Virtual Magazine of Morocco on the Web
Morocco Week in Review 
September 18 2004

FTA, genuine illustration of US support to Morocco's choices, US consul
Moroccan Parliament commission to examine FTA with US.
New Born Death Rate decreased in Morocco Between 1995 and 2003
Moroccan Industries Facing Globalization
HM King Mohammed VI dedicates Quaraouiyine library after rehabilitation
King inaugurates social projects in central Morocco
HM King Mohammed VI Dedicates Several Developments Projects in Fez
UNESCO delegation to visit Morocco to "discover its heritage"
UNFPA Chief Praises Countries like Morocco and Tunisia for the Betterment of Women Conditions
Moroccan Family Law Reform Praised by Two French Officials, daily.
Rights abuses: Morocco in damage control.
Islamic Bank for Development loans Morocco USD 65 million to build a railway
Budget Conundrums.Morocco,
Moroccan movie grabs Alexandria festival first prize 
Morocco to Lift Ban on Dairy Cow Imports, But Stringent Restrictions Will Remain
Club Med Strategy in Morocco

FTA, genuine illustration of US support to Morocco's choices, US consul
KENITRA, Sep.11

The free trade agreement signed between Morocco and the United States is a genuine illustration of US support to Rabat's orientations and choices, said the US consul in Morocco, Roberto Powers.

Speaking at a meeting here Friday held by Moroccan investors settled abroad on the opportunities offered by the Morocco-US deal, Powers said the FTA reflects the depth and strength of bilateral social-economic and trade relations.

According to the consul, the agreement will offer new employment opportunities and increase foreign investments in the kingdom, citing US trade representative, Robert Zoellick, who had said the free trade agreement will reinforce economic ties and is a strong signal of Morocco's commitment to support tolerant, open and prosperous Muslim societies.

Evoking advantageous aspects of the accord, Lamya Ismaili, a textile and leather executive of the Moroccan industry department, said the agreement offers preferential advantages to Moroccan industry, allowing some 99.7% of Moroccan products, except textile, to benefit from customs duties exoneration as soon as the accord enters in force.

Such advantages, she said, are not allowed industrial products of other countries that signe a similar agreement with the United States, such as Chili (85%) or Jordan (70%).

Head of the Moroccan club of expatriate investors, Rami Bouchaib, said the agreement will open a new era in bilateral relations between the two countries that share the same values of freedom, which made of Morocco a strategic ally of the United States.

The Morocco-US FTA, signed on June 15, is the first agreement of the kind ever concluded by the USA with an African country and the second one with an Arab country, after Jordan.

HM King Mohammed VI and President Bush agreed to negotiate a Free Trade Agreement in April 2002 during a visit of the Moroccan sovereign to Washington.

The FTA will immediately eliminate tariffs on more than 95 percent of bilateral trade in consumer and industrial products. All remaining tariffs on these goods are to be eliminated within nine years - the best market access package of any U.S. free trade agreement with a developing country signed to date. The agreement also significantly reduces barriers to agricultural products and services.
http://www.map.co.ma/mapeng/home_dep/h_dep319.htm 
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Moroccan Parliament commission to examine FTA with US.
RABAT, Sep. 17

The Productive Sectors Commission at the Moroccan House of Representatives (lower parliament chamber) will examine Monday the Free Trade Agreement (FTA) signed with the United States last June 15, the Commission said in a release.

The accord, adopted by the US congress at the end of July, still needs to be adopted by the Moroccan parliament. The Morocco-US FTA is the first agreement of the kind ever concluded by the USA with an African country and the second one with an Arab country, after Jordan.

It will immediately eliminate tariffs on more than 95 percent of bilateral trade in consumer and industrial products. All remaining tariffs on these goods are to be eliminated within nine years - the best market access package of any U.S. free trade agreement with a developing country signed to date. In addition to the FTA, the Productive Sectors Commission will probe other issues, notably the problem of locust swarms and agricultural questions.
http://www.map.co.ma/mapeng/eng.htm 
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New Born Death Rate decreased in Morocco Between 1995 and 2003
Rabat, 16 Sept

The death rate at birth decreased to 227 per 100,000 births between 1995 and 2003 in Morocco, according to the first findings of the study on population and family health conducted from October 2003 through March 2004. The study, noting the death rate at birth was 187 and 267 per 100,000, in urban and rural zones, respectively, added infant mortality rate stood at five deaths per 100 for children below five years.

