FOM Newsletter July 2003
Morocco Week in Review 
July 12 2003

Morocco will remain "a strategic partner" for the USA, said Margaret Tutwiller, US ambassador in Morocco in an interview published this Friday by Moroccan dailies "Le Matin du Sahara et Du Magrheb" and "Assahra Al Maghribya." After she pointed to "considerable progress" in negotiations between the two countries for a free-trade agreement, the US diplomat said Morocco will become a model to be followed for other countries that will seek to learn from its experience and from the working method of its negotiators, mainly as regards drafting laws associated with the agreement.  She went on that two weeks ahead of the fourth round of negotiations, slated in Washington, the two negotiating teams -divided into 11 working commissions- have already lowered several constraints. After she acknowledged that the agriculture aspect is "sensitive and complex," the US diplomat insisted that the agreement advantages will be more numerous than its handicaps, underscoring the two countries' leaders will to conclude the agreement the soonest.  She also noted that Morocco ranks top among the US friend countries that successfully embarked on the path of reforms, modernization and economic liberalization.

Morocco and the USA enjoy more than two centuries of friendship and have not waited for the 9/11 events to consolidate their relations, said Tutwiller who also renewed the US administration's commitment to develop its multi-sector support to Morocco.  There are several indications that since September 11, there is an increased US interest for Morocco, she went on, citing as an example efforts to conclude a Morocco-US free trade agreement and bilateral cooperation in parliamentary and military fields.

A Moroccan official delegation has met on Thursday over one hundred Portuguese enterprises to talk them into opening businesses in the free zone in the Moroccan northern city of Tangiers, reassuring them that all arrangements were taken to help businesses succeed. The Moroccan executives told Portuguese entrepreneurs about the attractive business environment in Morocco, measures taken to end red tape, endeavors to promote the market economy and the presence of a skilled labor both in traditional sectors and in the new information technologies. The personal commitment by King Mohammed VI to improve investment conditions, the Moroccan-Portuguese joint will to establish true partnership and other advantages associated with geographic proximity, safety and upgraded economic competitiveness were other assets cited by the Moroccan officials.

Morocco is in the process of creating a free-trade zone with the EU and is negotiating a free-trade agreement with the USA, said Moroccan ambassador, Salheddine Tazi, who also stressed that the kingdom is endeavoring to enhance the competitiveness of its economy and make it more modern and more adapted to globalization needs. Portuguese entrepreneurs were also called to follow suit to 60 Portuguese enterprises already present in Morocco and drawing benefit from the kingdom's fiscal, real estate and customs incentives. The Tangiers Free Zone, chosen by 6 Portuguese firms, was the focus of this work session that surveyed the industrial skills it harbors, mainly in car making. The Tangiers Free Zone is a genuine hub and interesting industrial platform with the set of fiscal and customs advantages it offers for agri-food, textile, leather, metallurgic, electric and electronic companies wishing to relocate their activities, says the FTZ general manager.

KUWAIT CITY, Jul 07, 2003 (AP WorldStream via COMTEX) -- The Arab Fund for Economic and Social Development extended a 20 million dinar (US$66.66 million) loan to Morocco on Monday. The Kuwait-based fund said in a statement that the money will partially fund a project to provide electricity to villages in the North African country. According to the agreement, which was signed in the Moroccan capital Rabat, the government will have 20 years, including a five-year grace period, to repay the loan at an annual interest rate of 4.5 percent. The fund has now loaned Morocco 558.9 million dinars (US$1.86 billion).  

Copyright 2003 Associated Press, All rights reserved

RABAT, July 05 - More than 86% of swimming waters in Moroccan beaches meet hygiene standards, against 72% last year, says the national report of water quality control released this week. The report makes conclusions on the basis of samples taken from some 412 sampling locations on 79 beaches between easternmost Saidia and southern Dakhla. These divide into three main zones: 120 beaches from Saidia to Tangiers (Mediterranean zone), 238 from Tangiers to Essaouira (north Atlantic) and 54 from Agadir to Dakhla (south Atlantic). Morocco's departments in charge of environment and of equipment and transport made the assessment, part of a clean beaches campaign, accordingto directives of the World Health Organization (WHO) and the United Nations Environment Program. The survey also found that 42 sampling locations are not fit for swimming, which makes 13.4% of surveyed locations against 27.72% last year. The organizers of the campaign, who ambition to reach 100% quality waters at the national level, called involved parties to join efforts to achieve it. According to organizers, this annual campaign has a particular importance as Morocco is set to launch this year the European "Blue Pavilion" Label. Blue Pavilion is an ecological quality label attributed by the International Federation of Environment Education, a NGO represented in Morocco since July 2002 by the Mohammed VI Foundation for Environment Protection. © MAP 2003

