VZCZCXRO5805
RR RUEHTRO
DE RUEHRB #0423/01 0641633
ZNR UUUUU ZZH
R 051633Z MAR 07
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 6012
INFO RUEHAS/AMEMBASSY ALGIERS 4342
RUEHAK/AMEMBASSY ANKARA 0182
RUEHEG/AMEMBASSY CAIRO 1998
RUEHTRO/AMEMBASSY TRIPOLI 0145
RUEHTU/AMEMBASSY TUNIS 9227
RUEHCL/AMCONSUL CASABLANCA 2765
RUEHRC/DEPT OF AGRICULTURE WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 RABAT 000423 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/MAG, STATE PASS USTR (BELL), USPTO (ADLIN AND 
ADAMS), USDOC FOR ITA/MAC/ONE (ROTH), ADVOCACY CTR (JAMES) 
AND CLDP (TEJTEL) 
 
E.O. 12958: N/A 
TAGS: EAIR ECON ECPS EINT ELAB ETRD KTEX MO
SUBJECT: MOROCCO ECONOMIC HIGHLIGHTS; FEBRUARY 2007 
 
¶1. (U) The following is a round-up of recent economic 
developments of note in Morocco: 
 
¶2. (U) Money Laundering Law Advances: Morocco's long-delayed 
anti-money laundering/counter terrorism finance statute was 
unanimously approved by members of the Justice, Legislation 
and Human Rights Committee in the Upper Chamber of 
parliament.  A number of final amendments were introduced, 
aimed mainly at establishing "criminal intent" as a necessary 
precondition for prosecution.  One final legislative step 
remains: approval by the upper Chamber as a whole. 
Thereafter the law will be published in the Official Gazette 
and will enter into force.  We estimate that full 
implementation should occur before the end of April. 
 
¶3. (U) New Boeings at RAM: Royal Air Maroc took delivery of a 
new Boeing 737-800 at the end of February and will receive 
another one in mid-March.  The purchases are part of a USD 2 
billion fleet upgrade covering the 2006-2013 period.  RAM 
also took delivery of four Boeings in 2006. 
 
¶4. (U) Meanwhile, expansion among low-cost airlines serving 
Morocco continues to grow.  In 2006, Atlas Blue, the low-cost 
subsidiary of Royal Air Maroc, reported a 27 percent rise in 
revenue while carrying 902,000 passengers, double the number 
from 2005.  Atlas Blue is pursuing a growth strategy that 
will see its current fleet of 6 aircraft grow to 24 by 2012. 
Joining Atlas Blue and other low-cost carriers Ryanair and 
EasyJet, Spanish low-cost airline, Spanish Clickair, 
announced it would begin service to Casablanca and Marrakech 
from Barcelona in April.  In response to the low-cost 
competition, RAM announced it would reduce its prices on many 
domestic flights and continuing to offer a limited number of 
discounted international tickets. 
 
¶5. (U) Housing Projects Aim to Curb Skyrocketing Costs: 
Housing Minister, Toufiq Hjira, revealed the Moroccan 
government is planning to build 170 new urban zones in 
several regions of the country in order to improve the 
balance between supply and demand in the housing sector, as 
part of the government's response to the skyrocketing cost of 
real estate.  According to Mohamed Adil Bouhaja, President of 
the Association of Estate Agents in Marrakech, an insatiable 
European demand for Moroccan homes has greatly increased 
demand and prices.  For example, an apartment purchased two 
years ago in Marrakech for 300,000 dirhams, can now be sold 
for up to 900,000 dirhams.  This new construction, however, 
will add pressure to a cement industry that is already 
stressed.  Cement production increased over 10 percent in 
2006 to 11.3 million tons.  Projections call for domestic 
demand to reach 15.5 million tons by 2010.  To meet this 
need, major cement factories in Morocco agreed to earmark 
over USD 1.18 billion in resources over the next 4 years to 
increase production by 5.5 million tons. 
 
¶6. (U) Moroccan Pavilion Wins Best In Show:  The Moroccan 
pavilion at the MAGIC Show, designed and financed by the 
USAID-funded New Business Opportunities program, was awarded 
the Best in Show prize in booth design by the show 
organizers.  The MAGIC Show is the biggest U.S.-based trade 
show for textiles and apparel that occurs twice a year.  The 
Moroccan pavilion showcased the range of Moroccan products 
and the significance of the U.S.-Moroccan Free Trade 
Agreement for U.S. importers.  Several of the 11 company 
delegation received orders or test orders, and expectations 
are for total orders to exceed the USD 10 million that 
resulted from MAGIC 2006. 
 
¶7. (SBU) New anti-piracy push: Abdallah Ouadghiri, head of 
the Moroccan Copyright Office, announced a new national 
anti-piracy strategy at the end of February.  He outlined 
strict penalties, increased enforcement in large cities 
throughout Morocco, and plans to step up seizures of 
counterfeit products.  Separately, Casablanca-based 
international trademark holders have formed a Brand 
Protection Group to coordinate their cooperation with the 
government in combating a recent epidemic of counterfeit 
products.  (Comment: Casablanca septel will outline the 
group's strategy and activities to date.  FCS Casablanca is 
 
RABAT 00000423  002 OF 002 
 
 
also working with Moroccan Customs to prevent recurrence of a 
case where a shipment of counterfeit feminine hygiene 
products that violate a Proctor and Gamble trademark was 
cleared into Morocco.  Customs subsequently seized much of 
the shipment, but we understand additional shipments are en 
route.  End Comment.) 
 
¶8. (U) Looming Electricity Crisis?: There has been much press 
play over the past week about an alarmist headline in the 
"Economist" newspaper on February 22 predicting that a "grave 
crisis" in electricity in coming years.  The paper argued 
that planned investments in generating capacity are not 
keeping up with growth in demand, which has averaged 9 
percent annually, with the result that power outages may 
start as early as 2008.  The National Electricity Office 
(ONE), the ostensible source of the "Economist" report, has 
yet to deny the report, and Minister of Energy Boutaleb has 
confined his comment to observing that "there is not 
currently a problem with electricity supply."  Sectoral 
experts note that the additional capacity that will come on 
line in the short term is limited, but that interconnections 
with Spain and Algeria should make up any shortfall that 
exists.  They thus predict problems beginning in 2009.  We 
are seeking meetings with ONE and the Energy Ministry to look 
into the issue further. 
 
¶9. (SBU) Crop Update: FAS recently traveled through wheat and 
barley growing regions to assess the 2007 cereal crop.  The 
assessment confirmed media, government and contact reports 
that the 2007 cereal crop will be down significantly from 
¶2006.  Although harvest will not begin until June, early, 
rough estimates place wheat and barley production at 4 
million to 4.5 million tons, compared to 9.2 million tons for 
the previous year.  In anticipation of the short crop and dry 
conditions, the GOM has eliminated the import duty on a 
number of feed grains and feed ingredients, and most recently 
lowered the import duty on wheat from 130 percent to 60 
percent. 
****************************************** 
Visit Embassy Rabat's Classified Website; 
http://www.state.sgov.gov/p/nea/rabat 
****************************************** 
 
Riley