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RR RUEHDU RUEHJO RUEHPAA
DE RUEHRB #1031/01 3011716
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R 271716Z OCT 08
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 9283
INFO RUEHSA/AMEMBASSY PRETORIA 0255
RUEHPAA/AMEMBASSY PRAIA 0004
RUEHTN/AMCONSUL CAPE TOWN 0120
RUEHDU/AMCONSUL DURBAN 0002
RUEHJO/AMCONSUL JOHANNESBURG 0028

UNCLAS SECTION 01 OF 05 RABAT 001031 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR H - DIANE RICH, NEA/RA AND NEA/MAG 
 
E.O. 12958: N/A 
TAGS: OREP ECON ETRD PREL PTER PGOV MO
SUBJECT: SCENESETTER FOR CODEL LEWIS'S NOVEMBER 13- 
15 MOROCCO VISIT 
 
¶1.  (SBU) Representative Lewis, we welcome you and 
your delegation to Morocco, our oldest and closest 
ally in the region.  You will find a country that is 
"on the move," through a range of social, economic 
and political reforms aimed at making government 
more responsive to citizen concerns and enabling 
Moroccan citizens to benefit from the global 
economy.  The United States is a comprehensive 
partner in these reform efforts, through consistent 
engagement and advocacy of reform and programs 
including USAID, the Millennium Challenge Account 
(MCA), and Middle East Partnership Initiative (MEPI) 
assistance, as well as the 2006 Free Trade 
Agreement, our first in Africa. 
 
----------------------- 
Government and Politics 
----------------------- 
 
¶2.  (SBU) Governance:  Morocco's political scene is 
stable but evolving.  King Mohammed VI rules as well 
as reigns.  The King has made significant political 
reforms, including relative freedom of expression, 
advances on human rights, and enhanced legal 
protections for women, particularly through bold 
revisions to the family law code in 2004, which are 
controversial with conservative Islamists.  Partly 
as a result of this reform record, public support 
for the King and his reform agenda is generally 
solid. 
 
¶3.  (SBU) Parliament and Political Reform:  The 
September 2007 legislative elections were certified 
as free and transparent by a team of international 
monitors (funded by the USG).  In the elections, the 
Islamist-oriented Party of Justice and Development 
(PJD), socially conservative but loyal to the King, 
performed below expectations but obtained the 
largest number of votes and became the strongest 
element in the opposition as the second largest bloc 
in parliament.  The elections were marred by a 
record low turnout, broadly seen as a reflection of 
very low public confidence in the Parliament and 
political parties.  To address this, for the past 
few years, the USG has been funding capacity- 
building programs for the Parliament and political 
parties. 
 
¶4.  (SBU) Current Government:  Prime Minister Abbas 
El Fassi's government, formed after the September 
2007 legislative elections, is built on a minority 
coalition.  There has been periodic speculation that 
it might not last for the full five-year mandate of 
Parliament.  The new political force is Fouad Ali El 
Himma, an intimate of the King, and catalyst behind 
a political bloc calling itself the Movement of All 
Democrats (MTD), which evolved into a new Party of 
Authenticity and Modernity (PAM) by grouping several 
smaller parties.  In alliance with another pro- 
throne party it has now constituted the largest 
political bloc in Parliament.  We currently see no 
prospect for a significant shift in Morocco's 
foreign and security policies.  Neither Parliament 
nor the Prime Minister has much say in these issues, 
which are managed by the Throne directly with 
concerned ministries. 
 
------------------------------- 
Economics, Trade and Assistance 
------------------------------- 
 
¶5.  (SBU) Economics and Trade:  The economy is 
relatively healthy, marked by a recent trend of 
growing foreign investment and remittances, 
increasing tourism and accelerating growth (expected 
to be above 6 percent this year), but marred by 
increasing disparities in wealth.  Since 
implementation of our Free Trade Agreement on 
January 1, 2006, bilateral commerce has more than 
doubled.  Moroccan exports to the U.S. have 
increased 38 percent, and U.S. exports to Morocco 
have increased 155 percent.  Partial year figures 
for 2008 indicate that both U.S. and Moroccan 
exports have registered 40 percent growth over the 
 
RABAT 00001031  002 OF 005 
 
 
2007 results.  U.S. firms are increasing their 
investment in Morocco, seeing new markets develop as 
a result of the Free Trade Agreement.  The 
Commercial Service counted 48 export successes 
assisting U.S. companies conclude export deals to 
Morocco in Fiscal Year 2008. 
 
¶6.  (SBU) Moroccan government and private sector 
leaders have expressed some disappointment with the 
first few years of experience with the FTA, having 
expected higher export growth to the U.S.  Europe, 
however, still accounts for the lion's share of 
Morocco's international trade.  The Department of 
Commerce's Commercial Law Development Program and 
the U.S. Trade and Development Agency conduct 
capacity building and technical assistance projects 
to assist Morocco to create an open and transparent 
trading environment and fully develop its trading 
potential.  However, significant export growth to 
U.S. and other markets will also depend on Morocco's 
ability to capture a larger share of value added in 
its export products.  Targeted assistance programs 
from USAID and MEPI aim at improving Morocco's 
ability to produce and market its exports in key 
sectors. 
 