Moroccan, Spanish FMs dedicate Spanish center, hospital maternity ward in Tetuan

Moroccan foreign minister, Mohammed Benaissa, and his Spanish peer, Ana Palacio, who started Friday a visit to Morocco at the head of an official delegation, dedicated in the northern city of Tetuan the maternity ward of the city's Spanish hospital and the newly refurbished Cervantes Spanish cultural center. Director of the Cervantes centers network told reporters Spain is projecting to open more of these centers, particularly in southern Morocco, in order to foster intellectual exchanges between the two countries. He added that his institution will also enhance its role as an intermediary between Moroccan writers and Spanish publishing companies. He further noted that the center whose refurbishment cost 1.2 million Euro ? 1920, comprises eight classrooms, an exhibition and conference hall, a library containing 16,000 books. In 2002-2003 school year, some 1,400 persons took Spanish classes in the center that also organizes other cultural activities. During the dedication ceremony of the maternity ward of the Spanish hospital, Benaissa voiced the Moroccan government's gratitude to Spain for its support of social projects, saying that the project must lead the way to similar ones across Morocco. Spain, he said, understands perfectly the situation in Morocco, which in turn is aware of Madrid's role within the European Union, especially within the Mediterranean part of it. The Spanish foreign minister praised the creation of the maternity ward which, she said, is part of Morocco's program "safe motherhood," launched back in the 90s.  Ana Palacio announced that a cooperation program is being developed to provide medical equipment to hospitals in northern Morocco. Following the dedication ceremony, the Spanish foreign minister extended Isabelle the Catholic distinction, post mortem, to Ignes Barbara who served as a doctor at the Tetouan Spanish hospital, before dying in a road accident. The maternity ward, worth some 4.7 million Euro, has a 2,000 women annual capacity, with two delivery rooms and two surgery pavilions. It has 40 beds and is equipped with state of the art medical equipment for complicated births.

Electrification of Morocco's rural areas is expected to reach a rate 70% in 2004 when the General Rural Electrification Program (PERG) will have reached its third phase, said minister of energy and mining, Mohammed Boutaleb. Speaking at the signing ceremony of two loan agreements extended by the Arab Fund for Economic and Social Development (AFESD) to Morocco for the extension of Morocco's electricity grid, Boutaleb said the PERG 2002-2004 phase will necessitate some 4 billion Dirhams (nearly US$ 400 million). The minister added that the fourth phase of the PERG will be divided in two stages. In the first phase, extending between 2004 and 2006, electricity will be supplied to villages that will have met the 20,000 Dirham (US$ 2,000) per home payment ceiling. In the second stage, running between 2006 and 2007, villages that will have met the 27,000 Dirham (US$ 2,700) per home payment ceiling will be connected, including 157,000 homes that will be fitted with solar panels. Boutaled was upbeat that all the country's regions will be connected to the electric grid by 2007.

France is still a key market for Moroccan tourism and it was not affected by the tragic events of May 16 in Casablanca, Morocco's ambassador to France, Hassan Abouyoub, told a Paris radio station. All the rumors that circulated after the terrorist attacks were unfounded and Moroccan tourism will witness an exceptional summer this year, Abouyoub stressed, underlining that the return of Moroccan expats to their homeland for the summer holiday is taking place in the best conditions. Asked about the number of Moroccan expats living in France, which hosts the largest Moroccan community abroad, Abouyoub underscored that different sources indicate that it ranges between one million and one million and a hundred thousands persons. "This figure might be stunning because we often do not include the Jewish community of Moroccan origin which is very important," he noted.  In this connection, Abouyoub stressed that several members of the Moroccan Jewish community decided to go to Morocco this summer to show to the whole world that they are still attached to their home country. The diplomat recalled that Morocco's consulates have modernized their working systems to reinforce communication with the Moroccan community in France.

