Virtual Magazine of Morocco on the Web
Morocco Week in Review 
August 11, 2007

MCC Approves USD 697.5Mn Poverty Reduction Grant to Morocco.
Washington, Aug. 10

The Millennium Challenge Corporation's Board of Directors has approved a five-year, USD 697.5Mn Millennium Challenge Compact with the Kingdom of Morocco, an MCC press release announced Thursday. The largest grant MCC has awarded to date, the Compact seeks to stimulate economic growth by increasing productivity and improving employment in high potential sectors including investments in fruit tree productivity, small-scale fisheries, and artisan crafts. Small business creation and growth will be supported also by investments in financial services and enterprise support.

According to the press release, the program has the potential to spur sustainable economic growth by stimulating expansion in high potential sectors. The Compact is expected to increase Morocco's GDP by approximately USD118Mn annually and directly benefit a total of 600,000 families.

"MCC congratulates Moroccans for developing a comprehensive program that encourages growth and job creation," said MCC CEO Ambassador John Danilovich. "This agreement complements the Government of Morocco's national growth strategy which aims to modernize and strengthen industrial sectors. MCC is proud to support Morocc's efforts to improve the lives of its citizens." Following MCC Board approval, there is a fifteen-day Congressional notification period before the Compact can be signed. MCC anticipates signing the Compact by the end of August.

Millennium Challenge Corporation (MCC), a United States government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty. http://www.map.ma/eng/sections/economy/mcc_approves_usd_697/view
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IMF describes as "remarkable" economic progress in Morocco.
Washington, Aug. 10

The International Monetary Fund on Thursday described as "remarkable" the economic progress achieved by Morocco in the past years, stressing the growth of GDP, the strength of the financial sector and the recent improvement in the tax system. "GDP growth has moved onto a higher trajectory, inflation has been contained, foreign direct investment has increased, and poverty and unemployment have been reduced significantly," noted the Executive board of the International Monetary Fund upon concluding their the Article IV consultation with Morocco on the assessment its economic and financial situation.

"Macroeconomic conditions remain strong while average growth has reached 5.4 percent per year since 2001,that is 3.4 percentage points higher than in the 1990s," the IMF said in a press release. "This reflects the ongoing diversification of the non-agricultural sector, and its increased resilience to shocks and as a result, real per-capita income is on the rise and the unemployment rate has started to decline."

According to the IMF, bad crop years still impact the overall economic performance, as evidenced by the growth deceleration in 2007. The fiscal deficit reached 2.1 percent of GDP in 2006, and is expected to remain below 3 percent in the medium term. The international institution commended the authorities for the recent improvement in the fiscal position, which has played a key role in boosting the private sector confidence.

The IMF executive directors considered that reducing the public sector wage bill, reforming the oil and food subsidy system, and accelerating tax reform will be key to bring the government debt-to-GDP ratio. Increased foreign direct investment have boosted reserves, to reach US $21Bn at end-May 2007, significantly higher than the stock of public external debt, underlined the IMF. http://www.map.ma/eng/sections/box2/imf_describes_as_re/view
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Japan donates Morocco over USD 6Mn to fund anti-flood project.
Rabat, Aug. 3

Japan has granted Morocco a USD 6.3Mn donation to fund an anti-flood project. The donation is meant to strengthen the intervention capacities against floods in order to reduce the material and human losses caused by this natural phenomenon that has become more and more recurrent over the latest years. The donation includes public works engines, in addition to funding of the construction of small and medium-size dams and carrying out various projects in order to consolidate Morocco’s anti-flood program. This funding is the fourth of the kind granted by Japan to Morocco (1986, 1989 and 1995) worth USD 23Mn.
http://www.map.ma/eng/sections/economy/japan_donates_morocc4444/view
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Japan grants Morocco USD 8.5Mn to build halieutic research labs.
Rabat, August 3

Japan granted Morocco USD 8.5 Mn to build and equip central research laboratories of the National Institute of halieutic research (INRH) under an Exchange of Notes singed, here on Friday, by the two countries. Due by late 2008, the 18-research laboratory project will span over an area of 8,124 sqm in the city of Casablanca and will be run by the INRH.

