FOM Newsletter October 2001
Morocco Week in Review
 October 20,  2001

Morocco outlined Tuesday before the fourth international forum on urban poverty, opened Tuesday in Marrakesh, its strategy meant to reduce poverty in urban and pre-urban areas. In a report to the forum, Moroccan town planning, environment, urbanism and housing minister, Mohamed El Yazghi, said poverty in Morocco worsened over the few past years, despite efforts that helped, however, improve some social indicators. The report imputes the worsening of poverty to the instability of investment flows, fluctuation of exchange rates, increase in dollar value and soaring of energy prices. The burden of external debt that weighs on the State budget, the consequences of external trade liberalization, weak growth rates not exceeding 2.3 percent over the past decade also contributed to the worsening of poverty, the report adds. 

Aware that only a genuine economic take off will reverse the trend, Morocco implemented a package of measures meant to reinforce the economy and help it adapt to changes, the report says, adding these measures relate to the financial policy, external trade, competition, investments, small and medium firms promotion and micro-loans. Based on its conviction that the struggle against poverty will not be effective without a political environment governed by democracy and freedom and based on the rule of law and the protection of human rights, Morocco intends to implement a series of legislative measures part of the anti-poverty drive, the report notes. These measures seek to curb the budget deficit and keep it below 3 percent of the GDP, ensure conditions for integration in the world economy in parallel to the implementation of the association accord with the European Union, activate the privatization process and improve public enterprises efficiency, the document says. The measures also target backing financial markets, improving internal debt management, restructuring the private sector and spurring investments, it adds. Part of the same drives, the government is determined to generalize new information technologies, enlarge the necessary infrastructures and encourage the liberalization of the sector for competition, the report says, underlining that this policy helped expand phone and internet services: nearly 3 million subscribers to mobile phones in 2000 against 29,511 in 1995, more than 1,425,000 subscribers to fixed phones against 400,000 in 1990. The number of internet users also increased to 200,000 in 2000. Social protection, medical coverage, job generation, social development, education reform, struggle against illiteracy and promotion of low-cost housing were placed on top of the priorities of this anti-poverty policy, the report says.  

All efforts are being made to ensure the success of the anti-poverty strategy, the report says, citing, in this connection, the allocation of 48 percent of the State budget to social sectors. Regarding medical coverage, the report considers that the projects of compulsory health insurance for private sector employees and of the medical coverage for people with limited income are likely to help an adequate medical coverage for 35 percent of Morocco's population. The rate does not exceed 15 percent currently. In matters of struggle against unhealthy housing, the report recalls that a budget of 1.55 billion Dirhams (US$ 140.90 million) was earmarked part of the State budget and by the Hassan II Economic and Social Development Fund in addition to foreign loans worth 830 million Dirhams ($75.45 million) Such moves helped launch a program to eradicate unhealthy housing, the report says.

Experts from the office of technical assistance of the United States department of treasury have undertaken a mission to Morocco from September 24 to October 5 to provide technical assistance to the ministry of economy, finance, privatization, and tourism and to Morocco's central bank bank al-Maghreb. The visit focused on the excess liquidity in the domestic banking system related to the successful partial privatization of Maroc Telecom earlier this year. The aim of the mission was to provide advice on strengthening the central bank's forecasting ability with regard to commercial bank reserve levels, possible adjustments to existing monetary policy instruments, and new methods for conducting open market operation. A statement of the US embassy in Morocco says the U.S. Treasury Experts noted that both Bank Al-Maghreb and the ministry of finance have implemented a series of impressive and effective reforms over the past several years in the areas of public debt management, capital market development, and monetary policy implementation. Among other achievements, these reforms have made interest rate determination more market-oriented. The visit is part of a broader program of assistance being offered by the U.S. Department of Treasury under the auspices of the U.S.-North African Economic Partnership or "Eizenstat Initiative." U.S. Treasury experts have been working with the ministry of finance and the Bank Al Maghreb over the past 18 months to build a computerized model for selecting optimal debt issuance, develop a fair, equitable and transparent pricing structure for the consolidation of small individual outstanding treasury bonds and offer advice on Morocco's sovereign credit ratings.