RABAT, July 08 (MAP)- The Hassan II Fund for Economic and Social Development has earmarked 595 million dirhams, nearly US$ 64 million, in support to various industrial development projects in the country. The support, made available to the ministry of industry, trade and telecoms, is taking various forms (partial financing, land purchase, construction of premises) that will help carry out investment projects in the fields of electronics, car sub-contracting, textile, leather and environment-protection actions. According to figures released by the ministry, the Hassan II fund has extended, as at last June, a total of 120 million DH (US$ 13 million) in support to 53 projects worth 1.7 billion DH (US$ 184 million) and scheduled to generate 18,000 jobs. MAP 2003

BRUSSELS, July 8 (Reuters) - The European Union may soon reach a deal on agricultural trade with Morocco, ending a saga of haggling over preferential market access for cereals and tomatoes, EU officials said on Tuesday. The talks have been deadlocked for around three years, mainly over EU reluctance to increase Morocco's export quotas of fresh farm products -- mostly tomatoes -- and Morocco's desire to limit its cereals imports from the 15-nation bloc. Now there may be some hope of reaching an agreement this month, although cereals remain a major hurdle. The talks are part of a 1995 partnership accord aimed at a gradual dismantling of barriers between the EU and Morocco by 2012. "This problem has been dragging on for years. We would like to wrap this up by the end of this month, hopefully to enter into force on October 1," said an official at the European Commission, the EU's executive. "There seems to be a deal emerging on tomatoes." Morocco now exports some 150,000 tonnes of tomatoes a year to EU countries, virtually free of duties. The proposal under discussion would be for this to increase over four years to an annual 220,000 tonnes, under the same tariff conditions.  Morocco's demands for higher export quotas of fresh products clash with the interests of Spain, just across the sea from Morocco, a major tomato and citrus supplier to EU countries. Spanish farmers, along with their counterparts in France and Portugal, fear their traditional markets will be flooded with cheap imports. "The Moroccan negotiators have gone back to consult, there will be some contact this week and hopefully we can fix a new date for a meeting, probably in Morocco," said another official.  

CEREALS STILL TRICKY

The main sticking point in the talks is still the cereals sector, where Morocco is a major importer from the European Union and consequently a key player on the international grain market. Morocco has suggested a tariff rate quota (TRQ) for its annual cereals imports from the EU, which currently sends 1.6 million tonnes to the North African country, the official said.  "What Morocco is proposing is a TRQ for 800,000 tonnes at a tariff of 25 percent. We feel this is not good enough as our traditional exports are double that," he said. "We are ready to give ground on tomatoes, but they have to give way on cereals." "They currently charge a 135 percent tariff (on wheat) -- they've kept the market very closed," the official told reporters. Morocco's cereals purchases in the marketing year that ended in May reached 4.13 million tonnes, more than half of which was soft wheat. In this period, France supplied nearly a quarter of Morocco's total needs, then Russia with 15 percent and Ukraine with 12 percent, according to the state cereals authority. Apart from cereals and tomatoes, other important products in the EU's farm trade with Morocco include the bloc's dairy and livestock exports, and its imports of oranges and clementines. ((Reporting by Jeremy Smith, editing by Anthony Barker; jm.smith@reuters.com ; Reuters Messaging:  jm.smith.reuters.com@reuters.net ; +32 2 287 6834))

Children Rights Code Given More Efficiency with Coercive and Dissuasive Clauses

RABAT, July 09 - The new children rights code was drafted in a way that repairs some loopholes and will be given more efficiency with a train of coercive and dissuasive clauses it contains, said secretary of state in charge of family, solidarity and social action, Yasmina Baddou. The official who was interviewed by "Aujourd'hui le Maroc" daily explained that compulsory schooling and the ban of children labor was among the new measures introduced in the code. She also cited among the loopholes the situation of girls working as maids and the absence of protection for children who are ill-treated by a member of their family. For Baddou, the goal of the new law is to protect children rather than taking them out of the authority of parents, a pillar of education. The new text needs material and human support means, mainly institutions, host families, a legal status for social workers and for associations active in children issue, she stressed adding that her department is precisely working on these issues in parallel to drafting the text. MAP 2003