These Central laboratories will set up and plan annual research programs in coordination with other specialized regional centers and ensure a good execution of research, notably through an efficient cooperation between central and regional laboratories.

The IHRH is expected to ensure a regular assessment and the exploitation follow up of the principal halieutic stock, as well as the constant monitoring to the salubrity and quality of coastal sea water and the study of marine environment on halieutic resources.

Morocco and Japan have developed excellent cooperation in the fisheries sector, which tremendously served as a catalyst for the modernization of the sector, mainly scientific research, maritime training, improving the living condition of the fisherman community, and aqua-culture.
http://www.map.ma/eng/sections/economy/japan_grants_morocco_2/view
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Morocco to train 3,300 physicians a year by 2020.
Rabat, August 2

The Moroccan government is planning to train 3,300 physicians per annum by 2020 under an agreement signed here Wednesday. The initiative is due to increase almost fourfold the number of medical doctors, so far trained at a rate of 900 per year. It is also aimed to improve the index of medical density from 5.1 to 10 physicians/10,000 inhabitants by 2020, and to guarantee a better distribution of medical services across the country.

The agreement provides for increasing the number of students admitted to medical and pharmacy schools to 1,300 starting from the upcoming academic year. Speaking at the signing ceremony, Habib El Malki, Minister of Higher Education insisted this move would allow Morocco meet the needs registered in terms of medical services, the mandatory health insurance (assurance maladie obligatoire - AMO), and medical assistance.

For his part, Cheikh Biadillah, Health Minister, said the initiative is part of the reform in medical, pharmacy and dental medicine studies to be implemented as of the academic year 2008-2009. http://www.map.ma/eng/sections/imp_social/morocco_to_train_33/view
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London to host conference on investment in Morocco.
London, Aug. 2

The Middle East Association and UK Trade and Investment will organize a conference themed "Morocco: Trade and Investment Conference" on October 18 in London. The conference will feature keynote addresses by Moroccan and British Ministers and business leaders, panel discussions on the business and investment environment and major project opportunities, and workshops on key sectors, notably real estate/tourism, offshoring, automotive/aeronautical industries, education/training, and agri-business.

Participants in this meeting will tackle two major themes: "The New Morocco": Economic and Social Environment" and "The New Morocco": Economic and Social Environment". Morocco recorded 9.3% real GDP growth in 2006, and foreign direct investment raised sharply to achieve USD3bn. The economy is increasingly diversified, and unemployment fell to below 10% for the first time.  UK exports to Morocco rose to £290M (USD 397Mn) in 2006, making the UK the fourth largest exporter after France, Spain and Italy.
http://www.map.ma/eng/sections/world/london_to_host_confe/view
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Morocco to step up medical training.
06/08/2007 By Sarah Touahri

The World Health Organisation has listed Morocco among 57 countries with an acute shortage of healthcare professionals. To overcome the shortage, the country has launched a new programme to train 3,300 doctors annually by 2020 instead of the current 900. Morocco plans to overcome a shortage of healthcare professionals by providing training to 3,300 doctors annually by 2020 instead of the current figure of 900 per year. The initiative, to be launched at the beginning of the 2008/2009 academic year, will see 1,300 new students enrolling in schools of medicine and pharmacy.

Prime Minister Driss Jettou presided over the signature of an agreement Wednesday (August 1st) between the Ministries of Health, Education and Finance at the headquarters of the Rabat Faculty of Medicine, to increase the number of doctors from 5.1 to 10 per 10,000 inhabitants by 2020 and to improve the distribution of healthcare services throughout the country.

In a press statement, Education Minister Habib El Malki said the government had acted on the basis of an assessment of national healthcare services. "We realised that there were large gaps in provision, so we had to take another look at training in medical and pharmacy schools. This initiative is part of an effort to train and develop human resources to support the country's rapid economic and social development."

Human and financial resources are already in place to ensure the scheme will be a success. According to the Health Ministry, academic institutions will receive all the funding they need to recruit teaching staff, update training courses and upgrade hospitals and laboratories.

