VZCZCXYZ0005
PP RUEHWEB

DE RUEHRB #0651/01 2081434
ZNR UUUUU ZZH
P 271434Z JUL 09
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 0507
INFO RUCNMGH/MAGHREB COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0523
RUEHRL/AMEMBASSY BERLIN 0701
RUEHBS/AMEMBASSY BRUSSELS 3207
RUEHBY/AMEMBASSY CANBERRA 0131
RUEHJA/AMEMBASSY JAKARTA 0441
RUEHME/AMEMBASSY MEXICO 0087
RUEHMO/AMEMBASSY MOSCOW 0447
RUEHNE/AMEMBASSY NEW DELHI 0117
RUEHOT/AMEMBASSY OTTAWA 0709
RUEHSA/AMEMBASSY PRETORIA 0266
RUEHRH/AMEMBASSY RIYADH 0718
RUEHSM/AMEMBASSY STOCKHOLM 0233
RUEHTC/AMEMBASSY THE HAGUE 0910
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS RABAT 000651 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EEB/IFD/OMA AND NEA/MAG 
 
E.O. 12958: N/A 
TAGS: EFIN ETRD ECON MO
SUBJECT: MOROCCAN MINISTER OF FINANCE AND G20 COMS 
EMPHASIZE FREE TRADE IN ADVANCE OF LONDON MINISTERIAL AND 
PITTSBURGH SUMMIT 
 
REF: RABAT 0642 (NOTAL) 
 
¶1.  (SBU) Summary:  On July 22, the Minister of Economy and 
Finance and the British Ambassador organized a working lunch 
for G-20 ambassadors and charges to discuss the impact of the 
world economic crisis on Morocco, as well as individual 
countries' and collective responses to the crisis.  The 
Minister stressed that while some Moroccans would like to 
return to a closed economy, there would be no going back.  He 
and several chiefs of mission warned of the dangers of 
protectionism and called for a successful conclusion of the 
Doha Round, with expanded market access, reduced subsidies 
and continued globalization.  The Minister suggested that the 
IMF consider longer repayment periods.  He emphasized that 
crisis management would not end the economic crisis; only 
renewed confidence and growing trade would resolve the 
world's economic problems.  The Italian Ambassador 
highlighted the importance of reducing the cost of funds 
transfers.  Several ambassadors and charges called for 
changes in IFI governance.  End Summary. 
 
¶2.  (SBU) Minister of Economy and Finance Salaheddine Mezouar 
launched the discussion with an overview of Morocco's 
response to the global financial crisis and of the state of 
the Moroccan economy (reftel).  Mezouar underscored the 
danger of protectionism.  He urged all countries to continue 
their efforts to maintain and bolster confidence, asserting 
that is the only way to bring an end to the crisis. 
 
¶3.  (SBU) Turning to Morocco's current situation, he said 
Morocco continues its economic reforms and poverty reduction 
efforts.  The Moroccan financial sector has not been 
affected.  Moroccan exporters, however, have suffered, with 
the exception of the aeronautics industry.  In response, the 
Government is providing direct aid to affected industries. 
In general, Morocco's economy looks healthy, with at least 5 
percent growth, less than 2 percent inflation, and a budget 
deficit equivalent to less than 2.5 percent of the gross 
domestic product in 2009.  Balance of payments issues are a 
growing concern (reftel). 
 
¶4.  (SBU) Turning to the G-20 and international financial 
institutions, the Minister expressed concern about continued 
contraction in Europe in 2010 and about lower income 
countries' ability to repay the IMF.  He opined that IMF 
loans with two years grace and three years repayment presume 
a quick return to robust economic growth.  The G-20, IMF, 
World Bank and other regional development banks need to 
ensure sustained levels of assistance and investment if 
growth is to become a reality.  Aid must not be a zero-sum 
game. 
 
¶5.  (SBU) For his part, British Ambassador Timothy Morris, 
who had been urging the GOM to meet with G20 chiefs of 
mission since before the London summit, focused on the 
summit's conclusions:  assuring necessary resources, avoiding 
protectionism, enhancing surveillance and international 
cooperation, and addressing climate change.  He noted that if 
the British economy continued to contract at the present 
rate, it would not even exist in ten years. 
 
