VZCZCXYZ0000
RR RUEHWEB

DE RUEHCL #0144/01 2041342
ZNR UUUUU ZZH
R 231342Z JUL 09
FM AMCONSUL CASABLANCA
TO RUEHC/SECSTATE WASHDC 8460
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNMGH/MAGHREB COLLECTIVE
RUEHFR/AMEMBASSY PARIS 0715
RUEHMD/AMEMBASSY MADRID 3876

UNCLAS CASABLANCA 000144 
 
SIPDIS 
SENSITIVE 
 
STATE FOR NEA/MAG 
COMMERCE FOR NATHANIEL MASON 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PGOV MO
SUBJECT: DEAR MOROCCAN EXPATRIATES, PLEASE SEND MONEY 
 
REF: RABAT 0171 
 
¶1.  (SBU) Summary: The global economic contraction is having a 
direct effect on Morocco's economy through falling remittances. 
Based on discussions with government interlocutors and the banking 
community, the outlook for inflows of expatriate funds into Morocco 
is increasingly somber.  Morocco's expatriate laborers provide the 
country with its largest source of foreign capital, far more than 
foreign direct investment inflows and the country's tourist 
industry.  The Ministry of Finance reported recently that 
remittances will drop 15 percent from USD 6.8 billion in 2008 to an 
estimated USD 5.5 billion in 2009.  The government continues to 
closely follow the inflow of expatriate funds and recently announced 
a series of new measures aimed at boosting remittances from 
Morocco's approximately three million expatriate laborers.  End 
Summary. 
 
----------------------- 
Moroccans Living Abroad 
----------------------- 
 
¶2.  (SBU) According to the Council of the Moroccan Community Abroad 
(CCME), a government body representing the country's expatriate 
laborers, more than 3 million Moroccans currently live abroad with 
an estimated 1.6 million in France and 700,000 in Spain, the two 
principal sources of remittances for Morocco.  CCME's director Driss 
El Yazami told EconOff there has been a geographical broadening of 
emigration in the last couple of years, with a particular emphasis 
on the United States, home to about 100,000 Moroccans.  El Yazami 
also noted that single women are increasingly emigrating from 
Morocco and now make up more than 50 percent of Moroccans living 
abroad, known locally as MREs (Marocains Residant a l'Etranger). 
 
--------------------------------------------- ---- 
MREs: Morocco's Largest Source of Foreign Capital 
--------------------------------------------- ---- 
 
¶3.  (SBU) Remittances contribute to Morocco's economy on both a 
micro and macro level.  Nearly 10 percent of Morocco's GDP comes 
from remittances.  In fact, Morocco's expatriate laborers provide 
the country with its largest source of foreign capital, far more 
than foreign direct investment inflows and the country's tourist 
industry.  In Morocco's northeastern Oriental region, historically 
the origin of the largest number of MREs, remittances make up such a 
large source of cash that the average bank savings account is nearly 
ten times the national average. Remittances have also helped offset 
the country's trade deficit in recent years and have kept Morocco's 
currency, the Dirham, relatively stable. 
 
¶4. (SBU) At the micro level, remittances are primarily used to 
support household consumption.  A recent World Bank report details 
the role of remittances in the reduction of poverty in Morocco, 
discussing their use for household expenditures on education, 
healthcare, and small-scale investment in local businesses. 
Morocco's expatriate laborers are also the largest overseas 
contributors to the Casablanca Stock Exchange, accounting for 71.5 
percent of foreign investments in the Exchange. 
 
-------------------- 
The Crisis Hits Home 
-------------------- 
 
¶5.  (SBU) The reprecussions of the slowdown of remittance flows on 
overall economic activity and government finances are becoming 
evident.  Analysts such as Abderrahim Bouazza, Head of Banking 
Supervision at the Bank Al-Maghrib (Morocco's central bank), concede 
that the falling remittances will increase the strain on Morocco's 
foreign exchange reserves and add to the current account deficit. 
According to estimates from the Ministry of Economy and Finance, 
remittances will fall 15 percent from USD 6.8 billion in 2008 to an 
estimated USD 5.5 billion in 2009.  This decline in remittances is 
equivalent to 1.6 percent of the Kingdom's USD 90 billion GDP. 
Nabila Freidji, a Western Union Executive, predicted to EconOff that 
remittances would not begin climbing until the third quarter of 
¶2010. 
 
--------------------------------------- 
Government Efforts to Boost Remittances 
--------------------------------------- 
 
¶6.  (SBU) Mindful of remittances' critical role in the national 
economy, Morocco's "Strategic Watch Committee," established to keep 
track of and propose remedies to the impact of the global economic 
crisis, recently announced a series of new measures aimed at 
propping up declining transfers from MREs.  These include lowered 
fees on money transfers until the end of 2009 and state-guaranteed 
funds to help low-income expatriates acquire housing units.  In 
addition, the government has created a fund to encourage Moroccans 
to invest in their home country, by which the state would invest 10 
percent of the total costs of an investment project, leaving 25 
percent to be funded by the expatriates themselves and the remaining 
65 percent to be financed by banks. 
 
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Comment 
------- 
 
¶7.  (SBU) The Moroccan "exception" to the global economic crisis 
(Reftel) is under strain, as the downturn in key regions like Europe 
undermines some of the country's most important contributors to GDP 
growth and its balance of payments. Satisfactory economic growth 
this year appears certain thanks to a likely record agricultural 
harvest, but a continuation into next year of the current anemic 
level of remittances would substantially increase the likelihood of 
Morocco dipping into recession. 
 
MILLARD