Healthcare professionals, who have emphasised the need in recent years to pay more attention to the planning and management of human resources in the sector, welcomed the announcement of the new strategy. Dr. Mohamed Cherqui told Magharebia it will help meet current needs for healthcare services, free medical care and compulsory healthcare insurance. "With the rising demand for healthcare services, it's high time we thought about training more doctors in Morocco. People working in the sector have been sounding the alarm for a long time now."

According to the World Health Organisation, Morocco is among 57 countries with an acute shortage of healthcare professionals. In addition to the shortage, the Ministry of Health is attempting to tackle the uneven distribution of doctors across the country. According to official statistics, of the 16,000 doctors currently working in the public and private sectors, almost half are based in Rabat or Casablanca. This means that the average ratio of doctors to patients is much worse in many other regions. The cities and regions of Casablanca and Rabat, for example, have over 7,000 doctors while the Taza-Al Hoceima-Taounate region has only 400.

Rural areas are in need of more doctors, particularly specialists, who are often unwilling to work in the country's more remote healthcare centres. According to Cherqui, in order to address this problem the government needs to encourage young doctors to move to rural areas by offering incentives. http://www.magharebia.com/cocoon/awi/xhtml1/en_GB/features/awi/features/2007/08/06/feature-01
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Moroccan government maintains subsidies on basic commodities.
06/08/2007

Morocco's Finance Minister, Fathallah Oualalou, denied reports that the prices of subsidised products, such as sugar, flour and bread, will be raised, MAP reported Sunday (August 5th). Deputy Prime Minister for Economic Affairs Rachid Talbi El Alami said the government has earmarked 14 billion dirhams to subsidise the prices of hydrocarbons, butane gas, flour and sugar, as it has done in previous years. Alami said prices of other subsidised products, including water and electricity, will not be submitted to any rise, and that subsidies have been increased to maintain the price of bread and cooking oil, which has increased on the international market. Despite the surge in the price of oil to $78 per barrel last week, the government has refrained from raising the prices of hydrocarbons to avoid fallout on other products, Alami concluded.
http://www.magharebia.com/cocoon/awi/xhtml1/en_GB/features/awi/newsbriefs/general/2007/08/06/newsbrief-04
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Morocco Q2 jobless rate rises to 9.4 percent.
Wed 8 Aug 2007, RABAT (Reuters)

Morocco's unemployment rate rose to 9.4 percent in the second quarter from 7.8 percent in the same period last year as drought hit the labour-intensive farming sector, official data showed on Wednesday. All the 188,000 created jobs in the second quarter were in urban areas, mostly in construction and service sectors, while the farming industry lost 93,000 jobs, according to the country's top planning body. As a result, job creation rose 0.5 percent in cities while the jobless rate rose 1.7 percent in the countryside, bringing the total number of unemployed to 1.060 million from 859,000 in the second quarter in 2006, the High Planning Commission said.

A severe drought slashed Morocco's cereals harvest to 2.0 million tonnes this season from 9.3 million tonnes in the previous period, the government says. Morocco's agriculture accounts for more than 40 percent of employment and up to 20 percent of gross domestic product.

The government has predicted economic growth would shrink to 3.5 percent this year from 8.1 percent last year. Trimming unemployment is a priority for the government. Morocco must create 400,000 jobs a year over the next 10 years versus an average of 130,000 in the past decade to prevent mass unemployment from threatening stability, according to an official report.
http://africa.reuters.com/business/news/usnBAN854020.html
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Citizen centres come to the aid of Morocco's underprivileged.
By Sarah Touahri – 09/08/2007

The new Dar Al Mouwaten facilities provide citizens from the country's poorest areas with social assistance, meeting space, and training to help bring them in step with mainstream society. Local communities in Morocco have come together to fight the social exclusion of their most vulnerable citizens. With support from the National Initiative for Human Development, 80 "Dar Al Mouwaten" citizen centres have been established throughout Morocco since 2005, particularly in underprivileged districts and rural communes. According to the Communications Department of the Ministry of Social Development, Family and Solidarity, the creation of these institutions is the result of community initiatives, to respond to citizens' needs for meeting places, consultation, and work.

