport costs and increasing the region’s attractiveness. Efforts have also focused on developing sectors with the greatest potential to draw private investment, including industry and agro-industry, offshoring, renewable energy, tourism and services. Several projects that are currently under way should create value-added activity that will boost revenues and stimulate job creation.

AIR CONNECTIONS: The spate of investment in capital infrastructure has had a dramatic impact. While some bottlenecks remain, the region’s transport infrastructure has been overhauled under the royal initiative, opening up a number of new avenues for growth.

The province has two international airports and one smaller airfield in the southern town of Bouarfa. The new Angads Airport, situated 10 km from Oujda and built with a public investment of €88m, was inaugurated in 2010. The facility was equipped with a second, 30,000-sq-metre terminal and two runways capable of receiving commercial aircraft, bringing Oujda’s total annual capacity to 3m passengers. Traffic flows are currently between 600,000 and 700,000 passengers per year, which leaves ample room for growth.

Nador International Airport, which is located 24 km south of the port town of Nador, has an annual capacity of 750,000 passengers and offers several daily connections to destinations throughout Europe. Finally, Bouarfa Airport in the south reduces travel times from Oujda from a four-hour drive to a quick flight. Frequency is limited, but the link should help open up access to the desert oasis of Figuig, a high-potential site for the development of rural and niche tourism.

LAND ROUTES: The road network received particular focus under the regional initiative, in an effort to reduce the area’s isolation. A 320-km extension of the main east-west highway from Fez to Oujda was completed in 2011, reducing travel time to Rabat from seven to four-and-a-half hours. The Fez-Oujda segment was built in four years at a cost of Dh10.8bn (€959m), with support from several international partners.

A 510-km coastal highway, the Rocade Mé diterranéenne, reduced travel time from Saïdia to Tangiers from 11 to seven hours when it was completed in 2012. This opened up access to towns and ports along the Mediterranean coast, which has an impact on trade, agriculture and tourism. The route is expected to continue driving activity both in the industrial area of the north and the tourist attractions further east.

A great deal of work has been carried out to improve feeder provincial and rural roads in the last decade, and the region’s road network now measures around 6000 km. Three ongoing projects stand to further improve connectivity. The 102-km road between Oujda and the region’s main port city, Nador, is being expanded to an express road, with two lanes in either direction. Work was approximately 50% complete as of early 2014. An 83-km stretch of national highway is also being expanded between Ahfir and Selouane, the location of one of the region’s new industrial parks, and a 14-km ring road is being constructed around Berkane, in order to reduce congestion in this provincial capital.

Morocco also plans to complete studies in 2014 for a highway connection between Oujda and the Algerian border. This would link the two countries’ highway networks and encourage North African trade, which remains quite limited. Transport costs are particularly high in the Oriental region, as energy products need to be shipped in from elsewhere in the country. Many companies relied on cheaper Algerian petrol, which can be as little as one-third the price of local petrol.

INFORMAL ECONOMY: However, the government has taken steps over the past year or so to reinforce its border with Algeria and stop the flow of contraband goods into Morocco. These efforts should ultimately reduce the impact of the informal economy in the east, but they will also mean higher transport costs for local businesses for the foreseeable future.

The ingrained nature of the informal economy undermines the development of formal retail, and makes it difficult for small and medium-sized enterprises (SMEs) to compete with larger, more established firms. The closure of the border with Algeria affected nearly every sector of the local economy. In the long term, the Oriental is well positioned to play a key role in intra-Maghreb trade, which today represents a small fraction of Morocco’s external trade.

ON THE RAILS: The region is also looking to improve its rail connectivity. Oujda is currently served by the main east-west railway. In 2008 a new 117-km railway between Nador and Taourirt was inaugurated by Office National des Chemins de Fer (ONCF), helping to open up the province, facilitate access to mining regions and improve transport of Taourirt’s agricultural output to port.

There are also smaller rail spurs that provide opportunities for development, and the region has a 350-km railway between Oujda and Bouarfa. Moroccan travel firm Suprateam conducted successful tests to transform the line into a 700-passenger tourism circuit, and the project is being shopped around to investors.

Morocco is putting in place its first high-speed train line, the Ligne de Grande Vitesse (LGV), which should boost rail travel nationwide. The initial phase, connecting Casablanca and Tangiers along the Atlantic coast, will not impact the Oriental region, but the ONCF plans to launch a second LGV line to connect Casablanca and Rabat to Oujda. This is a long-term project, but should help to connect the Oriental region to the national network and create possibilities for future connections with other countries in the Maghreb.