The immunization campaigns carried out by Morocco have enabled vaccinate the majority of children against killer diseases, with an immunization rate of 89 pc (rural) and 94 pc (urban) for children aged 12 to 23 months, the study shows adding the immunisation have contributed to the low death figures.

Women fertility is maximal between the age of 30 to 34, the study said noting fertility is higher in rural than in urban zones for all age groups.

Family members number has decreased from 5.9 to 2.5 per family between the early eighties and 2000, the study said adding the decrease is ascribed to marriage delaying, expansion of birth control during the past 20 years reaching 63 pc among women of reproductive age.

The study also shows that 85 pc of pregnant women in urban areas visit a gynaecologist at least once during pregnancy compared to 48 pc rural areas. © MAP 2004
http://www.map.co.ma/mapeng/news/economy/soc-Chad.htm 
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Moroccan Industries Facing Globalization
08-04-2004 -- Trade and Globalization

The establishment of a free-trade zone between Morocco and the European Union is what is in the mind of many Moroccan industrialists. For some, the agreement will open new opportunities for them in Europe. For others, it is a source of worries and major potential problems as trade barriers are removed and goods and products from Europe will ultimately enter Morocco without any obstacle.

The fear among many comes from the fact that the EU has recently expanded to add 10 new members, widely considered here in Morocco to be low-cost manufacturing nations therefore direct competitors. Countries like Slovakia, the Czech Republic and Hungary not only boast highly qualified workforces, but they also have access to lower-cost energy in comparison to what Moroccan companies pay.

With larger industries, Eastern European countries are also advantaged by their economies of scale, and that is not the case for Morocco. Among the advantages of having economies of scale is that the fixed cost can be spread over larger quantities of output, hence lowering the unit price of products and services offered to the market.

In addition, industries such as the household appliances assembly in Morocco have not grown in an organic fashion and there are no peripheral industries to support them. Peripheral industries include contract manufacturers that supply parts and components they manufacture to the product assembler.

So are Morocco's industries doomed to fail? Household Appliances market analysts worry that this could indeed be the case for the companies they monitor. Their demise, they say, could occur as early as in the medium term, even long before the country completely removes its protective barriers by 2012. They argue that what keeps local production alive is precisely the protection it gets from customs, keeping foreign competition at bay.

But although Europe is likely to be a source of problem to local production companies, the steps made so far by Morocco to get closer to Europe have been a boon to everyone in the Kingdom. The reductions of the import taxes for products coming from Europe, and which began in March 2003 created an unprecedented demand for electric household appliances and other products in Morocco. Both importers and domestic assemblers witnessed sustained strong sales and revenue growth. In the past two years, the market grew at a rate of between 10% and 15%. 2004 is also predicted to perform well, most likely to grow at the same rate. This performance is indeed remarkable considering that growth in that industry is at least three times the expected GDP growth. The television set market was the strongest, with an estimated 300,000 units sold in a year, although that number is difficult to confirm.
A 2.5% reduction in import taxes on TV sets and strong growth in the household penetration of satellite television broadcasting have led to a major boost in TV set sales. Because there is now a variety of broadcast programs to choose from, a growing number of households are acquiring their second or even third TV unit. A new refresh cycle aimed at replacing aging TV sets is also underway.