¶7.  (SBU) The Government of Morocco anticipates 6 
percent GDP growth for 2008, but most analysts 
expect growth to slip in 2009 in response to global 
economic turmoil.  Although Morocco's financial 
system has not suffered the losses incurred by 
financial institutions worldwide, economic slowdown 
in Europe will reduce Moroccan foreign earnings from 
exports, tourism, and remittances.  Agriculture 
remains a critical sector for GDP growth.  In 2007, 
drought and a small crop limited economic growth to 
only 2.3 percent, but better, if still below average 
rain and crops this year should allow higher growth. 
Rising food prices became a principal domestic issue 
for Morocco early in 2007, sparking sporadic 
protests.  The Government has successfully managed 
this issue and will continue to do so by subsidizing 
basic goods, including petroleum and food. 
Moroccans remember the food price riots of the 80's 
and 90's that threatened the stability of the 
nation. 
 
¶8.  (SBU) U.S. Assistance:  We are focusing our 
assistance to Morocco on four priorities: 
counterterrorism, economic growth, democracy and 
governance, and supporting quality education.  U.S. 
assistance includes projects under the Millennium 
Challenge Corporation, USAID, and the Middle East 
Partnership Initiative. 
 
¶9.  (U) The Millennium Challenge Corporation signed 
a five-year, USD 697.5 million Millennium Challenge 
Account Compact with Morocco in 2007 to reduce 
poverty and increase economic growth.  The five-year 
clock started ticking on September 15, 2008 with the 
Entry into Force of the Compact.  The MCA will 
support five major projects selected for their 
potential to increase productivity and improve 
employment in high potential sectors of Morocco's 
economy.  The MCA projects include: 
 
-- Fruit Tree Productivity Project, intended to 
shift small farmers away from high-water use, low- 
value cereal crops to low-water use, high-value and 
drought-resistant commercial tree crops. 
 
-- Small Scale Fisheries Project, modernizing the 
means of catching, storing, and marketing fish to 
both local and export markets.  This project will 
include establishing Marine Protected Areas and 
increased monitoring to ensure sustainable 
management of stocks. 
 
-- Artisan and Fez Medina Project, an integrated 
project combining reconstruction of the historic Fez 
Medina and training for artisans in production 
techniques and business practices to respond to 
tourist and export demand. 
 
 
RABAT 00001031  003 OF 005 
 
 
-- Financial Services Project, to increase the reach 
and availability of financial services for micro- 
enterprises in Morocco through investment in 
financial institutions and support to improve 
efficiency and transparency in the financial sector. 
 
-- Enterprise Support Project, partnering with 
existing Moroccan Government initiatives to reduce 
unemployment among young graduates, and encourage a 
more entrepreneurial culture. 
 
¶10.  (U) USAID continues provide assistance to 
Government of Morocco agencies and the private 
sector to enable them to take full advantage and 
address the challenges of the U.S.-Morocco Free 
Trade Agreement.  Examples of achievements in the 
past five years include: 
 
-- USAID assistance has helped to reduce the number 
of days needed to register a business from 60 to 11. 
 
-- USAID developed an electronic tool to facilitate 
administrative procedures for investment; several 
ministries expressed strong interest to adapt it to 
other sectors, such as land development. 
 
-- USAID supported the certification of more than 
20,000 hectares of rosemary according to 
international export standards, thereby doubling the 
value of the crop. 
 
-- USAID supported the participation in an apparel 
trade show by 10 Moroccan companies leading to 
orders totaling over USD 11 million. 
 
-- Over USD 2 million in sales of agriculture 
products were generated by direct support to 
farmers, cooperatives and agribusinesses, which 
invested over USD 6 million in improved production 
capacity. 
 
Over the next five years, USAID support to economic 
growth will focus on policy reforms to further 
improvement of the business environment in Morocco. 
USAID also expects to continue support to strengthen 
agricultural policy, to complement work funded by 
the Millennium Challenge Corporation, in addition to 
USAID reform assistance carried out under the 
Education and Democracy and Governance objectives. 
 
¶11.  (U) Morocco benefits from several initiatives 
carried out under the Middle East Partnership 
Initiative, including country-specific projects and 
inclusion in regional efforts.  Some recent and 
ongoing programs include breast cancer awareness 
projects, support for civil society and youth 
organizations, developing freedom of expression via 
the Internet, supporting development of democratic 
leaders, technical assistance to meet environmental 
obligations under the FTA, political party training 
and capacity building, and the Financial Services 
Volunteer Corps.  In 2007, MEPI funded the first- 
ever international observation of the Moroccan 
parliamentary elections.  Other USG-funded projects 
support anti-corruption efforts (with the American 
Bar Association) and prison reform to undermine the 
foundations of extremism. 
 
