VZCZCXYZ0018
RR RUEHWEB

DE RUEHCL #0270/01 0140923
ZNR UUUUU ZZH   (CCY REMOVED CLASS BY AD004B7DF7/MSI2108 510)
R 140923Z JAN 08
FM AMCONSUL CASABLANCA
TO RUEHC/SECSTATE WASHDC 7938
INFO RUEHRB/AMEMBASSY RABAT 8187
RUEHLO/AMEMBASSY LONDON 0332
RUEHNK/AMEMBASSY NOUAKCHOTT 2308
RUEHFR/AMEMBASSY PARIS 0616
RUEHEE/ARAB LEAGUE COLLECTIVE

UNCLAS CASABLANCA 000270 
 
SIPDIS 
 
C O R R E C T E D COPY  (REMOVED CLASS BY STATEMENT) 
 
SIPDIS 
 
SENSITIVE 
STATE FOR NEA/MAG AND NEA/PI 
 
E.O. 12958: N/A 
TAGS: ECON EFIN KDEM MO
SUBJECT: DONKEY CARTS BY DIOR: CASABLANCA GOES UPSCALE 
 
¶1. (SBU) Summary:  An explosion of high-end stores has hit Casablanca 
in the past few years, causing one magazine to declare luxury a new 
sector in Morocco.  While some view the luxury boom as evidence of 
newfound upward mobility, others believe the rich are just getting 
richer, though it is not always clear how.  Many not-so-wealthy 
Casablancans find the trend in high-end consumption troubling, seeing 
it as a harbinger of social unrest rather than a sign of economic 
progress.  From our p 
erspective, this is all the more reason why 
education and job-creation initiatives remain vital.  End Summary. 
-------------------- 
LUXURY, A NEW SECTOR 
-------------------- 
 
¶2. (U) Over thhas burgeoned.  One major thor 
oughfare boasts crystals 
jeweler Swarovski a few doors down from Bulgari, purveyor of luxury 
jewelry and leather goods.  In the tony Maarif section of town, 
wealthy shoppers can outfit themselves at Cavalli, Lacoste or Dior, 
which opened in June 2007, just to name a few.  They can accessorize 
at Cartier or Chopard, pick up a handbag at Louis Vuitton, or peruse 
the latest fashions at Max Mara and Hugo Boss, where a suit costs 
close to a thousand dollars.  Such high-end shopping extends to cars, 
restaurants and home furnishings too.  One recent, well-traveled 
visitor commented that Casablanca was the only place he had been 
where he had seen a Lamborghini, a Porsche and an Aston Martin all in 
one day.  Another observer finds it striking that one can stroll by 
Cartier and streets lined with late-model Mercedes, then pass donkey 
carts and shantytowns in a few easy blocks. 
 
¶3. (SBU) The media have presented the proliferation of high-end 
products as an indication that Casablancans - and Moroccans more 
generally - have arrived.   In a report on the boom in luxury 
boutiques, Morocco's largest TV station, 2M, showed a man boasting of 
buying his wife a USD 200,000 Porsche for her birthday.  The piece 
made the point that Moroccans no longer have to travel to Europe to 
buy luxury goods, as they can get the same items for the same price - 
or less - in Morocco, with the advantage of paying in Moroccan 
dirham. 
 
¶4. (U) An article in the January 2008 issue of the monthly Economie 
et Entreprises suggests that luxury is actually a new sector.  The 
article sites the fact that the High Commission for Planning (HCP) 
has recently launched a new cost-of-living index that includes 
products other than the standard basics as evidence of a new 
generation of Moroccan consumers 'hungry for luxury products' and a 
certain level of comfort.  The article lauds Morocco's booming 
economic environment, naming a multitude of dynamic sectors including 
real estate, telecommunications, energy and banking, and declares 
that 'dazzling growth' and increased salaries have given rise to a 
new class of luxury consumers. 
 
---------------------- 
THE RICH GET RICHER... 
---------------------- 
 
¶5. (SBU) Most Casablancans, however, do not view the explosion of 
high-end consumption as an indication that the average citizen's 
purchasing power has increased, but rather as evidence that the rich 
are getting richer.  As Khalid Oudghiri, former CEO of Attijariwafa 
Bank, admitted in a meeting in his office last March, the wealthy 
benefit more from Morocco's growth and the real estate boom than the 
majority of people, who do not benefit at all.  A long-time resident 
of Casablanca seconded this view, saying that four to five percent of 
the population controls 60 percent of the wealth. 
 
¶6. (SBU) Given such inequity, average Casablancans find the rise in 
luxury consumption troubling for several reasons.  First, consumerism 
has become more conspicuous.  One ex-resident of the city said 
 
wealthy Casablancans used to shop abroad, bringing back goods 
discretely in their cars.  Nowadays, they shop where everyone can see 
them.  Second, the explosion of so many successful upscale ventures 
begs the question of where the money to support them comes from. 
Interestingly, most individuals asked had no answer.  Some ventured 
to guess, offering privatization, increased tourism, or the 
availability of loans at reasonable interest rates as possible 
explanations.  One resident noted that, unlike in the past, banks now 
offer loans for "anything" at interest rates close to five percent, 
down from 20 percent previously.  To boot, they compete with one 
another, lowering rates further.  In the absence of a clear 
explanation for Casablanca's newfound wealth, some hypothesized that 
money-laundering plays a role. 
------------------------- 
AND THE POOR GET RESTLESS 
------------------------- 
 
¶7. (SBU) Casablancans in general view the profusion of high-end 
consumption by a narrow segment of the city's population as a 
harbinger of social unrest rather than a sign of upward mobility. 
One called the phenomenon "quite distressing" and said it could only 
contribute to social tension.  Another long-time resident maintains 
that Casablanca is a neglected city where King Mohamed VI puts little 
effort, particularly in poor areas.  He contends that, "the poor are 
going to rise up if nothing's done."  Others agree that the 
in-your-face displays of extreme wealth in Casablanca only serve to 
highlight the growing disparity between rich and poor. 
 
¶8. (SBU) Comment: While a fortunate few live the high life in 
cosmopolitan Casablanca, the have-nots still outnumber the haves by a 
wide margin.  The fact that the GOM subsidizes basic commodities such 
as bread and sugar to avoid unrest indicates that it is aware that 
the situation is tenuous.  Continued efforts to provide education, 
training and employment to Casablancans remain key to distributing 
the benefits of the economic boom more broadly and damping social 
tension.  End Comment. 
 
GREENE