This is now. In the future however, what will be left for the current assemblers or manufacturers is a strong likelihood of becoming sole importers. But although given the current environment the washer and dryer industry is almost certain to disappear, the fate of other industries related to electrical household appliances sector is still unclear. A very few companies such as Manar, the producer of the Siera brand and Fagor have been working hard to adapt to the changes in the laws, including those regulating commerce and customs. After its successive lowering in 2003 and 2004, the import tax for products originating from Europe is at 40%, a rate that burdens the two assemblers and make them uncompetitive on the longer term. If assembly and production will remain a core business for the two companies in the foreseeable future, there is a strong likelihood that they will increasingly switch to importing finished items and distribute them in Morocco instead of assembling them there. Already, 50% of Sieras are imported today and the company is preparing to raise the share of imports to 75%. Fagor also taps into its parent company, Spain-based Fagor S. Coop., Ltda. to import finished units into the Moroccan market. In the future, chances are the Moroccan unit will transform itself into a marketing and distribution business and will probably scrap its assembly facility.

The message from many industry players is clear. Given their cost structure they cannot compete with global corporations. Analysts say the cost of producing appliances in Morocco is between the costs of Western Europe and those of Central Europe. And as long as Central European producers have the cost advantage, producers in Morocco will not run a competitive business. At Siera, managers are currently working to reduce production cost to compete with the new members of the European Union.

But Central Europe is not the only problem. Turkey is also a source of anguish for Moroccan producers. To make things more complicated, the two countries have recently signed a free-trade agreement, and that constitutes another factor of risk. Some Moroccans complain that Turkish exports are subsidized by their government. But they also say Turkey has lower cost of energy and a lower cost of labor.

Although the Morocco-Turkish free-trade zone will undergo a transition period before full implementation, Turkish producers are widely considered as formidable competitors. Even among the multinational corporations that only have an import and distribution presence in Morocco and no assembly activity, many concede that Turkish companies are likely to challenge their presence there. Their strength is related to the business environment in which they operate. Three industrial groups are active in the Electric household appliances production in Turkey. These groups are surrounded by a dense contract manufacturing and supplier network and benefit from a relatively large market. The result of these factors and others is that Turkish companies are more competitive than even their Central European peers. In addition, a weak Turkish currency drove production costs by 10% to 15% lower than the cost of production in Central Europe.

But reporting on household appliances without mentioning Asia would be a mistake. This is because China reportedly produces 40% of the world's electric household appliances. Exports of that category of products exceeded
$8 billion in 2002. half of the washing machines sold in the world is produced in China and 75% of all microware ovens carry the manufactured-in-China label. It is not surprising that China is where multinational corporations get their supplies. That includes the Moroccan Manar, which imports virtually all of its television sets and a proportion of its other product lines distributed in Morocco. These imports from China helped Manar remain afloat and compete with the big brands.

The Chinese are not the only giants consider a threat factor to Moroccan producers. The South Koreans have made significant strides in penetrating emerging markets and brands like LG now have instant recognition among consumers. It took LG just about six years to establish a reputation of a good company among Moroccan consumers. The Korean vendor has been able to consolidate its position for many product lines. LG pioneered aggressive marketing campaigns to strengthen its position in Morocco, forcing its competitors to follow its steps, but only a few were able to invest in such campaigns.
http://www.north-africa.com/free.htm 
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HM King Mohammed VI dedicates Quaraouiyine library after rehabilitation
Fez, Sep 17

HM King Mohammed VI of Morocco dedicated on Friday the Quaraouiyine library in the central city of Fez after the completion of the rehabilitation works that necessitated 5 million Dhs, about US$ 5,000.  The Quaraouiyine library comprises a reading room, a micro-film facility, two laboratories to rehabilitate old manuscript and record them on micro-films.

The library was built in the mosque bearing the same name by Sultan Abou Inan Al Marini in the 14 century, who gave all the book he had to the library which through centuries benefited by the care and aid of Moroccan Sultans and other personalities in the like of Ibn Khaldoun. The Alawite sovereign continued the tradition of taking care of the famous library, both providing maintenance and rehabilitation works and granting financial aid. The library was relocated in 1940 to the Seffarine square following instructions by the late king Mohamed V who dedicated the new library in 1944.
http://www.map.co.ma/mapeng/home_dep/h_depAlquds.htm 
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King inaugurates social projects in central Morocco
FEZ (central Morocco), Sep. 15

HM King Mohammed VI inaugurated Wednesday in the city of Fez a center for blind people and a hostel for young orphan and needy girls. The first center, to host 120 students, will be carried out in partnership with the Alawite Organization for the Protection of the Blind in Morocco (OAPAM). The project, to be financed by Mohammed V Foundation for Solidarity, will require a budget of 6 million Dhs (about $666,000).