PORT INFRASTRUCTURE: The Oriental is also seeing major investment in the maritime sector. The region’s main port, Nador-Beni Ensar, was built in 1978 to serve the Oriental region and, in particular, the Sonasid steel manufacturing complex in Nador. The port has facilities for bulk cargo, fishing, and ferry services for passengers and international road transport. Regular routes connect Nador to Almeria, in Spain and Sète, in France. A total of 598,710 passengers passed through in 2011, as well as 2.5m tonnes of freight. There are moves afoot to create a new large-scale facility; the Nador West Med port offers the potential to increase the Oriental’s capacity to attract Mediterranean trade. A public tender was launched in March 2014 to conduct a feasibility study on the port, which should help to advance the project by the end of 2014 (see analysis).

AGRICULTURE: Agriculture has always been a pillar of the regional economy, but the authorities have so far struggled to harness the region’s potential and capture value locally. The Oriental has 730,744 ha of cultivated land, primarily in the northern provinces of Berkane and Nador. The sector is dominated by small-scale farmers; over 60% of farms operate on less than five ha. According to the Regional Agriculture Department (Direction Régionale de l’Agriculture, DRA), the Oriental produces around 20% of national citrus output, up from 12% in 2010, and 13% of its olives (see analysis).

The region is slated to receive a total of 77 projects under the national agriculture development strategy, the Green Morocco Plan (Plan Maroc Vert, PMV). The PMV aims to complete 1506 projects between 2010 and 2020 for a total public and private investment of Dh147bn (€13.1bn). The Oriental faces many of the same challenges as the rest of the country, such as low levels of aggregation, mechanisation and irrigation.

Regional authorities confirm that encouragement of aggregation and the spread of modern techniques, including the use of fertilisers, localised irrigation and machinery, are beginning to pay off. Jamal Mimouni, communication director at the Oriental DRA, said, “Efforts to expand farming collectives and introduce more resource-efficient techniques under the PMV have made an impact in the last three years. Farmers are beginning to strengthen their organisation and invest in local cooperatives, which has helped to boost output of key crops and gain visibility for local producers.”

The vast majority of agro-industrial production, particularly citrus fruits, olives and dates, is exported to Europe, and occasionally as far afield as Russia and North America. A sizeable amount of overall production is channelled to the domestic market, however, which is largely dominated by small-scale retailers.

INDUSTRIAL PARKS: The sector is limited by the low level of local value-added processing. To this end, a project is under way to develop a 100-ha agro-industrial park, or agropole, in Berkane. The agropole is one of three parks that are expected to attract private investment into high-multiplier sectors (see analysis). It is expected to revolutionise the sector by providing sufficient space, proximity to support and packaging services, and aid from three laboratories dedicated to quality control, research and development.

Two other industrial parks are being developed to attract industrial, services and logistics firms (see analysis). The most advanced project, Oujda Technopole, consists of an initial 107-ha site dedicated to clean technology, renewable energy, retail and offshoring. A third site is being developed in Selouane, near the port of Nador, and is set to accommodate a variety of light processing industries. Commercialisation of Oujda Technopole began in 2013. So far, 34 firms have committed to set up in the park, and two retail projects are expected to begin operations in 2014. Selouane was commercialised in early 2014, and a dozen firms have shown interest in moving into the zone. In their initial phase, all three parks will be geared towards local firms.

Crucially, the zones will help diversify local industrial activity into higher-revenue areas; so far it has been dominated by construction materials, agro-industry and the now-stagnant mining sector. Minerals remain the primary export from the port of Nador, including 497,000 tonnes of minerals such as barite, bentonite and clay and 31,000 tonnes of metallic lead in 2011. Regional authorities contend that there is potential for the development of lead, zinc, silver and manganese resources, and are working to encourage private exploration. New projects, including the construction of an open-air museum and 318-MW thermal power plant, are planned to increase local employment opportunities in Jerada, the region’s historic mining centre.

One of the most prominent sub-sectors in the Oriental’s industrial sector has been building materials. Nador has long been a centre for the brick-making industry and now includes over 23 local firms. The sector is largely made up of SMEs, with notable exceptions such as the Moroccan steel maker Sonasid and Swissowned cement producer Holcim. Locally produced construction materials are generally destined for use in the Oriental region, and cater mainly to local projects.