Government surveys to expose quality of service; 53% satisfied with customs services

A rate of 52.3% of customs users said they are "very satisfied" with customs services, according to findings of a survey made public on Monday by general manager of the Customs and Indirect Taxes Administration, Abderrazak Al Mossadaq.  The survey, conducted with 1,018 customers, including 726 enterprises, and 391 customs-clearing agents, also finds that 28% of the polled are "satisfied" with these services, with variations according to the kind of services.  "Customs control procedures" were deemed satisfactory by 88% of those polled, while "goods checking methods" were described as satisfactory by 90%. 93% of respondents said they are satisfied with the customs-clearing duration (that presently stands at 40mn) and 85% were satisfied with "the use of customs-clearing halls and areas."

The survey also covered airports customs, with less than 5% out of the 10,862 polled passengers (5,231 at arrival terminals and 5,631 at departure terminals) saying they have encountered difficulties.  Meantime, Morocco will launch an e-customs system dubbed BADR (Automated Base of Customs Online) to grant users easier access from any internet-connected computer, the Administration of Customs and Indirect Taxes (ADII) said. The new system is based on computer technologies like those used in e-commerce, which grant customers and customs agents simple access to data with the means of a simple internet browser, without having to move to ADII offices, Director General of the administration, Abderrazak El Mossadeq, said at a press conference Monday. The project will be developed over three phases and four years.  

http://www.arabicnews.com/ansub/Daily/Day/030709/2003070924.html 

Morocco has 4,277 cooperatives with a $ 800 million capital

Morocco has 4,277 cooperatives, mustering 267,466 members, with an overall capital of 6.7 billion Dirhams (US$ 800 million), according to 2002 statistics released by Morocco's office of cooperation development. A total of 2,662 of Moroccan cooperatives operate in agriculture, 798 in housing and 517 in handicraft. The three sectors account for 96% of cooperatives.  Women cooperatives are numbered at some 261, which represents 6% of the total number. Youth cooperatives are estimated at some 228 (5%).  

http://www.arabicnews.com/ansub/Daily/Day/030709/2003070920.html 

EU investment bank lends Morocco 14 million euros

BRUSSELS, July 9 (KUNA) -- The European investment bank (EIB) said Wednesday it was providing a 14-million-euro loan to repair and upgrade breakwaters and quays, along with improvement of operational safety of five ports in Morocco.  The Luxembourg-based EIB, the European Union (EU) financial instrument, said in a statement, available here, the funding would improve services in ports of Tangiers, Larache, El Jadida, Essaouira and Sidi Ifni.  This is the fifth loan by the EIB for Moroccos ports sector. The upgrading project is part of Rabats national economic and social development plan 2000-04. "The development of port infrastructure is essential to the countrys economy in terms of both facilitating Moroccos international trade and fostering the activity of private companies in the fisheries and logistic sectors," said EIB vice-president Philippe de Fontaine Vive. He voiced belief the project would honor objectives of the new facilities in the ports for the euro-Mediterranean investment and partnership. Such partnership aimed at promoting private sector development and support projects helping to create a propitious climate for private investment. The EIB has been involved in EU-Morocco financial cooperation since 1978. since then, the bank extended some 2.5 billion euros for major ventures pushing the development of Morocco's economy.