RABAT, Oct 15 (Reuters) - Morocco's 165.4 billion dirhams ($14.6 billion) draft budget for 2002 forecasts economic growth of 4.5 percent and an inflation rate of 2.5 percent, a finance ministry official said on Monday.  The overall budget will rise by around 0.67 percent from 164.3 billion dirhams in 2001. "The budget targets a deficit of three percent, an inflation rate of 2.5 percent and a current account deficit of around one percent," the official told Reuters. The government has forecast 2001 inflation at 2.0 percent, a 3.0 percent budget deficit and a 1.0 percent current account deficit. It also expects a 6.8 percent GDP growth in 2001 compared with stagnation in the past two years due to drought effects. "In spite of the current international situation related to the Afghanistan crisis and its expected impact on the world economy we remain optimistic," the official said. Economic indicators show the Moroccan Gross Domestic Product will continue to grow and meet 2001/2002 forecasts, he added. With a population of 30 million, Morocco has an estimated GDP of 365 billion dirhams. The 2002 budget predicted that revenue would stand at 159.5 billion dirhams while expenditure would be 165.4 billion dirhams, or a deficit of 5.9 billion dirhams, down from an estimated 6.4 billion dirhams deficit in 2001. Privatisation receipts would fall by 41.3 percent to 12.5 billion dirhams next year, from 21.3 billion dirhams in 2001. They reached a record $2.2 billion this year thanks to the sale of 35 percent of national telecoms operator Maroc Telecom to France's Vivendi Universal . Next year, the Moroccan state plans to sell stakes in tobacco firm Regie des Tabacs, car assembly plant Somaca and around 10 percent in Maroc Telecom to local and foreign investors. The cost of foreign debt will be cut in 2002 by 0.25 percent to 14.8 billion dirhams while domestic debt cost will jump by 16.5 percent to 31.8 billion dirhams, the budget figures showed. The North African country's foreign debt is estimated at $15.5 billion. King Mohammed will chair a ministerial meeting on Thursday in the northern city of Khenifra to approve the draft budget's final version, the official said. The text is then expected to be presented to the 325-seat parliament next week for debate. 

((Ali Bouzerda, Rabat newsroom, +212-37 720065 fax +212-37 722499, rabat.newsroom@reuters.com))

Spanish donation to rehabilitate Spanish architectural heritage in northern Morocco.

The Andalucian department of public works and transports will earmark 110 million Pesetas (100 Pesetas = 6.17 DH) for the rehabilitation of the Spanish architectural heritage in northern Morocco. The amount will finance the refurbishing of several lodgings and institutions in Chefchaouen, Tetuan and larache.

King Mohammed deplores developed nations' failure to live up to commitments to increase assistance to development.

Morocco's King Mohammed VI on Tuesday deplored the developed nations' failure to live up to their commitments to allot 0.7 percent of their GDP to international assistance. This came in a message, read out on behalf of the king by employment, vocational training, social development and solidarity minister, Abbas El Fassi, at the opening session of the 4th international Forum on Urban Poverty. "We deem it necessary that your encounter send a clear message to the international community to question the usefulness of adopting new recommendations at a time there is no follow up to the major international commitments geared towards alleviating poverty and extending assistance to development," the king said. He cited, in this connection, "the failure of developed nations to live up to their commitments to allot 0.7 percent of their Gross Domestic Product (GDP) to international assistance, their maintaining of protectionist measures on services and on products for which developing nations are competitive, the adoption by developed countries of a fearful standpoint in matters of indebtedness, which soaks resources desperately needed by developing countries to achieve human development in addition to a weak flow in foreign investments." 

The sovereign, who stressed the need for a south-south cooperation, called the international community to adopt a new approach, honor commitments made, and abide by the principle of acting solidarity, justice, partnership, interdependence and shared responsibility. "We have to bear in mind that in the absence of tangible results at the level of improving the living standards of the poor, the credibility of commitments and the chances of success of the urban development programs will be marred, triggering fears that the consequences entailed by the failure of such programs and poor financial means, would generate and exacerbate tension spots and violence. Likewise, the sacrifice-bearing capacity of a poor population will get eroded and their anger will grow at the widening gap between them and the rich of their countries or of the countries of the north," the sovereign said.  King Mohammed VI also warned against "unbridled globalization" that may worsen an already chronic social deficit.