Under the National Pact for Industrial Emergence, Morocco aims to create 220,000 new sector jobs by 2015, and adding Dh50bn (€4.4bn) to GDP and Dh95bn (€8.4bn) to export revenues through the growth of local industries. Casablanca and Tangiers-Tétouan have emerged as the two leading centres for industrial production, with growing specialisation in the automotive, aeronautics and electronics sectors.

DRAWING INVESTMENT: The authorities hope that the three industrial zones will attract high levels of foreign direct investment (FDI). However, they will face stiff competition from parks such as the Tangiers Free Zone, Kénitra’s Atlantic Free Zone and Casablanca’s Midparc, all of which have free zone status. Free zones are subject to specific legal and fiscal requirements, which include a standard slate of incentives, including a five-year corporate tax exemption followed by a 20-year reduced tax rate of 8.75%, exemption from value-added tax and Customs duties, and freedom from foreign currency restrictions. The Oriental’s industrial zones do not offer free zone status, with the exception of the 40-ha clean tech zone within Oujda Technopole. The local authorities are free to set the conditions for the zones, and they do offer several incentives, although not on a par with those available in free zones.

The region has not yet seen the expected return on its investment in infrastructure and industrial capacity. The combined effects of the domestic liquidity shortage and the eurozone crisis have strained the private investment market. Reduced prices for land in industrial zones or additional fiscal incentives could help to draw more private groups to the zones and help to distinguish the Oriental from other regions.

Nonetheless, the Oriental has its own competitive advantages, including a large, qualified workforce, strong higher education and professional training institutions, an abundance of available land, and a commitment by local authorities to quickly process requests to start a new business, seek financial support, or obtain permits and other documentation.

POWER GRID: Utilities infrastructure has also been targeted for an overhaul in recent years, to help expand power capacity and ensure ample electricity for the region’s industrial zones, which are expected to increase consumption in the years to come.

China’s Shandong Electric Power Construction Corporation was awarded a Dh3bn (€266m) contract in July 2013 to build a 318-MW extension to the existing coal-fired power plant in Jerada. This is the first major energy project by a Chinese company in Morocco; the project will be financed by China’s Exim Bank and is set to come on-line before the end of 2016. The existing 165-MW plant used to be supplied by locally mined coal from Charbonnage du Maroc before the closure of the mines. The current and future plants are supplied by steam coal and pet coke imported from the port of Nador. The project should create an additional 4000 jobs in the province during the construction phase.

RENEWABLES: The Jerada plant will provide a sizeable boost in terms of regional energy production in the medium term. However, on the whole the region is currently shifting its focus toward clean technology and renewable energy. The Oriental opened the country’s first combined thermal and solar power plant in Ain Bni Mathar in 2010. The station has an installed capacity of 450 MW from a natural gas combined-cycle plant, which is supplied by gas from Algeria’s Maghreb-Europe pipeline. Today, the plant meets approximately 10% of national power demand. Another 20 MW is generated from solar panels, for a total capacity of 470 MW.

A handful of pilot projects in the field of solar energy have been launched in recent years, most notably to introduce solar-powered water pumping stations for agriculture, which have experienced success on a small scale. The Oriental region has sizeable solar resources, and Ain Bni Mathar is one of five locations selected nationwide to receive major solar power projects under the Moroccan Solar Plan, which aims to create 2000 MW of solar capacity nationwide by 2020.

A clean tech zone in Oujda Technopole intends to attract renewable energy, energy efficiency and eco-friendly firms, to set up assembly plants and, eventually, conduct research and development. While concrete measures have yet to be announced, the attraction of foreign renewable energy firms is expected to have a direct impact on the local industrial sector, in terms of sourcing materials locally or installing assembly plants.

CONSTRUCTION: Significant public investment in infrastructure over the last decade has benefitted companies throughout the construction, public works and building materials sectors.

The construction industry, particularly for public contracts, is led by Oriental-based firms such as Houar, Bioui and Société D&CRB. Competition between local firms has become increasingly tough in recent years, pushing bids down and eating into profits. The industry will continue to benefit from a series of urban renewal and road building projects in the short term, albeit at a slower pace than the intense building period of 2005-12. A potential royal visit planned for June 2014 may help set expectations for the next round of public investment in the region. Construction activity has, as elsewhere in Morocco, also been affected by broader macroeconomic pressures, including spillover from the eurozone crisis, which relaxed demand for exports, slowed growth in tourism arrivals and made obtaining financing more difficult due to tight liquidity.