Over 400,000 people benefit from nationwide literacy campaign

The Nationwide literacy campaign dubbed "Massirat Ennour (March for light)," launched in Morocco end of last May, benefited some 431,544 persons, said state secretary in charge of literacy and informal education, Najima Rhozali Tay Tay.  Rhozali also noted during a debate aired Tuesday by Morocco's TV channel "TVM" that "Massirat Ennour" is part of a long-run vision that targets to reach 1.5 million persons next year. The official ascribed the weak results of past years literacy campaigns to pedagogical reasons, lack of means, infrastructures and supervisors, in addition to programs' incompatibility with people's needs. She also deplored the quasi-total absence of enterprises' support to literacy programs and the "weak contribution" of the civil society and governmental partners, underscoring that a national symposium on the issue is scheduled in October with the collaboration of the World Bank. The prime minister had stressed that the campaign marks the start of a battle against illiteracy and school dropping, noting that after 47 years of independence, illiteracy has only slightly regressed. He cited "alarming and shocking figures" that 12 million Moroccans are illiterate, particularly women (3 out of 5) and in rural areas (2 out of 3). The 2003 literacy campaign, an endeavor of the whole society, consists of four programs: the general campaign that will target 570,000 beneficiaries, a program by public bodies for 146,000 persons, activities by associations for 269,000 persons and the plan carried out by private enterprises for 15,000 recipients.

The new children rights code was drafted in a way that repairs some loopholes and will be given more efficiency with a train of coercive and dissuasive clauses it contains, said secretary of state in charge of family, solidarity and social action, Yasmina Baddou. The official who was interviewed by "Aujourd'hui le Maroc" daily explained that compulsory schooling and the ban of children labor was among the new measures introduced in the code. She also cited among the loopholes the situation of girls working as maids and the absence of protection for children who are ill-treated by a member of their family. For Baddou, the goal of the new law is to protect children rather than taking them out of the authority of parents, a pillar of education. The new text needs material and human support means, mainly institutions, host families, a legal status for social workers and for associations active in children issue, she stressed adding that her department is precisely working on these issues in parallel to drafting the text.

STMicroelectronics, ONE, Eurinvest group, major investment conventions signed in Rabat

The Moroccan government signed this Wednesday three major investments conventions worth 2.9 billion Dirhams (US$ 306 million) with foreign private companies operating in micro-electronics development and design, natural gas-generated electricity and retail services. The first convention signed with French-Italian company STMicroelectronics (formerly SGS-Thomson Microelectronics), worth 100 million DH (US$ 10.5 million) provides for the creation of a center for the development of integrated circuits and software. The state has donated the company a 2.7 hectare land plot for the center that is expected to hire a total of 500 engineers, technicians and administrative staff. Under the second convention, worth 2.6 billion DH (US$ 273 million), the Moroccan electricity board (ONE), Italy's Endesa and Siemens Projects Ventures will cooperate to produce electricity generated by natural gas in the plant of Tahaddart (northern Morocco). The third convention, signed with Eurinvest group, provides for the opening in Morocco of 15 do-it-yourself shops of the French "Bricorama" group. The project, worth 200 million DH (US$ 21 million) will generate 300 jobs. The prime minister praised the investors' creativity and choice of Morocco and said the government is ready to support them all along the projects inception process.

RABAT, July 10 (Reuters) - A suspected Islamic militant stabbed and wounded seven people at a campsite in the Moroccan tourist resort of Agadir on Thursday, government officials said. The assailant then committed suicide by slitting his throat. The incident came nearly two months after suicide bombings in Morocco's economic capital Casablanca killed 44 people, including several Europeans. The government has blamed the blasts on Islamic militants with indirect links to al Qaeda. Thursday's attack occurred at Agadir's Camping International and left four women and three men, all Moroccan, with stab wounds, an Interior Ministry official said. The campsite's assistant manager, who asked not to be named, said the assailant jumped over a fence shortly after midnight and stormed into the campsite's restaurant. "It was empty at this hour; he attacked three waiters who tried to stop him, others came to help overpower him," he said quoting witnesses. "That's when he sat down and slit his throat, just as you would do with a lamb". He said one waiter was seriously injured and remained in hospital while the others were discharged. The Interior Ministry official said when asked if the attacker was an Islamic militant: "all the elements point in that direction". He said the assailant was aged 21 and sold religious books outside a mosque in Dcheira, on the eastern outskirts of Agadir. Agadir, about 600 km (375 miles) south of the capital Rabat on the Atlantic coast, is among the North African Muslim country's top tourist destinations and favoured by French and German holidaymakers. ((Reporting by Souhail Karam, writing by Gilles Trequesser; Reuters Messaging: gilles.trequesser.reuters.com@reuters.net; +212-37 720065))

