Morroco's official trade data has never made mention of Israel (MEE/Freepik.com)
"Secret" business between Israel and Morocco is increasingly visible, despite the North African country sharing no official diplomatic relations with Israel and rising domestic political opposition to stronger ties with Israel.
Many Moroccan and Israeli companies are resorting to increasingly complex commercial channels
– French-Israeli Chamber of Commerce
Recent statistical discrepancies are a good start. Although Moroccos official trade data has never made mention of Israel whatsoever, Israeli records shows $37m worth of commerce with Morocco in 2017, according to data released by the Israeli Central Bureau of Statistics (CBS) this year.
This means that, out of Israels 22 African trading partners, Morocco is among the four top nations from which it imports, and ninth in terms of exports, according to CBS. However, with $149m worth of trade between 2014 and 2017, this partnership is not new.
More unusual is Israels first overt foreign investment into the Arab world, with Israeli agricultural technology giant Netafim setting up a $2.9m subsidiary in Morocco last year, thereby creating 17 jobs, according to fDi Markets, a Financial Times data service that has monitored crossborder greenfield investment worldwide since 2003. Greenfield investment is when a company builds its operations in a foreign country from the ground up.
This development may fit into broader regional trends. “Arab-Israel relations [are improving] in light of Iran…The Israelis are trying to get closer to some Arab governments…so in the future, there may be more public investments from Israel like [that of Netafim],” said Adel Abdel Ghafar, a fellow at the Brookings Doha Center.
Long-standing ties
Netafims investment is the most visible example of the longstanding and "clandestine" economic ties between Israel and Morocco, two countries that have shared historically warm ties compared to other Arab-Israeli relations.
“However, Moroccan-Israeli ties [remain] a secretive issue and the Moroccan government tries to keep them under wraps because of public pressure [against Israel]”, said Ghafar.
For example, in 2016, government ministers denied any trade or investment links with Israel. Mohamed Abbou, then the head of foreign trade at the Ministry of Industry, Trade, Investment and the Digital Economy, told parliament: “Morocco has no commercial relations with this entity [Israel] . . . and is keen to fight the entry of all Israeli goods to Morocco."
“The government has never granted any license for anyone to import dates or any other Israeli products,” he added.
This is despite the fact that Israels Netafim has operated in Morocco since at least 1994 through an affiliate, Regafim. Today, under its own name, its Moroccan Facebook page currently has more than 26,000 likes.
Netafim's Facebook page (Screenshot)
Founded on an Israeli kibbutz in 1965, Netafim is the global leader in drip-irrigation systems, a technology that it pioneered. According to its website, it has 4,300 employees and provides equipment and services to customers in more than 110 countries.
In February, the company sold 80 percent of its shares to Mexichem, a Mexican petrochemicals group, for $1.5bn. Kibbutz Hatzerim retains 20 percent and Netafim remains headquartered in Israel.
“The opening of the new subsidiary [in Morocco] is part of growth in the market and our desire to improve the quality of our service and our assistance to our customers and partners in Morocco,” Shavit Dahan, Netafims director for North and West Africa, told the French-Israeli Chamber of Commerce. The company declined further requests to comment on its investment in Morocco.
The unabashed visibility of Netafims investment is unusual since most Israeli-Moroccan trade appears to be conducted secretly. According to Ghafar: “Theres not much information out there. You wont find many company records [of Israeli trade or businesses in Morocco].”
Much business, he said, is done indirectly, through companies in France, for example. “You could be dealing with an intermediary, especially when there is funding and equipment.”
The French-Israeli Chamber of Commerce noted last year that “many Moroccan and Israeli companies are resorting to increasingly complex commercial channels… The Israeli media regularly reports the signing of trade agreements, financial transactions or co-operation programmes with government authorities or the private sector… The most visible Israeli-Moroccan experience is that of Netafim”.
HIstoric links
Although the Moroccan authorities downplay any ties, commercial links in agriculture, the military and technology have existed for decades, Ghafar noted, as have cultural and people-to-people ties. “Morocco is one of the most progressive Arab countries with regards to its Jewish population," he said.
A quarter of a million Jews once lived in Morocco, which is still home to the largest Jewish community in the Arab world. While only about 2,000 remain today, Israels large population of Moroccan Jews forms a natural link between the two countries, said Bruce Maddy-Weitzman, an expert on Moroccan-Israeli relations at Tel Aviv University. Moroccans are frequent participants at Israeli agricultural high-tech fairs, and thousands of Israeli tourists visit Morocco every year, he added.
'Until the Jerusalem incident, trade and business links between Israel and Morocco were a question of discretion'
– Claire Spencer, Chatham House
According to Claire Spencer, senior research fellow at Chatham Houses Middle East and North Africa Programme, “Morocco values its international Jewish connections. It must be the only Arab state to have a roving ambassador for Jewish affairs, Serge Berdugo, and specifically mentions its Hebrew heritage in the revised 2011 constitution.”
She also pointed to the rise of Israeli politicians and business leaders of Moroccan descent, such as Avi Gabbay, leader of the Israeli Labor Party.
However, Moroccan politics remain divided over their relationship with Israel. Ghafar explains how the countrys Arab nationalist, conservative and Islamist elements – such as the Justice and Development Party (PJD), which lead the government – highly disapprove of such relations, which are fostered, in the main, by King Mohammed VI and his advisers. Earlier this year, Crown Prince Moulay Hassan was reportedly given a Gulfstream G650, equipped with $20bn worth of Israeli technology.
Indeed, Netafims presence in Morocco provoked a small-scale demonstration at an agricultural fair in Rabat, in October 2017, during which four members of BDS – the Boycott, Divestment and Sanctions Movement against the Israeli occupation of Palestine – were arrested after peacefully protesting against the companys presence at the fair and in Morocco. Exactly a year later, protestors returned to the fair, this time causing Netafim to exit the event.
Moroccan-Israeli relations have been a source of growing contention in Morocco in recent years. In 2014, at the time of Israel's assault of the Gaza Strip that left more than 2,200 dead, five political parties called for a bill that would criminalise “normalisation with Israel”.
Not yet passed into law, members of the Moroccan parliament called for the reactivation of said bill following US President Donald Trumps announcement to move the US embassy to Jerusalem last December.
The complexity and divisions surrounding relations between the two countries were evident even as the US embassy building opened in Jerusalem in May. An estimated 10,000 Moroccans protested in Casablanca in late May following the opening of the embassy and an Israeli military crackdown on protests in Gaza that left scores dead.
Two weeks later, a delegation of Moroccan businesspeople and others went to Israel to meet lawmakers in the Knesset and other officials.
“Until the Jerusalem incident, trade and business links between Israel and Morocco were a question of discretion,” said Spencer. Now, she adds, they face an outright ban.
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