¶6.  (U) Many other Chiefs of Mission commented on a wide 
range of financial issues.  Although all G20 countries that 
have embassies in Rabat, i.e., all except Australia, plus the 
Netherlands, Spain, the World Bank and the European Union, 
participated in the luncheon, only the representatives of 
Argentina, Brazil, Canada, France, Germany, Italy, Japan, 
Mexico, Saudi Arabia, South Africa, South Korea, the 
Netherlands, Spain, the UK and the U.S. spoke. 
 
 
¶7.  (SBU) Key themes: 
 
-- G-8 Initiatives:  Italian Ambassador Umberto Lucchesi 
spoke of the G8's focus on Africa and on food security. 
Japanese Ambassador Haruko Hirose described her government's 
determination to double Japanese assistance to and investment 
in Africa between 2005 and 2012.  She also focused on the 
importance of renewable energy.  Canadian Ambassador Michelle 
Levesque described Canadian efforts to reduce taxes and 
create employment.  She said that her government recognized 
that some sectors will not recover.  Charge reported on U.S. 
commitments to provide capital to the international financial 
institutions and regional development banks, to increase 
development assistance and promote food security.  Charge 
also noted that the USG is investing the equivalent of five 
percent of its GDP to combat the crisis. 
 
-- Transfers and Remittances:  The Italian Ambassador also 
highlighted the importance of reducing the costs of 
transferring funds internationally from 10 to 5 percent. 
 
-- IFI Governance:  Brazilian Ambassador Virgilio Moretzsohn 
de Andrade described G15 attitudes, emphasizing that the G15 
was pleased that governance of the international financial 
institutions was being addressed for the first time.  He said 
that the system for choosing the heads of the World Bank and 
IMF must change.  Finally, he blamed the developed countries 
for causing the global crisis.  Argentine Charge Pablo 
Pinheiro Aramburu also raised institutional reform and 
"justice."  South Korean Ambassador Choi Jai-Chul stressed 
that emerging and developing countries must be heard.  South 
African Charge Nithutang Martin Seleka called for more 
African involvement in making decisions that affect the 
continent.  The Saudi Charge called for supervision of hedge 
funds and enhanced financial monitoring of the international 
financial system.  Spanish Ambassador Luis Planas-Puchades, 
who privately told Charge how pleased Spain is to have been 
invited to the G20 Summit in Pittsburgh, called for greater 
international coordination.  German Ambassador Ulf-Dieter 
Klemm said that credit agencies must improve their 
performance.  Charge noted U.S. willingness to make the IMF 
and the World Bank more efficient and more representative. 
 
-- Doha Round, Market Access and Protectionism:  Pinheiro 
Aramburu was the first to discuss the importance of 
increasing market access and ending agricultural subsidies 
through the Doha Round.  The South Korean Ambassador 
underscored the importance of avoiding protectionism.  Dutch 
Ambassador Jos Van Aggelen called for an open trading system, 
saying that globalization must continue.  Ambassador Klemm 
reported that Germany had seen exports fall by up to 50 
percent in some sectors; nonetheless, he said protectionism 
must be avoided. 
 
-- Praise for Morocco:  French Ambassador Jean-Francois 
Thibault praised Morocco's reforms and financial management 
and highlighted Renault's finalization of plans for a new 
manufacturing facility in Tangier.  Charge also praised 
Morocco's reforms. 
 
¶8.  (SBU) The Minister of Finance concluded the discussion, 
declaring that that a lack of regulation and management had 
led to the crisis; international financial institutions must 
indeed reform; and, asserting that moral responsibility is 
real, governments must acknowledge that budget deficits and 
high unemployment have consequences for other countries.  He 
opined that transformation rather than crisis management is 
required.  Noting that world trade has plummeted 12 percent, 
restructuring is the only way to ensure a return of 
confidence.  Comparing commerce to oxygen, he said financial 
 
 
 
injections alone cannot end the crisis.  Focusing on 
Morocco's free trade agreements, Mezouar said the real 
benefits were from investment and from a change in domestic 
attitudes, i.e., an opening.  He again underscored that 
Morocco would continue to implement reforms and exercise 
monetary vigilance. 
 
¶9.  (SBU) Moroccan Treasury Director Chorfi said that Morocco 
has attempted to adopt the best international economic and 
financial practices.  It is an open, transparent country.  He 
hoped that the G20 discussion could be a model for future 
donor coordination and transparency. 
 
 
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Visit Embassy Rabat's Classified Website; 
http://www.intelink.sgov.gov/wiki/Portal:Moro cco 
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Jackson