As for the second project, it aims at fighting school drop out by orphan and needy girls, especially those living in rural areas. Besides, it will host a dormitory for high school girls living in remote regions to allow them pursue their studies in an appropriate environment. The implementation of this project will require a budget of 5 million Dhs (around $555,000).

The Moroccan sovereign launched Tuesday other projects in Fez, including a handicraft resort.
http://www.map.co.ma/mapeng/eng.htm 
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HM King Mohammed VI Dedicates Several Developments Projects in Fez
Fez, Sep 14

Some 25,000 shantytown dwellers will be relocated thanks to the urban development programme of the city of Fez meant to provide better housing and urban utilities to ten million people by the year 2007. HM King Mohammed VI of Morocco, currently visiting this Moroccan central city, was informed here Tuesday on the progress of the programme on the development of urban area and the eradication of unhealthy housing in Fez. The programme, costing 942 million Dhs (about US$ 104 million) aims at setting a better management of the urban expansion, correcting urban dysfunctions in the town, as well as rehabilitating roads, rail roads, and help settle peddlers.

The sovereign dedicated in the city of Fez the Ain Nkobi handicraft resort and visited the construction site of the Benjellik handicraft district. The Ain Nkobi handicraft resort, which is built over a seven-hectare area and comprises 240 mechanized units as well 460 small subcontracting workshops, cost 24 million Dhs (around US$ 26,600).

The earthen-ware manufacturing Benjellik district will cover 28 hectares at some seven km outside the city and will host polluting handicraft processing units currently located at Ain Nkobi. This handicraft projet, which will host 155 workshops, is to cost 27 million Dhs (about US$ 30,000). It is part of the local authorities'efforts to remove polluting production units and the promotion of the handicraft sector, at large.

The sovereign also visited the Fez family court completed last March and built over a 8,500 square meter area necessitating 31 million Dhs (around US$ 3.4 million).
http://www.map.co.ma/mapeng/home_dep/h_depThrone.htm 
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UNESCO delegation to visit Morocco to "discover its heritage"
PARIS, Sep 13 

A delegation of UNESCO ambassadors and permanent delegates will visit Morocco on September 15-19, to "discover and re-discover Morocco's rich heritage," UNESCO said in a release. The delegation will visit the southern cities of Marrakesh, Essaouira, Agadir and Tan-Tan where they will attend the Moussem (traditional festival) of the city that was rehabilitated with the assistance of Spanish good will ambassador and explorer Kitin Munoz. "The revitalization of this important cultural event that brings together Sahara tribes will contribute to the promotion of cultural heritage" in the country, said the release.
http://www.map.co.ma/mapeng/eng.htm 
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UNFPA Chief Praises Countries like Morocco and Tunisia for the Betterment of Women Conditions
London, Sep 15

Mrs Thoraya Ahmed Obaid, executive Director of the Un Population Fund (UNFPA) praised, here on Tuesday, the progress made by countries in the like of Morocco and Tunisia in the improvement of women conditions. At a press conference on the occasion of the release of the UNFPA annual report, Mrs Obaid said North African countries are making important efforts in the improvement of the life conditions of women, noting however that some Arab countries such as Djibouti and Sudan have to work more to reduce mother death rate.

She underscored that lack of financial resources is hampering the actions taken to reduce poverty in the world, adding international measures to fight poverty cannot be efficient without funds and effective cooperation The UNFPA director highlighted the progress made in the implementation of the world action plan which links poverty and women rights and reproduction health. She said governments are embracing the action programme of the 1994 international conference on population and development (ICPD) to materialise the development objectives set by the UNO http://www.map.co.ma/mapeng/home_dep/h_dep006.htm 
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Moroccan Family Law Reform Praised by Two French Officials, daily.
Rabat, Sep 15 (MAP)

Two French women officials lauded the adoption of the family code by Morocco that, among others, provides for the improvement of women conditions, particularly in marriage and couple property issues. State Secretary to integration, Mrs Catherine Vautrin, and chairwoman of French high Council for integration (HCI), Mrs Blandine Kriegel, in separate interview with the "L'Economiste" daily, said they hoped the outcome of the seminar on women civil rights and on the situation of old migrants, they are attending in Rabat, would come with proposals on the betterment of the life of migrants in France.