The government determined that existing social organizations (youth clubs, women's clubs, culture centres and training centres) could not satisfy all the social needs of a diverse and growing population and decided to launch the "citizen centre" programme. The mission of these centres is to provide information and orientation on social and administrative organisations (health, training, micro-credit, etc.). The centres offer social mediation for those in difficulty, education courses for adults, non-formal education for young people, academic support and citizenship education.

Deputy Director for Social Action with the National Mutual Aid programme (Entraide Nationale) Abdeljalil Cherkaoui said that the Dar Al Mouwaten projects are part of a national strategy to fight poverty and social exclusion, and to promote culture and education and establish partnerships with civil society.

Rachid Allali, provincial delegate of National Mutual Aid for Errachidia, affirmed that the Dar Al Mouwaten is intended to provide an interactive space, concentrating community-based politics on the development of social action and the promotion of socially responsible governance that responds to the needs of the target population.

Mohamed Sarghini, a young law student, told Magharebia that the creation of the citizen centre in Ain Sebaa last June was a praise-worthy initiative: "It's a first for the disadvantaged people of the district who, from now on, will be able to benefit from workshops on social action, awareness-raising and orientation. Furthermore, Dar Al Mouwaten guarantees the organisation of meetings and debates to integrate the inhabitants of Hay Mohammadi-Ain Sebaa into the social fabric."

Many are expressing their satisfaction with the creation of this structure. Samira Benabbou, who holds a degree in economics, pointed out that besides these educational benefits, the centre offers employment-seekers and young people training, to facilitate their entry into the working world, particularly skills training geared toward television professions and new information and communication technologies.

The citizen centre also allows women to learn a trade. This was the case for Hadda Bent Mohammed, who is in the process of learning sewing at the citizen centre of Casablanca. "My husband is a taxi driver and his income is limited. I am learning sewing here to be able to help him support the home. I have no problem because I leave my son in the citizen centre's day-care facility," she said.
http://www.magharebia.com/cocoon/awi/xhtml1/en_GB/features/awi/features/2007/08/09/feature-02
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Internet subscriptions rise by 220% in Morocco .
10/08/2007 By Adam Mahdi

This year has marked a turning point in the telecoms market in Morocco, with the entry of new players Méditelecom and Wana. The country now has around two million landline subscribers, over 17 million mobile subscribers and 480,000 Internet subscribers. Recent statistics from the National Telecoms Regulation Agency (ANRT) have shown the impact of deregulation of the telecommunications market, pointing to double-digit growth for the various information and communications technology (ICT) segments – landline telephones, mobile phones and the Internet.

According to the latest report published by the Agency's ICT information centre, as of June 30th Morocco had nearly two million (1,940,896) landline subscribers, equating to a penetration rate of over 6%, up from 4% in 2006. This strong performance is primarily due to the introduction of fixed-line services with limited mobility onto the market by Wana and Méditel. Also in the landline segment, the total number of payphones across the country, including phone shops, phone booths and card-operated pay phones, saw modest growth to 159,177.

The penetration rate for mobile phones is continuing its sustained growth, having reached a level of 57% with a total of more than 17.7 million subscribers. The market is still dominated by Maroc Telecom, the original operator, which has almost 66% of the mobile market compared with a share of 34% for its rival Medi Télécom. Next year will mark a turning-point for the mobile market with the entry of a third player, Wana.

In the meantime, subscriptions to GSM Internet are continuing to decline while prepaid Internet services are dominating the market with a share of 95% compared with 5% for post-paid services. The impact of high-speed (ADSL) Internet is clearly continuing to grow since the market has expanded by 40% since last year (June 2006) to reach a total of 480,000 subscribers, 93% of whom are on ADSL, while low-speed and leased lines have suffered.

Experts believe there are now more than six million Internet users on the market. Since the introduction of ADSL services, Morocco's Internet market has witnessed unprecedented growth, reaching a record level of 220% since June 2005. This boom led to an increase from 168,000 subscribers in June 2005 to 480,000 in June 2007.