Jul 10, 2003 (Al-Bawaba via COMTEX) -- The European Investment Bank (EIB), the European Union's financing institution, is providing 14 million euro ($15.88 million) to the Kingdom of Morocco for the repair and upgrading of breakwaters and quays, along with the improvement of operational safety, at five of the country's ports: Tangiers, Larache, El Jadida, Essaouira and Sidi Ifni.  The works will be carried out by the Ports Directorate of the Ministry of Equipment, Housing and Town and Country Planning. The project forms part of the Kingdom of Morocco's National Economic and Social Development Plan 2000-2004. Commenting on the operation, EIB Vice-President Philippe de Fontaine Vive said: "This is the fifth loan made available by the EIB for Morocco's ports sector. The development of port infrastructure is essential to the country's economy in terms of both facilitating Morocco's international trade-98 percent of which passes through its ports-and fostering the activity of private companies in the fisheries and logistics sectors." "I therefore believe that this project chimes perfectly with the objectives of the new Facility for Euro-Mediterranean Investment and Partnership (FEMIP) launched by the Bank last October, one of whose priorities is to create an environment favorable to the growth of private enterprise," he added.  

Set up following the Barcelona European Council of March 2002 and inaugurated in October 2002, FEMIP's top priority is to promote private sector development-especially small- and medium-sized enterprises (SMEs)-and support projects helping to establish a propitious climate for private investment, including economic infrastructure, health and education schemes. Endowed with 8-10 billion euro up to end-2006, FEMIP's ultimate goal is to help the Mediterranean Partner Countries (MPC) meet the challenges of economic and social modernization and enhance regional integration in the run-up to the creation of a Euro-Mediterranean free-trade area planned for 2010.  Between October 2002 and May 2003, new operations worth over 1.5 billion euro were approved under FEMIP, more than 35 percent of which targeting private sector development. - (menareport.com) By Mena Report Reporters (C) 2003 Albawaba.com, All rights reserved.

RABAT, July 11 - Oliver Stone's film entitled "Alexander" will be shot as to September 22 in Marrakech, Essaouira and El Jadida (southern Morocco), producers announced. Twenty Seven year-old Irish actor, Colin Farell, will play the leading part in the Euro 150 million-worth historic film, that is a European joint venture grouping British, French, Irish and Moroccan actors. In 1990, the film's director, Oliver Stone, had already decided to shot the film in Morocco which is "the only country that offers the required geographical diversity." "Morocco has the same cinema conditions as Los Angeles or California," film producer, Thomas Schilly, underlined, stressing that "when Morocco will have adequate studios for films' production, all the required conditions would be there to make it an important location for movies and television production in the world scale."  Alexander's director and producer further noted that they are "impressed" by the skills of Moroccan technicians and actors that are collaborating in the movie.  Oliver Stone's version of Alexander the Great's life, is due in the United States in November 2004. MAP 2003

MFree Trade Agreements with US and EU, An Opportunity to Emphasize Morocco's Assets

RABAT, July 10 - Morocco's projected free trade agreements with the United States and the European Union are an encouraging framework for Morocco to emphasize its investment assets, said here Thursday Moroccan delegated minister of foreign affairs and cooperation, Taib Fassi Fihri. Moroccan communication minister and spokesman for the government, Nabil Benabdellah, said at a press briefing following a meeting of the government council Thursday that Fihri made an exposé on Morocco's ongoing free trade talks with the US and the EU.  Fassi Fihri, who also serves as chief negotiator with the USA, said "the agreements, which have strategic and political importance, will open genuine perspectives for the national economy." These agreements, he went on, are in line with H.M. king Mohammed VI's directives to diversify the kingdom's economic partners, liberalize trade, upgrade Moroccan enterprises' competitiveness and improve commerce and investment conditions, adding that the currently negotiated free trade agreements are also an encouragement to the reforms undertaken in Morocco. The US agency charged of free trade talks with Morocco had explained before the US congress that Morocco was chosen for its commitment to consolidate the rule of law and carry out political and economic reforms, its market economy bases and the US decision to expand its trade network according to a selective and strategic approach, Fihri said, adding that Morocco is "officially viewed as a reference for other Maghreban countries in matters of economic reforms, and a locomotive for market economy and democratic reforms in the Arab world.© MAP 2003

