VZCZCXRO3804
RR RUEHLMC
DE RUEHRB #1196 1701840
ZNR UUUUU ZZH
R 191840Z JUN 06
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 4069
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC
INFO RUEHCL/AMCONSUL CASABLANCA 1817

UNCLAS RABAT 001196 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/PI AND NEA/MAG 
 
E.O. 12958 
TAGS: EAGR EAID ECON SOCI KMCA MO
SUBJECT: MILLENNIUM CHALLENGE CORPORATION BRIEFS PRIME 
MINISTER ON RECENT PROGRESS 
 
Sensitive but unclassified - protect accordingly 
 
¶1.  (SBU) Summary.  On June 16, Prime Minister Driss Jettou 
met with Ambassador Riley and the visiting team from the 
Millennium Challenge Corporation (MCC) to discuss the 
results of the MCC team's recent meetings with the 
Government of Morocco's (GOM) Millennium Challenge Account 
(MCA) team.  The MCC representatives briefed Jettou on 
progress, noting good results and that the two sides had 
developed a new methodology with which to analyze potential 
projects in Morocco's compact proposal to use MCA funds. 
They added that they hoped the GOM will have a new and 
condensed proposal ready by the end of July, but cautioned 
that the MCA team would need to work full-time on the 
proposal in order to meet that time frame.  Jettou noted 
that he had asked the MCA to be flexible and open minded to 
the MCC's suggested changes to the current proposal. 
However, he then reiterated the importance of each of the 
elements in the current compact proposal.  The recently 
developed methodology will offer an important optic to 
help guide future negotiations in developing an acceptable 
compact proposal.  End summary. 
 
¶2.  (SBU) The MCC's Senior Country Director, Michael 
Grossman, told Jettou that he, Associate Country Director, 
Magda Ismail, and Senior Economist, Steve Anderson, had 
achieved good results during their three days of meetings 
with the MCA team.  The two sides had achieved their main 
goal of developing a framework to analyze projects presented 
in the GOM's compact proposal.  Grossman presented the two 
teams' mutual objective as, "stimulating economic growth by 
increasing productivity and improving employment in high 
potential sectors."  He added that the teams were developing 
a second set of criteria, based on determining the 
suitability of public investment and the economic impact of 
various projects, to help sharpen their focus even more. 
The Ambassador emphasized the importance of this 
accomplishment because it will provide the two sides on 
agreed methodology to evaluate potential projects proposed 
for inclusion in the compact.  Jettou was pleased with the 
methodology and noted the Moroccan public was watching the 
MCA program with great interest.  Grossman said the MCC 
would stay in close contact with him and that MCC planned 
two more visits to Morocco by early July. 
 
¶3.  (SBU) Jettou proceeded to discuss the benefits of most 
of the programs included in the current compact proposal, 
although he acknowledged Grossman's assertion that some of 
them might need to be deleted.  He noted the positive 
results of existing programs in the fields of micro credit 
lending, oases preservation, handicrafts, agriculture, 
fishing, textiles and the King's National Initiative for 
Human development (INDH).  Jettou also discussed the 
considerable work the GOM had done to identify potential 
growth sectors (off-shoring, aviation, automobile 
components, telecommunication, textiles, fishing and 
handicrafts) through a study conducted by McKinsey and 
Company.  He said Morocco was opening its economy to the 
world and was facing stiff competition on several fronts. 
Therefore, the GOM was supporting large foreign investors 
(in the range of $100 to $150 million), such as Fruit of the 
Loom, with investment incentives.  He added that after the 
MCA compact proposal was accepted, he would introduce a new 
private sector-led team to implement the plan. 
 
¶4.  (SBU) Grossman responded that most MCA member countries 
retain some members of their compact negotiating team on 
their implementation teams.  Jettou agreed and even asked 
MCC to suggest members of the future implementation team. 
Grossman declined to suggest names, but recommended that 
civil society members should also be included.  He 
added that the current MCA team should work on developing an 
acceptable compact proposal on a full-time basis, rather 
than their current part-time schedule, and Jettou agreed. 
 
¶5.  (SBU) Comment.  The GOM will be pushed to deliver a new 
condensed proposal by the end of July, but the MCC team's 
current trip has helped to focus the GOM on the types of 
programs it should pursue.  Jettou showed strong interest in 
getting the compact proposal completed by offering to 
increase Morocco's MCA team to a full-time basis to complete 
an acceptable proposal.  The new methodology should help in 
focusing the GOM's proposal, however, it remains to be seen 
how readily the GOM will accept the need to eliminate 
certain programs contained in the current compact 
proposal. 
BUSH