Contents -- Acknowledgments -- Acronyms and Abbreviations -- Executive Summary -- Volume I-Synthesis -- 1. Motivation -- 2. Morocco's Low Growth Rates in Historical Perspective -- 3. Stylized Facts About Morocco's Growth -- 4. The Binding Constraints to Growth in Morocco -- First Step: The Close Relationship Between Export Diversification, Self Discovery, and Growth -- Second Step (Part A): Identifying Government Failures That Limit Productive Diversification and Competitiveness -- Second Step (Part B): Identifying Market Failures That Limit Productive Diversification -- How Governance Issues Might Indirectly Relate to Binding Constraints -- 5. How Do Morocco's Obstacles to the Business Environment Affect Productive Diversification? -- 6. Reducing Anti-Export Bias to Foster Diversification and Export Growth -- 7. Labor Rigidities and Employment Creation -- 8. The Need for a New Growth Strategy -- 9. The Vision of a New Pact for Growth and Employment: Policy Proposals for Productive Diversification -- References -- TABLES -- 1. Growth Decomposition for the Whole Economy (in percent) -- 2. Morocco and Some Competitors: Selected Indicators on the Corporate Income Tax Regime -- 3. Morocco's Performance in the Knowledge Economy Index -- 4. Structural Changes in Morocco's Textile and Clothing Exports, 1995-2004 -- 5. Growth Strategies Followed in East Asia and Chile: Were They That Different? -- 6. Toward A New Pact for Growth and Employment in Morocco. Matrix of Priority Policies and Actions -- FIGURES -- 1. Volatility of Real GDP Growth (in percent) -- 2. No Convergence Across the Strait of Gibraltar or with Turkey -- 3. China Caught Up with Morocco Income Per Capita in PPP 2000 Dollars -- 4. Comparator: The World (Maddison Data) -- 5. Growth of Components of Real Demand -- 6. National Savings and Investment Rates (in percent of GDP).

7. Growth Diagnostic: Decision Tree on the Main Constraints to Growth -- 8. Credit Availability is Relatively High -- 9. Sectoral Shares in Total FDI -- 10. Morocco's Country Risk (Basis Points) -- 11. Secondary School Enrollment and Per Capita Income (2001-WDI, 2005) -- 12. Governance and Per Capita Incomes in MENA -- 13. Constant Market Share, Morocco and Others 1998-2003 -- 14. Percentage Share of Engineering and other High Value-added Manufactured Products in Total Exports -- 15. Sophistication of Exports and Income Per Capita -- 16. Comparing Discoveries between Morocco and its Main Competitors -- 17. Morocco's Marginal Tax Rates on Individuals: An International Perspective -- 18. Labor Market, Real Exchange Rate, and the External and Internal Balances -- 19. OTRI and GDP per capita in PPP2000 US-Tariffs and NTBs -- 20. Nominal and Effective Rates of Protection (percent) -- 21. Progress of Call Centers in Morocco -- 22. Francophone Call Centers in a Few Countries -- 23. Sectors, Regions, and Types of Enterprises: Highly Diverse Perceptions of Constraints -- 24. What Firms Are Really Out of the Credit Market -- 25. Constraints of Access to Land-International Comparisons from ICAs -- 26. Access to Real Estate, Type of Enterprise, and Region -- 27. Moroccan Exports Lag Behind Those of its Main Comparator Countries -- 28. Morocco's Exports versus Spain and France's Imports, Growth Rate, %, 1962-2004 -- 29. Real Effective Exchange Rate in Chile and Morocco -- 30. Unweighted Average Tariffs in Morocco and Chile -- 31. Morocco's Multiple, Overlapping Trade Agreements -- 32. Impact of the MFA Removal on Moroccan Exports to the EU and US Markets -- 33. Urbanization Rate (%) and Rural Population (in millions) -- 34. Growth in Rural Population and Income Per Capita (in logs) -- 35. Value-added per Worker and Average Wages in Manufacturing (ICA 2004).

36. Real Wage Rates for Selected Sectors (in thousands MAD per year) -- 37. MW: Effective and Adjusted to Productivity Gains (Index Base Year: 1984=100) -- BOXES -- 1. The Need for an Update of the National Accounts System -- 2. The Emergence Program -- 3. Binding Constraints to Growth -- 4. How Do Diagnostics on Identified Constraints to Growth Compare to Those Found by the Emergence Program -- 5. Applying Rodrik's Ten Principles to a Productive Diversification Policy in Morocco -- 6. Recent Employment Measures of the Government.