---------------------- 
Security and Terrorism 
---------------------- 
 
¶12.  (SBU) Morocco suffered spates of terrorist 
violence in 2003 and 2007, stemming from numerous 
small "grassroots" Salafi Jihadist groups.  The 
attacks in 2007, which appear to have been, at best, 
poorly coordinated events, contrast sharply with 
more elaborate plots in 2006 that were thwarted by 
the vigilance of Moroccan authorities.  Throughout 
2007 and 2008, the Government of Morocco continued 
to dismantle terrorist cells within the Kingdom. 
Morocco faces external terrorist threats including 
Al Qaeda in the Lands of the Islamic Maghreb (AQIM), 
Pakistan-based Al Qaeda, and jihad veterans 
 
RABAT 00001031  004 OF 005 
 
 
returning from Iraq and Afghanistan. 
 
¶13.  (SBU) A key to Morocco's counterterrorism (CT) 
strategy has been a comprehensive approach which not 
only emphasizes neutralizing existing terrorist 
threats through traditional law enforcement and 
security measures, but also engages in preventative 
measures to discourage terrorist recruitment through 
political reform and policy measures and by taking 
advantage of the Islamic "high ground" through the 
King, as religious leader, and the religious 
establishment.  As a religious and political leader 
for all Moroccans, King Mohammed VI has led this 
effort by unambiguously condemning terrorism and 
those who espouse or conduct terrorism. 
 
¶14.  (SBU) Morocco continues to implement internal 
reforms aimed at addressing the socio-economic 
factors that contribute to the emergence of 
extremism.  The National Initiative for Human 
Development, launched by King Mohammed VI in 2005, 
is a USD 1.2 billion program designed to generate 
employment, combat poverty, and improve 
infrastructure, with a special focus on rural areas. 
The Embassy is chipping in with programs targeted at 
vulnerable youth and we have a proposal for FY 09 
funding to sponsor prison reform and 
deradicalization.  The Government of Morocco also 
emphasized adherence to human rights standards in 
the pursuit of terrorist suspects and increased law 
enforcement and justice transparency as part of its 
counterterrorism program.  Its actions have 
increasingly reflected this rhetoric and 
demonstrated unprecedented frankness in presenting 
to the public candid assessments of the terrorism 
threat.  The USG supports a wide range of 
counterterrorism and counterextremism programs 
involving almost every mission element. 
 
--------------------------------- 
Regional and International Issues 
--------------------------------- 
 
¶15.  (SBU) Border Troubles with Algeria:  The 
Moroccan relationship with Algeria remains tense, 
and the border between the two countries remains 
closed.  Although possessing common languages and 
some ethno-cultural roots, the two countries have 
had sharply divergent historical experiences. 
Territorial tensions began shortly after Algerian 
independence, when a dispute over the demarcation of 
the border between the two countries in 1963 led to 
a brief period of hostilities known as the Desert 
(or Sand) War.  For the last 30 years, a major bone 
of contention has been the Western Sahara issue and 
Algerian support for the POLISARIO Front and its 
self-proclaimed Sahrawi Arab Democratic Republic. 
The recent Moroccan purchase of F-16s was partially 
motivated by the sense of threat from a previous 
Algerian purchase of advanced aircraft from Russia. 
In March, Morocco publicly proposed opening the 
border between the two countries, which was quickly 
rebuffed by the Government of Algeria.  Morocco has 
made several proposals to upgrade bilateral 
dialogue, to which there has not yet been a public 
response from Algeria. 
 
¶16.  (SBU) Western Sahara:  Moroccan foreign policy 
is dominated by defending and seeking political 
recognition of its sovereignty claims over Western 
Sahara.  The issue remains the most visible source 
of tension with Algeria, which has historically 
supported the POLISARIO's quest for independence by 
way of a UN-sponsored referendum.  The issue 
provoked Morocco to leave the African Union and 
helped block regional integration through the Arab 
Maghreb Union.  In 2007, Morocco proposed a new 
autonomy plan for Western Sahara, and a series of 
UN-sponsored negotiations with the POLISARIO began 
in Manhasset, New York.  This proposal, deemed 
"serious and credible" by the USG, would provide 
Sahrawis -- a distinct tribal and linguistic 
population whose traditional area of habitation 
includes Western Sahara -- autonomy in administering 
 
RABAT 00001031  005 OF 005 
 
 
local affairs while respecting Moroccan sovereignty 
over the territory.  Morocco greatly appreciated the 
U.S. announcement in early 2008 that we considered 
the independence option for the territory, "not 
realistic."  The USG favors instead an agreed 
negotiated political settlement between Morocco and 
the POLISARIO.  The UN Secretary General will 
shortly appoint a new representative to continue the 
Manhasset process, and we strongly urge a fifth 
round of negotiations to be held soon to maintain 
the momentum of this process. 
 
Jackson