The second quarter of 2007 saw the launch by the three operators – Maroc Telecom, Méditel and Wana – of 3G Internet services onto the market in the country’s main cities, priced at 600 dirhams ($73 US) with speeds of over 3 MB. http://www.magharebia.com/cocoon/awi/xhtml1/en_GB/features/awi/features/2007/08/10/feature-01
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Morocco central bank must be wary of inflation - IMF.
Fri 10 Aug 2007 WASHINGTON. (Reuters)

Moroccan inflation has slowed but its outlook remains uncertain and the central bank must be ready to tighten monetary policy if price pressures mount, the International Monetary Fund said on Thursday. "As the future path of inflation is subject to risks, it calls for continued vigilance on the part of the central bank," the IMF said in a regular assessment of Morocco's economy. "Resurgence of inflation would warrant a further tightening of monetary policy," it said.

The IMF also said there were no signs that the country's dirham currency was misaligned on foreign exchange markets. Moroccan growth is forecast by the IMF slow to 2.5 percent in 2007 from 8 percent last year due to a slide in farm output following a poor harvest.
http://africa.reuters.com/business/news/usnBAN024007.html
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Country and Millennium Challenge Corporation Building a Dynamic Partnership for Poverty Reduction Through Economic Growth .

United States Millennium Challenge Corporation (Washington, DC). PRESS RELEASE
9 August 2007
Posted to the web 10 August 2007
Washington, D.C.
The Board of the Millennium Challenge Corporation has approved a five-year, $697.5 million Millennium Challenge Compact to reduce poverty and increase economic growth in the Kingdom of Morocco.

The program seeks to stimulate economic growth by increasing productivity and improving employment in high potential sectors including investments in fruit tree productivity, small-scale fisheries, and artisan crafts. Small business creation and growth will be supported also by investments in financial services and enterprise support. The Compact components include:

Fruit Tree Productivity Project ($300.90 million )
The objective of the Fruit Tree Productivity Project is to stimulate growth in the agricultural sector and reduce volatility of agricultural production. In rainfed areas, the project will rehabilitate 135,000 acres of existing olive trees and expand production of olives, almond and fig trees on 296,000 acres. This component aims to move small farms from high water-use, low-value cereal grains to low water-use, high-value and drought resistant commercial fruit tree species. In irrigated areas, the project will support improvements to increase irrigation efficiency and productivity of olive and date trees across 102,000 acres.

Small-Scale Fisheries Project ($116.17 million)
The Small-Scale Fisheries Project will transform the small-scale fisheries sector by modernizing the means of catching, storing, and marketing fish, thereby improving the quality of the catch, maintaining the value chain, and increasing fishers' access to both local and export markets. MCC funding will be used to construct up to 20 landing sites along both coasts, to construct or upgrade fishery facilities in up to 13 major ports, and to build or re-build up to 6 modern wholesale markets in selected cities. In addition, the project will provide technical assistance and training required to ensure proper management and to partially fund the acquisition of fresh-fish transportation equipment by mobile fish vendors. A key component of the project will establish a network of Marine Protected Areas and increase monitoring efforts to ensure the sustainable use of fish resources.

Artisan and Fez Medina Project ($111.87 million)
The Artisan and Fez Medina Project seeks to stimulate economic growth by leveraging the links between the craft sector, tourism, and the Fez Medina's rich cultural, historic and architectural assets. This project will strengthen the national system for literacy and vocational education to benefit artisans and the general population, in particular women and girls. MCC funding will be used to enable artisans to increase the quality of their goods by supporting access to training in modern production techniques and business management, as well as access to bank or micro-credit loans to invest in modern kilns and pottery workshops. To serve local residents, attract tourists and increase artisan sales in Fez, MCC assistance will also support the design and reconstruction of historic sites within the Fez Medina, including the funding of an international architectural design competition for two of the most prominent sites.