Mrs Catherine Vautrin spoke of the problems of immigrants workers households in France, adding discussions on this issue are exploring how to settle the problems « for the Moroccans who chose to stay in France (and help them) benefit best by a retirement scheme".  She announced the upcoming renewal of the development partnership convention between Morocco and the French interministerial directorate for towns.

Talking of the rise of racism in France, she said partnership with Convergence association is to be incepted to spread awareness of the precepts of various religions and the potentials of France for a harmonious co-existence. Mrs Blandine Kriegel said the holding of the seminar in Morocco was suggested by several HCI members of Moroccan descent, adding the council welcomed the Moroccan reforms of the family code, which are similar in spirit to the wishes of the council. (MAP) QA http://www.map.co.ma/mapeng/news/economy/h_dep006cereals.htm 
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Rights abuses: Morocco in damage control.
16 September 2004 RABAT

The Chairman of the Justice and Reconciliation Commission in Morocco, Idriss Benzakri, has said that the commission was doing its best to heal the damage inflicted on many people in all the affected areas as a result of stark human violations in the past.
Idriss Benzakri said that the gross human rights violations witnessed in the country in the past had great negative effect not only on the victims who were made to suffer in various detention camps in the country, but also on society, particularly in areas like Agadas and Tagonit.

Meanwhile, Morocco's tourism ministry is expecting to attract about 10 million tourists in six years' time. To achieve this dream, the ministry has launched a massive campaign, including organising fairs to highlight Morocco's tourism potential and promote the tourism industry, both inside the country and abroad.

But the million-dollar question is for what price is Morocco targeting the 10 million tourists? Grave concern has been raised by a number of groups and organisations about the looming dangers, following a report, which exposed the infidelity that was happening in some of the luxurious hotels in the country. This prompted some groups and organisations to sound the alarm bells, warning against allowing Morocco to plunge into the type of tourism that could turn the country into a big brothel.
http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/middleeast/2004/September/middleeast_September427.xml&section=middleeast&col= 
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Islamic Bank for Development loans Morocco USD 65 million to build a railway
RABAT, Sept 15 (KUNA)

The Islamic Development Bank offered Morocco a USD ? ?65 million loan to finance the construction of a 45 Kilometer-long railway in ? ?the northern part of Morocco.? ? Moroccan Radio said that the total cost of building the railway, linking ? ?the city of Tangier and Tangier Mediterranean Harbor is estimated at USD 380 ? ?million. The loan will cover part of the cost, while local Moroccan banks will ? ?cover the rest.? ? The loan will be paid over a period of 15 years with a three years grace ? ?period and a 6 percent interest rate, which can be reduced to 5.1 percent if ? ?the loan was paid on time.? ? The railway is expected to be completed by 2007 along with the new harbor, ? ?which is considered the largest of its kind in Morocco.
http://www.kuna.net.kw/English/Story.asp?DSNO=664265 
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Budget Conundrums.Morocco,
September-3 Volume 44. 14.09.2004

There have been some headaches at the Ministry of Finance recently, as Morocco's 2005 budget is finalised. Number one has been the fact that salary increase commitments and runaway petrol prices have been eroding any room for manoeuvre. The ministry's officials have been faced with a difficult job in balancing the 2004 books while providing the 2005 budget with enough resources to sustain the economic recovery.

The IMF's Article IV consultation released in June put a spotlight on the risk of the fiscal deficit to Morocco's macroeconomic stability. With the deficit projected to reach close to 5.5% of GDP in 2004, the IMF stated that the "current fiscal position cannot be sustained over the medium term in both the authorities' and staff's [IMF's] views". Although privatisation receipts and abundant domestic liquidity have helped minimise the risk, the debt-to-GDP ratio could rise in the medium term, if there is no correction, with a consequently negative impact on interest rates.