Lingering issues – such as the lengthy payment process for public contracts – have also constrained sector growth, making it more difficult for smaller companies to reinvest in new projects. However, legislation passed in 2013 puts a 60- to 90-day deadline on the payment of both public and private contracts, which should reduce the burden on smaller firms.

In the short term, private investment projects – particularly those in housing and hospitality – will carry the sector forward. Housing construction has picked up in the last three years as developers anticipate an uptick in economic activity and employment in the Oriental region. In 2007 the state-owned developer Al Omrane established a regional subsidiary in Oujda, charged with reducing the amount of irregular and unsafe housing, building low-cost housing and supporting urban renewal programmes.

A convention relating to the third tranche of public land made available to developers, signed in February 2008, provided Al Omrane with a total area of 958 ha in the Oriental region. The agency has reportedly built 2090 of a total of 4537 low-cost housing units, the price of which is capped at €12,400. Nearly 1300 of 9535 social housing units have been built so far, with a price tag of €22,200 each. Finally, Al Omrane plans to build 650 affordable homes in the region as demand rises.

The nationwide plan to remove shantytowns targeted 12 towns and cities in the Oriental, with 10 cities so far declared shantytown-free, and work ongoing in Berkane and Touissit. In the future, priority will be given to efforts to address a 250-ha area of housing units that are deemed to be poorly constructed, vulnerable to flooding or otherwise unsafe.

URBAN RENEWAL: The burst of activity in housing is also, in part, a result of a shift in urban planning. A major component of the regional development strategy is focused on urban renewal projects that aim to improve ageing infrastructure and boost Oujda’s standing as a centre for economic activity and investment. Oujda is undergoing a €222m project to overhaul the city centre from 2010-19, Oujda Urba Pôle. The scheme is being developed by Compagnie Générale Immobilière, a subsidiary of CDG Développement, in partnership with the regional government and the ONCF.

The project will redevelop a 30-ha area of the capital in four stages. The first stage, completed in late 2013, saw the construction of an integrated residential, commercial and business zone on a 4.7-ha plot adjacent to the train station. This required public and private investment of €31m, and the residential and office space is now being commercialised. In the next five years the project includes plans to build a station just outside the city centre, redevelop the historic train station as a museum, and turn the unused freight zone adjacent to the existing station into a park, a shopping centre and a private residential area (see analysis).

TOURISM: As part of the region’s efforts to expand and diversify economic activity, a strong emphasis has been placed on the tourism industry. The region has prime waterfront real estate, unspoiled desert and an attractive climate. The Oriental had 8750 hotel beds in 2013, of which 3170 are located in the Saïdia beach resort.

The national tourism strategy, Vision 2020, set the goal of increasing the country’s hotel bed capacity to 375,000 by 2020. Morocco’s hospitality industry has expanded in recent years, but the pace of building will need to be accelerated if this goal is to be met. The Regional Tourism Delegation is working on developing the sector at several levels, including large-scale, luxury beach resorts, as well as rural and niche tourism circuits that aim to harness the region’s natural resources and create employment opportunities across several provinces. The seaside tourism industry has the most near-term potential in terms of FDI and employment.

The sector is anchored by the resort of Saïdia, a large government-backed project being developed on a 700-ha lot 60 km north of Oujda. The first resort to be launched under Plan Azur, it has bold goals: it aims to include nine hotels, a 1350-berth recreational marina, three 18-hole golf courses, a convention centre, and commercial, residential and office space. Three hotels have opened so far: Hôtel Belive, Hôtel Oriental Bay and Hôtel Iberostar, for a total capacity of 3170 beds.

Spanish group Meliá signed an agreement in February 2014 to build the next three hotels on the site – an important step as progress has slowed in recent years, with funding drying up and international arrivals slowing as a result of the economic crisis in Europe (see analysis). “By 2017 we expect the hotel capacity at Saïdia to have reached a sufficient size where we should begin to see a rise in international visitor numbers,” Hatim Zaki, the deputy managing director of Société de Dé veloppement Saïdia, told OBG.