RABAT, July 10 (Reuters) - Morocco, one of the world's main importers of cereals, wants its key agricultural sector to be dealt with gradually in free trade talks with the United States, the North African country's government said on Thursday. Morocco told the U.S. side of plans to launch structural reforms for agriculture to prepare the "strategic and sensitive sector" ahead of the implementation of a free trade accord, government spokesman Nabil Benabdellah told reporters.  He said the Moroccan chief negotiator "insisted with the U.S. party that it will be impossible to liberalise the cereals sector immediately." The United States began free trade talks with its key North African ally in January. Jordan is the only Arab country so far to have a free trade agreement with Washington. For Morocco, "the agricultural sector needs a special treatment, requiring transitory periods," Benabdellah said after a cabinet meeting. The talks, he said, are saddled with "constraints," in reference to the agricultural package.  Asked if these constraints could delay the signing of the free trade accord, he said: "We are still trying to sign the deal by the end of the year." The United States used to be the main exporter of wheat to Morocco but has gradually lost ground to the European Union, mainly France, which in turn is facing tough competition from Black Sea origins. EU officials said this week they may soon reach a deal on agriculture trade with Rabat, part of a 1995 partnership accord aimed at a gradual dismantling of barriers by 2012. But the cereals sector was a sticking point since Morocco suggested a tariff rate quota for its annual imports from the EU of 800,000 tonnes at a 25 percent duty while it imposed up to a 135 percent tariff on cereals imports, in a bid to protect local farmers expecting a bumper cereals harvest this year. The EU currently sends 1.6 million tonnes of cereals to Morocco whose annual cereals imports stand at a minimum 2.5 million tonnes and can reach up to 6.0 million tonnes, depending on weather vagaries. Half of the imports are soft wheat. ((Reporting by Souhail Karam, Reuters Messaging: souhail.karam.reuters.com@reuters.net; +212-37 720065))

RABAT, July 11 (Reuters) - Morocco hopes the success of its recent 400 million eurobond issue will convince foreign investors to put more money in the Muslim North African country. But local analysts are less confident and argue that the government must curb corruption and ensure openness in business dealings in order to attract foreign investors in the long term.  The June 27 eurobond issue was the first unrestructured operation of its kind for Morocco. Twice before had the country sought the scrutiny of international debt markets, in 1996 and 1999, but with state and international agencies' guarantees. "This success confirms the confidence that investors and international lenders have in the potential offered by our economy," Prime Minister Driss Jettou said on Thursday night. For Jettou, a technocrat appointed last October, the second quarter of the year has been nothing but good news: A bumper cereals harvest, the adoption of a more flexible labour law after 25 years of debate, a successful sale of the state tobacco firm and, finally, the eurobond issue. The agriculture-based economy is set to grow by 5.5 percent this year, apparently unscathed by the impact on the key tourism industry of suicide bombings in Casablanca in May. But little has been said publicly, even in Jettou's address to parliament on Thursday, about the drive to end corruption. Graft was cited in a survey by Berlin-based Transparency International on behalf of Moroccan businessmen as their second greatest challenge after high taxes. Another recent survey by the U.S.-Moroccan trade chamber Amcham showed that 80 percent of foreign investors see Moroccan justice as "inefficient and inclined to corruption".  

RESISTANCE TO CHANGE

Jettou has promised to reform the judicial system, tackle red tape and fight corruption, joining pledges made by King Mohammed when he was enthroned four years ago. "The government has shown good intentions although it still struggles to get rid of old demons," a Western analyst said. "There is some resistance within the higher spheres of power to the modernist drive of the government," he added. Under the late King Hassan, a secretive court of royal advisers and senior army officers, known as the Makhzen, acquired growing influence to rule in the shadows in parallel with the government. Aboubakr Jamai, editor of the independent Le Journal Hebdomadaire, acknowledged that Jettou's government has led to "a qualitative leap in the economy". "But you still have to entertain good ties with the Makhzen if you want to lead a prosperous business. This has not changed," he said. For economist and political analyst Driss Benali, past campaigns against corruption "always stopped half way through because of lobbies. Whistle-blowers do not exist in Morocco". Nadia Salah, editor of leading business daily L'Economiste, said professions on the forefront of the fight for more transparency have come under attack "from the economically viable independent press to chartered accountants". She was referring to the recent jailing of an outspoken newspaper editor and a controversy over a proposed reform that would open the accounting profession to semi-skilled professionals. Impunity is another woe, Benali said. Parliamentary inquiries into state funds and banks have revealed the embezzlement of billions of dirhams. No legal action followed. ((Reporting by Souhail Karam, Reuters Messaging: souhail.karam.reuters.com@reuters.net; +212-37 720065))