The IMF believes fiscal consolidation needs to be tackled sooner rather than later (what it calls "front-loaded fiscal consolidation"), but the elaboration of the current budget is impeded by two negative factors. Firstly, the government is committed to raising public sector salaries: as part of wage negotiations conducted by the previous government in 2002, the third and last part of the pledged increases are to take effect in the new budget.

The wage segment of the budget is thus set to increase by Dh8bn (around 730m euros) to Dh62bn (5.64bn euros). Furthermore, administrators in the public sector have negotiated a settlement to their wage increase demands with the government which calls for rises of between Dh1050 and Dh4300. This will doubtless bring a smile to the bank manager, but will pile further pressure on the national budget planners.

The main problem is that these increases are not productivity related. Everyone agrees that civil servant salaries are pretty desultory - with all the accompanying risk of a depletion of human resources and skills as the most competent leave the public sector to find work elsewhere. Yet plans to create a smaller and more streamlined administration have not materialised. In particular, of the 60,000 early retirements planned over the last three years, only 600 offers have been taken up. The result has been continued inefficiencies, a wage bracket that represents 13% of GDP, and little or no employment for new jobseekers.

On the plus side, at least the wage increases should foster some demand-driven growth as civil servant pockets are replenished. That said, civil servants comprise less than 10% of the working population - the impact of civil servant wage increases on aggregate national demand is therefore more marginal than that exercised by a good harvest on rural incomes. Moreover, such pump priming runs the risk of aggravating the trade deficit.

The other major risk factor for the national budget is petrol prices. In his 2004 budget forecast, Finance Minister Fathallah Oualalou predicted an average price of $25 per barrel. As a result, with prices within sniffing distance of the $50 mark over the summer, the Caisse de Compensation, in charge of adjusting the price of petrol products to local distributors, reached a Dh1bn deficit in the first half of the year - with an added half billion during July and August, according to an Energy Ministry source quoted in L'Economiste.

While fuel prices have been adjusted upwards, hefty petrol import bills are an unwelcome addition to the Finance Ministry's concerns. In particular, the price regime has been criticised as constituting a considerable threat to budgetary security, especially if global petrol prices continue to evince such volatility. The 2005 budget is said to be based on a $32 per barrel reference price. For every additional dollar, the budget will have to fork out an extra Dh300m (around 27.3m euros) per year.

This all leaves the fiscal authorities with little room for manoeuvre. The main positive factor is the planned listing of 16% of Maroc Telecom. If the operation works out well, up to Dh10bn (around 910m euros) could be gained, although half of that sum will go to the Hassan II Fund for Economic and Social Development, a fund that works outside the government budget.

The 16% listing, if it manages to attract foreign interest (there are even rumours that legislation might be amended to allow for a listing on foreign bourses), will allow the government to determine a market rate for Maroc Telecom's capital. This is important, as the authorities are also due to sell a controlling stake of the telecoms operator to Vivendi International, and the price of the stake is currently a matter of some discussion between the two partners.

Whatever the outcome, the sale of Maroc Telecom equity will unfortunately be a matter of budgetary necessity rather than luxury. While the 2004 budgetary forecast predicted receipts of Dh12bn (around 1.09bn euros), so far the only privatisation of note has been the part-listing of the BCP bank. Moreover the state-owned jewels are more or less all gone now, and of the 17 other companies due to be privatised in 2005, a total of Dh2bn (around 181m euros) in one-off receipts is expected.

Elsewhere, the 2005 budget will be marked by further fiscal reforms. On the one hand, customs tariffs are set to continue their secular decline, in line with agreements with Morocco's principal trading partner, the European Union. In line with this, VAT is set to take an increasingly preponderant role. Over the coming three years, this indirect tax will be unified from its four current rates to two - 19% and 12%. Local taxes are also to be simplified, a job currently being undertaken by the Interior Ministry in collaboration with the local councils.