Financial Services Project ($46.20 million)
The Financial Services Project seeks to increase financial services for micro-enterprises in Morocco by addressing the key constraints to the development of a broader, deeper, and market-based financial sector. MCC funding will support an investment in the subordinated debt tranche of Jaida, a non-bank financial institution launched in late 2006 to lend to the Moroccan micro-credit sector. The project will also analyze the regulatory and operational requirements to allow micro-credit associations to change their legal structure in order to offer savings and other non-credit financial services to their customers,. MCC assistance will also support investments and technical assistance to improve efficiency and transparency in the financial sector in an effort to lower borrowing costs on a sustainable basis for micro-enterprises .

Enterprise Support Project ($33.85 million)
The Enterprise Support Project addresses two economic priorities: to reduce high unemployment among young graduates and to encourage a more entrepreneurial culture. The objective of this project is to improve the outcomes of two existing high-priority Moroccan government initiatives, Moukawalati and the National Initiative for Human Development (INDH). Moukawalati is a relatively new national program initiated to drive Morocco's businesses to be more competitive in the face of globalization and to address high youth unemployment rates. The INDH is a multi-year Government initiative aimed at creating opportunities for the poor, vulnerable, and socially excluded.

This project is structured in two phases. First, a set of three pilots will measure the impact of several training initiatives offered to current beneficiaries of these Government programs who would receive further training and technical assistance designed to increase their rate of survival. Second, if results reported by an independently conducted evaluation show success, training initiatives will be expanded beginning in Year 3 of the Compact. In addition, the Government agency sponsors of the programs would receive support to help them better manage the selection and training processes for these entrepreneurs.

The Compact also includes approximately $88.5 million for monitoring, evaluation, program administration and oversight.

Expected Results
The Program has the potential to stimulate growth in high potential sectors. The Program is expected to increase Morocco's GDP by approximately $118 million annually and directly benefit a total of 600,000 families.

The Fruit Tree Productivity Project is expected to improve the livelihoods of approximately 136,000 farm households in rural areas of the northern, central and southern regions of Morocco. In addition, terrace construction is expected to create economic opportunities for approximately 11,000 agricultural laborers.

The Small-Scale Fisheries Project is expected to benefit approximately 24,000 small-scale fishers, boat owners, wholesale fish merchants, and mobile fish vendors. It is estimated that mobile fish vendor net incomes will increase approximately 62%, enabling the vendors to exit subsistence-level poverty.

The Artisan and Fez Medina Project's literacy and training program is expected to benefit 1,000 faculty and approximately 120,000 students by the end of the Compact term. It is expected that 50,000 master artisans will be trained in new design and production methods by the end of the Compact term. This project's activities are expected to reduce poverty by stimulating the Medina's main industries, tourism and artisan production, and are estimated to benefit approximately 20,000 low-income workers in the Fez Medina.

With the Financial Services Project, MCC projects that up to 174,000 additional clients of micro-credit associations will benefit by the end of the Compact term. These people would borrow and invest in small, high-return investments to significantly increase their incomes.

During the pilot phases of the Enterprise Support Project, approximately 600 entrepreneurs will receive training. If the pilot succeeds and is expanded, up to 4,000 enterprises created under Moukawalati could receive technical assistance and up to 2,000 INDH groups could receive similar support.

Millennium Challenge Corporation (MCC), a United States government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.
http://allafrica.com/stories/printable/200708100856.html
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Morocco and capitalism: A beautiful friendship.
By A. Craig Copetas Bloomberg News .August 8, 2007 / Internatrional Herald Tribune.
CASABLANCA:

The midnight fog rolls off the Atlantic on cue, wrapping around Casablanca's Enfa Airfield, where Rick's goodbye to Ilsa in 1942 launched the cinematic magic of Humphrey Bogart and Ingrid Bergman.

Today, the folks at the Casablanca Stock Exchange say the classic film about romance and redemption on a stage of global strife plays a cameo role in wooing Western capital to Morocco's financial hub at a time when the fear of terrorism has left much of the Muslim world struggling to find ways to entice foreign investment.

"There's no doubt 'Casablanca' attracts investors," says Touda Loutfi, the exchange's corporate-planning director. "After Morocco, our biggest subscribers come from Great Britain, the U.S., France and Japan, places where the film has a cult following."

