Through the development of an efficient banking system, as well as macro-economic stability, Morocco has been relatively successful in directing remittances through official channels. Notwithstanding some slumps, remittances surged from 200 million dirham (US$ 23 million) in 1968 to over 18.5 billion dirham (US$ 2.1 billion) in 1992. After an ominous stagnation throughout the 1990s at levels of around US$ 2.3 billion, remittances surged after 2001 (with a minor slump in 2002), reaching the unprecedented level of US$ 4.2 billion in 2004 and an estimated US$ 5.6 billion in 2006.
Although part of the upswing is likely the effect of the devaluation of the US dollar combined with better registration of activities, there is little doubt that there has also been a real increase in remittances. Between 2001 and 2006, official remittances only represented 7.4% of the gross national product (GNP) and their value was equal to a large share of Morocco´s trade deficit. Officially registered private remittances significantly exceed the value of direct foreign investments, which are also much more unstable. Until 2005, they also exceeded the receipts from tourism. Remittance revenues dwarf those of phosphates, Morocco's primary export commodity.
The increase in remittances is partly linked to the enormous increase in the number of Moroccans returning during the summer holidays, which testifies to the strong social links between emigrants and their families in Morocco. According to a recent survey, three quarters of the international migrants have visited Morocco at least once in the past two years. Moroccan government sources claim that over 2.2 million migrants and 580,000 cars crossed the Strait of Gibraltar between 15 June and 15 September 2003. In 2006, the total number of holiday visits by migrants and their descendants had increased to about three million.
Over the past two decades, remittances have proved to be a substantially higher and less volatile source of foreign exchange than either official development assistance (ODA) or foreign direct investment (FDI), and have become a vital element in sustaining Morocco's balance of payments (see figure). Although there is disappointment at the low propensity among migrants to start enterprises, remittance expenditure and numerous investments in housing and small businesses by migrants have actually substantially improved living conditions, contributed to poverty reduction and boosted economic activities in several migrant-sending areas.
Available empirical studies suggest that migration and remittances have considerably improved living conditions, income, education and spurred economic activity through agricultural, real estate and business investment, from which non-migrants indirectly profit. This has led to the rapid growth of migrant boomtowns and has transformed migrant-sending regions such as the Rif, Sous and several southern oases into relatively prosperous areas that now attract internal migrants from other, poorer areas.
However, the developmental potential of migration has not been fully realized due to several investment constraints such as uncertainty concerning property rights, corruption, bureaucracy, market failure and an overall lack of faith in the Moroccan state. Migration and remittances may enable people to retreat from, as much as to invest in, local economic activities, depending on the specific investment environment. Positive development impacts of remittances are more prevalent in relatively central, relatively prosperous regions and towns where most migrants allocate their investments or return to, whereas more marginal rural areas might be confronted with de-investment or even depopulation. Paradoxically, therefore, a certain level of development in migrant-sending regions seems to be a prerequisite for return and investment rather than a consequence of migration.