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172 CHAPTER 7


among the nonpoor). Poverty is heavily concentrated in the central and north- western regions (World Bank 2001).


At the national level, the distribution of the poor by sector of activity of the head of household shows that most of the poor work in the agricultural sector (57 percent), followed by services (26 percent) and construction (13 percent). In urban areas, among 58 percent of the poor the breadwinner is working in services, while in rural areas, agriculture is the dominant source of income among 75 percent of the poor.


Because of the dynamics of urbanization in Morocco, the structural causes of urban and rural poverty are closely related. Poor rural households engaged in productive activities typically have access to agricultural land, but their landholdings are small, rarely irrigated, and less productive. Moreover, due to a lack of land titles and registration, they cannot obtain formal credit and invest in their property. They often have nonagricultural sources of income, working in the informal sector and moving back and forth throughout the year between rural and urban areas. The urban poor face multiple deprivations such as lack of employment and inadequacy of access to land, housing, and basic services.


The Impact of Trade Liberalization on the Poor


In this section, we examine the impact of trade liberalization on the rural poor in Morocco. First we discuss the issues and describe the results of an earlier study that simulated the distributional impact of wheat import liber- alization. Then we describe the methods and findings of a new analysis with a CGE model that has been used to study the impact of various types of trade liberalization on the Moroccan economy. Although the model does not simu- late the impact on different types of households, it does simulate the impact on the returns to four types of labor, including unskilled agricultural labor. Because small-scale farmers earn most of their income from unskilled agricul- tural labor (including labor allocated to production on their own farms), this is a close approximation of the impact of trade liberalization on small-scale, low-income farmers in Morocco (this analysis is described in more detail in Thomas et al. 2008).


Background


In Morocco, as in most developing countries, policymakers and researchers are concerned about the possible impact of agricultural trade liberalization. First, there is the concern that trade liberalization will adversely affect the rural poor, particularly small-scale farmers. Simulation studies (as well as economic logic) suggest that multilateral trade liberalization will raise the price of agricultural commodities, including wheat. Morocco would lose,


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