Another seaside resort project, Marchica, aims to redevelop 4000 ha at the Marchica lagoon near Nador. The plans include seven eco-friendly towns, a golf course, hotels and residential villas. Marchica will take a more small-scale, environmentally focused approach than Saïdia, with the intention of developing ecotourism in a setting that simultaneously protects and promotes the coastal environment. Said Zarrou, the managing director of Marchica Development Agency, told OBG, “Within the framework of the Marchica development plan, and as a consequence of the creation of the new port of Nador Med West, the Beni Anfar harbour will be integrated into the city alongside strategic developments of mixed-use buildings and new facilities.”

SKILLS TRAINING: The Oriental’s tertiary education sector is relatively well funded – particularly over the past decade, following the launch of the regional development strategy – and benefits from significant capacity, allowing it to accommodate a large student body.

The main regional university, Université Mohammed Premier, has 45,000 students across its three campuses. Around 30,000 of these are concentrated on the main campus in Oujda, with the rest in satellite campuses in Nador and Al Hoceima. The latter is technically in the Taza-Al Hoceima-Taounate region.

Crucially, the university has taken strides in recent years to align its offerings with the demands of the evolving labour market in the region – a key push occurring across the board in Morocco, as the government looks to bring down unemployment rates and increase technical and vocational training. As a result, the university is strengthening its programmes in sectors such as agro-industry, engineering, renewable energy and business management. “We are working to anticipate the evolution of the economy and the education system in the Oriental region,” the university’s president, Abdelaziz Sadok, told OBG. “University governance has been reformed to create more effective, nimble oversight of our programmes, and we are expanding degree offerings in sectors that are likely to drive regional economic growth in the future.” Université Mohammed Premier is also working to establish new campuses near the region’s three industrial zones, in order to provide students direct contact with employers (see analysis).

Oujda Technopole has set aside an area, the Campus du Savoir, which will house a satellite campus of Université Mohammed Premier dedicated to new technologies, renewable energy, offshoring and related industries. The Campus du Savoir will also include a professional training centre of the Office of Vocational Training and Employment Promotion. The university aims to establish campuses in Berkane and Nador, and it is considering plans for a tourism campus in Saïdia.

The regional education budget has quadrupled since the launch of the royal initiative in 2003, driven by projects to build 70 new establishments at all levels. Ongoing urban development programmes in Oujda are aimed at increasing the number of primary schools in order to ensure a stronger base for the education system.

HEALTH: The government has also been working to improve the region’s health indicators, with some success. Under the Oujda Urba Pôle project, the Oriental’s health care system received major upgrades under the royal initiative. A 660-bed University Hospital Centre (Centre Hôpitalier Universitaire, CHU) was constructed in the capital, equipped with an oncology centre and a psychiatric hospital. The CHU has yet to be fully supplied and staffed, but is expected to be officially inaugurated during King Mohammed VI’s next visit to the region in June 2014. Another new hospital, expected to be inaugurated soon in Saïdia, will improve access to health care in the town and in the nearby resort.

In addition, Oujda is now the location of the Oriental’s first medical school, which entered into operation in 2009. The first class of medical students will graduate in the summer of 2014. The school will be able to accommodate 400 students per year, for a maximum capacity of 2800 students and interns, which will help meet the region’s demand for specialised personnel.

COMMERCE: The region also implemented several projects under the national Plan Rawaj, which aims to restructure the retail sector and raise its contribution to GDP to 12.5% by 2020, by encouraging modern commercial and distribution networks. The plan helped finance the refurbishment of 2200 points of sale in the region between 2008 and 2012. According to local officials, the region now ranks fifth nationwide in terms of its commercial surface area, with 28 points of sale per 1000 inhabitants. Souks and public markets are still some of the most important retail spaces in the region, but large-scale retailers have expanded into the main population centres of Oujda, Nador and Berkane in recent years. Oujda Urba Pôle will bring new commercial space to the market, while Oujda Technopole includes a 20-ha commercial platform, Retail Park, which aims to attract both foreign and domestic chains.

OUTLOOK: Local and national authorities have made extensive efforts to strengthen the regional business environment to boost local economic production, create employment, attract foreign investment and raise the standard of living. Over the last decade the royal initiative has led to a dramatic turnaround for the region. The authorities still have a long way to go to reduce the role of the informal economy and support the growth of local SMEs, and there are questions over competitiveness. However, with improved infrastructure, new turnkey zones for potential investors, and a spate of investments in the service and social sectors, the scope for growth in the Oriental region is significant.