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PP RUEHWEB

DE RUEHCL #0211/01 3001354
ZNY CCCCC ZZH
P 271354Z OCT 07
FM AMCONSUL CASABLANCA
TO RUEHC/SECSTATE WASHDC PRIORITY 7876
RUEHAS/AMEMBASSY ALGIERS 2946
RUEHBP/AMEMBASSY BAMAKO 0249
RUEHEG/AMEMBASSY CAIRO 0828
RUEHRY/AMEMBASSY CONAKRY 0024
RUEHDK/AMEMBASSY DAKAR 0269
RUEHLC/AMEMBASSY LIBREVILLE 0042
RUEHLO/AMEMBASSY LONDON 0328
RUEHMD/AMEMBASSY MADRID 3760
RUEHNK/AMEMBASSY NOUAKCHOTT 2304
RUEHRB/AMEMBASSY RABAT 8128
RUEHTU/AMEMBASSY TUNIS 2069
RUEHFR/AMEMBASSY PARIS 0612
RUEHYD/AMEMBASSY YAOUNDE 0082

C O N F I D E N T I A L CASABLANCA 000211 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR NEA/MAG AND NEA/PI 
 
E.O. 12958: DECL: 06/21/2017 
TAGS: ECON EFIN KDEM MO
SUBJECT: CASABLANCA BUSINESS BUZZ: SEVERAL GOOD MINISTERS, FEW 
EXPECTATIONS 
 
Classified By: Principal Officer Douglas Greene for reasons 1.4 (B) 
AND (D) 
 
REF: (A) RABAT 01617 (B) CASABLANCA 0207 
 
¶1. (SBU) SUMMARY: Casablanca's business community finds the selection 
of the government's new ministers encouraging on the whole.  Many 
were particularly pleased with the new Finance Minister, Salaheddine 
Mezouar, who has a solid reputation as a capable practician.  Despite 
finding many ministers (with the notable exception of the Prime 
Minister) competent and well-chosen, however, few businesspeople had 
concrete expectations of the new government, reflecting the general 
perception that the palace influences government action more than 
Parliament.  END SUMMARY. 
 
----------------------------- 
SEVERAL WELL-CHOSEN MINISTERS 
----------------------------- 
 
¶2. (C) Although most Moroccans expressed disappointment with the 
selection of Abbas El Fassi as Prime Minister, many Casablanca 
businesspeople are encouraged by the cadre of new ministers. 
According to Mohammed El Kettani, the newly appointed chairman and 
CEO of Attijariwafa Bank, the last government had about four very 
competent ministers, while this one has about 12.  Mohamed Tamer, 
President of the Moroccan Association of Textile and Clothing 
Industries (AMITH), agreed, naming several well-chosen ministers off 
the top of his head in a recent meeting with CG and Econoff. 
Specifically, he cited the following key trio: Karim Ghellab, 
Minister of Equipment and Transport; Ahmed Toufiq Hejira, Minister of 
Habitat and Urban Planning; and Ahmed Chami, Minister of Industry, 
Commerce and New Technology.  He also mentioned Abdellatif Maazouz, 
the Minister of Foreign Trade, as good for the textile sector.  Both 
El Kettani and Tamer used words such as "encouraging" and 
"reassuring" to describe the new government, reflecting the 
perception that the ministers are generally a good bunch. 
 
¶3. (SBU) Salaheddine Mezouar, former Minister of Industry and Trade, 
is considered a particularly solid choice for Finance Minister.  An 
individual who works in the finance sector commented that Mezouar had 
"shown himself to be competent" and could push the ministry forward. 
He also cited Mezouar's recent comment to the press that he favored 
more openness as a positive sign.  Others noted his experience in 
business as a plus for the business community.  In the past, Mezouar 
served as President of AMITH and President of the Textile and Leather 
Division of the General Federation of Moroccan Enterprises (CGEM), as 
well as CEO of a private textile company.  Given this background, 
AMITH's Tamer was especially pleased to see him remain a minister. 
 
¶4. (SBU) At the same time that many are pleased with having a 
practician fill the Finance Minister's shoes, some expressed 
apprehension at Mezouar's lack of background in finance.  Unlike his 
predecessor, Fathallah Oualalou, he is not a theoretician.  In a 
recent article in the daily journal l'Economiste, he himself said, "I 
am not an expert in finance."  Regardless, he has an excellent 
reputation.   In August 2007, Telquel magazine named him one of the 
"hundred who move Morocco."  A seasoned minister, he is getting down 
to business quickly and has thus impressed Casablanca business 
leaders by already outlining the 2008 Finance Law, which calls for 
capping the deficit at three percent, creating 16,000 jobs, 
increasing investment by 37 percent, revising fiscal policy and 
continuing poverty reduction and reform measures. 
 
¶5. (SBU) Opinions were slightly more mixed regarding the selection of 
Ahmed Chami as Minister of Industry, Trade and New Technologies.  One 
business professional commented that he is a young, dynamic 
businessman with his own export company, making him a decent choice. 
L'Economiste quoted Tamer as saying that Chami's appointment is 
reassuring, given the challenges - such as reviewing the Labor Code 
and reforming the justice system - that lay ahead, and he reiterated 
this positive view in his meeting with CG and Econoff.  Some, 
however, question Chami's management ability and whether he has the 
necessary skills to push initiatives through. 
 
----------------------------- 
FEW WELL-DEFINED EXPECTATIONS 
----------------------------- 
 
 
¶6. (U) Casablanca's business community does not seem to have 
consistent expectations for the new government, except perhaps for a 
few measures such as reducing taxes.  The new government is expected 
to lower corporate taxes (IS) from 35 to 30 percent for businesses, 
and from 39.6 to 35.5 percent for banks.  The hope is that such a 
change will encourage companies to be more transparent and entice 
those in the informal sector to become formal. 
 
¶7. (C) In general, however, Casablanca's businesspeople offered few 
concrete expectations for the new government.  Attijariwafa's El 
Kettani noted fiscal changes such as the one mentioned above, and 
expressed support for restructuring income tax so that someone 
earning less than USD 800 per month is not taxed at 42 percent. 
Speaking in broad terms, he said the government faced a critical 
period ahead and would have to combat marginalization to avoid 
instability.  His prescription for achieving this included revamping 
fiscal policy and the administrative environment, aggressively using 
the National Initiative for Human Development (INDH) to support 
income-generating activities, and improving the education and justice 
systems.  Like El Kettani, Tamer had few concrete expectations, but 
did say he would like to see the government explicitly articulate the 
promotion of Morocco as an export-oriented country in its program. 
Many individuals with whom Econoff spoke expressed a "wait and see" 
attitude regarding the new government's impact on business and the 
economy in Morocco. 
 
¶8. (SBU) COMMENT: Prior to the September 2007 elections, few 
Casablancans expected parties to have well-defined platforms.  Now 
that a new government is in place, they seem not to expect many 
specific, concrete changes, even if they are optimistic about the 
ministers and Morocco's prospects in general.  This likely reflects 
the perception that the Parliament is a relatively impotent body, 
subject as always to palace prerogatives.  END COMMENT. 
 
GREENE