Klaxons of merchant ships in this city's Atlantic harbor penetrate the high-rise blue-glass-and-white-stone exchange. A lifetime seat on the 14-member electronic-trading floor costs brokers $670,000; across the ocean it costs $50,000 a year for a New York Stock Exchange license.

With a market capitalization of $47.2 billion representing 69 companies, the 77-year-old bourse is hardly visible when compared with the $13.4 trillion market value of the Standard & Poor's 500 Index. Still, the exchange in Casablanca and the one in Kuwait are the best-performing of the 10 in the Arab world.

"It's a burgeoning market with a great deal of potential," says Henry Azzam, 56, Deutsche Bank's chief executive officer for the Middle East and North Africa. "Casablanca is the business center of the Maghreb."

Azzam says he is not worried that Bogart threw out the last Deutsche Bank executive who tried to gamble in "Casablanca."

"Casablanca is a place with a lot of characters," says Azzam, who visits the city a minimum of four times each year from his base in Dubai. Like Bogart, he says, "Of course I own a trench coat."

Badr Alioua, fixed-income and equity manager at the local Attijariwafa Bank, says King Mohammed VI, 43, has made the city the hottest place for business in the Arab world. Morocco's gross domestic product grew 8.1 percent in 2006, up from 1.7 percent in 2005. Moody's Investors Service rates the country as "stable," with credit strengths that include a young population, as well as structural and democratic progress.

Alioua says the king's embrace of capitalism and free speech, as well as a tolerant interpretation of the Koran, ensures that educated young Moroccans will not flee the country.

"The youth factor of this market is critically important to our continued success," said Alioua, 27. "Casablanca is like the movie: a place where young people are willing to take risk. 'Casablanca' is the main reason why Americans know about us, and we must take advantage of that."

Along many of the noisy streets outside the waterfront exchange, a brokerage community that exploits life imitating art is out of sync with radical Islamists who view Hollywood movies, liquor, and interest-bearing financial instruments as taboo.

In May 2003, five separate bomb attacks engineered in Casablanca by Qaeda militants left 45 people dead, including 12 suicide bombers. Another blast in March of this year injured three people in a cafe and killed the assailant.

A different global clash of ideals - fascism versus freedom - was in the news on Nov. 26, 1942, the day "Casablanca" premiered at the Hollywood Theatre in New York and the silkworm-breeding company Ancients Etablishment Buissou was the most actively traded of the exchange's 34 stocks.

So how does the bourse cope with 21st-century tensions, and does it intend to create a Shariah-law compliance committee with the power to veto investments?

"No imams," says Loutfi, 33, wrinkling her nose over a tumbler of mint tea in a humid conference room at the exchange. "We don't want them here."

Across the Atlantic, Feisal Abdul Rauf is imam of the Masjid al-Farah mosque in lower Manhattan.
"The strict prohibition on charging interest still prevails in the Muslim world and has largely prevented it from robustly developing the foundations of capitalism," he says.

"Not being able to accept these ideas is one of the primary reasons the Muslim world lagged behind the West," says Rauf, who is known as "the Wall Street Imam" because his mosque is located blocks from the New York Stock Exchange.

Nowadays, one of the most suspicious characters in Casablanca is Kathy Kriger, proprietor of Rick's Cafe and president of its owner, The Usual Suspects.

"Call me Madame Rick," says Kriger, who in 2004 resigned as a U.S. diplomat in Morocco to open the cafe in the city's Moorish quarter, a sweltering walk from the exchange through the bazaars.

Kriger spent almost a year raising $1 million to recreate Rick's as the symbol of a time when, she says, "the world looked to America for its goodness and greatness." She found 43 investors, 32 of them U.S. citizens.

"And, of course, the U.S. Treasury Department tracked down the Americans because they transferred funds into a Moroccan company," Kriger says. "They were all investigated. The government thought Rick's Cafe was a terrorist front."
http://www.iht.com/articles/2007/08/08/news/letter9.php?page=1
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