Japan has donated the Hassan II foundation of the prevention and struggle against brain diseases a grant worth US$80,927. The amount is destined to purchase neuro-surgery equipment for the emergency ward at the specialties hospital in Rabat. The check was handed over to the foundation chairman at a ceremony here Thursday, in the presence of Japan's ambassador in Rabat Hiromi Sato. This assistance is part of the Japanese non-reimbursable assistance program to small local projects. Japan has co-financed some 150 local projects, in the frame of this program. Other cooperation projects, that will mainly benefit the rural world, are planned.

A Moroccan-French joint venture for the transport of international express mail has just been launched in Morocco. The venture, dubbed EMS Chronopost International Maroc, was created last March with a capital of 22.5 million Dirhams.  Morocco mail operator, Barid al Maghrib, holds 66 percent of this capital and the remaining 34 percent are held by Chronopost International, the mother company. The venture will help the Moroccan operator have a wider penetration in the European and international express mail network. The new firm seeks to reach by 2003 a market share higher than 40 percent of international traffic. The firm intends to hire 60 employees at the end of 2001 and 85 in 2003.

Amazigh, a key component of Morocco's culture, cannot be used to serve political designs, king says. 

Politics, 10/17/2001

King Mohammed VI asserted Wednesday in Ajdir, a locality in the Middle Atlas mountain province of Khenifra, that the Amazigh (Berber) culture constitutes a key component of Morocco's national culture and a rich cultural heritage, pledged to promote this culture in the frame of the enforcement of a modernist and democratic society project, and insisted that Amazigh cannot be used to serve political designs of whatever nature. The sovereign, who was delivering a speech at a ceremony during which he sealed the Dahir (royal decree) setting up and governing the Royal Institute of the Amazigh Culture, said "We want to assert that the Amazigh, which is deeply rooted in the in-depths of the Moroccan people's history, belongs to all Moroccans, without any exception, and cannot be used to serve political designs of whatever nature." 

Recalling that Morocco has been singled out, throughout ages, by the cohesion of its inhabitants, regardless of their origins and dialects, and that Morocco's inhabitants have always evidenced their firm attachment to their sacred values and resisted all foreign invasion or division attempts, King Mohammed VI said that he was keen on associating in this ceremony the representatives of the various components of the nation: political and unionist, religious and cultural, economic and associative. For this act, he said, "bears a multiple significance that goes far beyond the very purpose of the decision." "Through this act, we want, in the first instance, to express, together, our recognition of all the foundations of our common history and our national cultural identity, that is imbued by multiple, varied contributions," he said. "The plurality of the streams that forged our history and shaped our identity is an integral part of the unity of our Nation, united around its sacred values and its intangible foundations, namely holy and tolerant Muslim religion, defense of the homeland's unity and integrity, allegiance to the Throne and to the King, and attachment to the constitutional, democratic and social kingy," the sovereign said. 

King Mohammed VI, who underlined that the promotion of the Amazigh is a national responsibility, said the Royal Institute of the Amazigh Culture will, through the fulfillment of its mission, give a new momentum to this culture as a national richness and a source of pride for all Moroccans. The Institute will see to preserving and promoting the Amazigh culture and consolidating its rank in the Moroccan national educational, socio-cultural and media space. King Mohammed VI had announced the setting up of the Royal institute last July in the Throne Day speech. The sovereign had then said the institute would preserve and promote this culture and participate, along with concerned ministerial departments, in conceiving and following up the process to integrate the teaching of the Amazigh language in the Moroccan educational system. The institute will also propose appropriate policies to consolidate the rank of Amazigh in the national social, cultural and media space as well as in the local and regional affairs, King Mohammed VI had said.

The first international light and sound show will be held in Casablanca in June 2002. The show, meant to be an outstanding technological forum, will display latest innovations in matters of electronics, cinema, video games, internet and all forms of audio-visual productions. Lectures and roundtables, moderated by Moroccan and foreign experts, are scheduled to be held on the sidelines of the exhibition.

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