The Islamic Development Bank granted the Moroccan water company ONEP a $22.7 million loan, equivalent to DH 227 million. The loan will be used to finance the upgrade of nine urban and rural water treatment centers and their respective distribution systems. Extension work will also be added to the task. The five rural centers are those of Tata, Akka, Foum Zguid, Foum Lahcen and bi Jaad and the four urban one are those of Bouznika, Berrechid, Benslimane and Oued Zem.

Moroccan Banks to Set Up Low Interest Funds to Hotel and Garment Sectors In a drive to modernize the nation's hotel infrastructure and to improve the performance of the industrial sector , Moroccan banks agreed to make low interestfunds available to companies involved in the hotel sector and in industry, as part of the nation's upgrade program known as Mise-a-Niveau In a press release, the Moroccan bank association GPBM announced this week two special programs which carry low interest rate loans. The first is called Renovotel, short for "Renovation des Hotels" and the other is called Fortex for "Fonds de soutien aux entreprises du textile et habillement" or support fund for textiles and clothing. Companies operating in these sector are entitled to loans carrying a 4.6% interest rate. Other industries are entitled to loans with a 6.45% rate.

The Moroccan government and the nation's private institutions of higher education known as Enseignement Superieur Prive (ESP) have had rocky relations in the past years. Standards in ESP have been often disregarded so much that the administration felt it was necessary to release additional rules to "correct abuses" in the sector. The first rule was released by minister Zerouali in June 2001 to bring some level of centralization and control in the issuance of diplomas and degrees and the second rule was issued by minister Alioua on April 24, 2003 to ban the so-called Master's degree.  In spite of added regulation aimed at slowing down the uncontrolled growth of the ESPs, the sector enjoys considerable support from both students and parents.  ESPs continue to attract a growing number of students, a trend that is expected to sustain, at least until the government launches a comprehensive reform program in the public sector, in an effort to make state universities more attractive to the public.

In the meanwhile, however, students who have the financial means to attend private schools are likely to remain attracted to ESPs. The outlook for private educational institutions remains therefore positive. Between the 2002 and 2003 academic seasons, 12 new ESPs opened their doors, including 6 in Casablanca, 4 in Rabat and 2 in Oujda, bringing the total number of active schools to 107, up from 97 in 2002. Casablanca, the main business hub of Morocco is home of the bulk of these schools with 48 institutions competing for the wealthiest of the city. Rabat, the nation's capital is home of 24 such schools, and Fez ranks third with eight schools. There are 5 such schools in Marrakech and in Tangier.

For the 2002-2003 academic year, the EPS system had a total seating capacity of 23,764 places, but only 15,483 students attended these schools. Although way below their full capacity, private schools saw their student enrollment increase by 7.3%, while capacity grew by 15.3%. In comparison, the total student population in private schools is tiny compared to the 280,000 students who attended public Universities in 2002-03. Although some 42% of the student body attending private schools specialize in law, economy or social science studies, there is a wide range of topics and disciplines taught in the ESP system, from management and commerce to science, technology and pre-med. A total of 50 programs are available in Morocco's ESPs. However, the most popular curriculum is management and business administration given the employment profile and the Moroccan job market.

In spite of lack of national standards, ESPs produce relatively good quality students and the number of graduates continues to rise. In 2002 some 2,400 students successfully completed their studies against 2,352 in the previous year. In the post-graduate cycle there were 490 graduates, up 9.37% from 2001. EPSs combine a teaching body of 2,447, of whom 212 are full-time professors. This staffing level brings the student-teacher ratio to 6 to 1, while it is 28 to 1 in the public sector.

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