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Morocco's market economy benefits from the country's relatively low labor costs and proximity to Europe, which aid key areas of the economy such as agriculture, light manufacturing, tourism, and remittances. Morocco is also the world's largest exporter of phosphate, which has long provided a source of export earnings and economic stability. Economic policies pursued since 2003 by King MOHAMMED VI have brought macroeconomic stability to the country with generally low inflation, improved financial performance, and steady progress in developing the service and industrial sectors. In 2006, Morocco entered a Free Trade Agreement (FTA) with the US, and in 2008 entered into an advanced status in its 2000 Association Agreement with the EU. However, poverty, illiteracy, and unemployment rates remain high. In response to these challenges, King MOHAMMED in 2005 launched a National Initiative for Human Development, a $2 billion program aimed at alleviating poverty and underdevelopment by expanding electricity to rural areas and replacing urban slums with public and subsidized housing, among other policies. Morocco's trade and budget deficits widened in 2010, and reducing government spending and adapting to sluggish economic growth in Europe will be challenges in 2011. Morocco's long-term challenges include improving education and job prospects for young Moroccans, closing the disparity in wealth between the rich and the poor, confronting corruption, and expanding and diversifying exports beyond phosphates and low-value-added products.