Meanwhile, the reduction in income tax (termed IGR locally, after its French acronym), long demanded by businessmen, from 44% to 41.5%, looks like being postponed again this year. It was initially promised following discussions between the authorities and the businessmen's confederation, the CGEM, during preparations for the 2004 budget. But they were postponed when the government committed itself to several important social projects (especially to tackle slum housing). It looks likely to be once more deferred to a later date.

This of course is not in the economic operators' best interest. They point to the high income tax rates as a deterrent to hiring. In particular, the fact that the highest tax bracket becomes applicable with a wage of merely Dh6000 (around 545 euros) per month, means that even the marginally skilled are penalised. The authorities are reported to be considering lifting the top bracket to Dh10,000 (around 909 euros).

Besides continuing government projects already underway, the 2005 budget is also set to tackle the long-awaited health insurance dossier. Given the current environment, there are fears the content will be watered down substantially, and although the government was initially committed to the project starting in January 2005, one insurance professional stated recently that the starting date had been amended to "2005" (in other words, to some time during the year, rather than at the beginning).

There have therefore been some sleepless nights at the Ministry of Finance. The 2005 budget is said to be Oualalou's most difficult since becoming Minister of Finance in 1998. It remains to be seen if he can weave his magic once again.

Chris de Oliveira
http://www.oxfordbusinessgroup.com/weekly01.asp?id=1031 
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Moroccan movie grabs Alexandria festival first prize 
Morocco-Egypt, Local, 9/14/2004

Moroccan movie "In Casablanca, Angels do not Fly" was awarded the first prize of the 20th International Cinema Festival of the Egyptian coastal city of Alexandria after a unanimous vote of the Jury. The Moroccan movie, by director Mohamed Asli, was chosen by the Jury chaired by French director Ive Bolsi and a number of jury member from Egypt, Tunisia, France, Spain and Syria.

The Palmares of the festival will be announced on Tuesday at a press conference to be moderated by movie critic Raouf Tawfik, president of the festival. The awarding ceremony will take place later the same day.

The Moroccan movie tells of villagers coming down from the Atlas mountains seeking jobs in Casablanca and experiencing the hardships of the big city.

The movie was presented in several festivals, namely in Cannes, Asilah (Northern Morocco) at the South-South festival, as well as in the First International Festival of Sale (twin city of Rabat) that wound up last Saturday and awarded Abdessamad Miftah Elkheir, starring in the movie, best masculine actor.

Some 45 Arab and foreign movies have been shown in the Alexandria Cinema festival http://www.arabicnews.com/ansub/Daily/Day/040914/2004091427.html 
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Morocco to Lift Ban on Dairy Cow Imports, But Stringent Restrictions Will Remain
07-14-2004 -- 147th issue - June 2004

It is not the just crude oil prices that have been on an upward movement in Morocco, but the price of red meat has also been increasing.

The price hikes at the market is the result of higher prices of livestock and higher fattening cost. This is having a more pronounced impact on bovine meat in particular, with prices reaching DH 70 per kilo. But that's not all.
Morocco's banning of the import of animals has also something to do with the pressure on the market. That is likely to change as the government eased some of the restrictions on import.

While some sources point to speculative practices among meat traders in Casablanca and Rabat, analysts say there are more profound problems among cattle owners and livestock organizations nationwide. Indeed although the past two years' weather pattern has been favorable to agriculture, allowing the establishment of rich pastures and cheaper animal feed, this has not positively affected prices because of alleged speculative practices.
Analysts observed that many livestock owners prefer to hold on their cattle so as to avoid price reductions in line with lower feed price, and so demand has not been fully fulfilled keeping prices high and even increasing.

But the livestock owner association, the Association Nationale Ovine et Caprine (ANOC) disagrees and says there is no speculation from owners. It argues that because a great number of farmers are facing imminent debt repayment, they are now forced to sell all of their animals at low price. "Many could not even find buyers." This has led, according to ANOC to an excess of supply. But ANOC recognizes that the prices are too high and blames speculators who are further downstream in the distribution chain. The reasons according to ANOC are for pure profit.

Meanwhile, demand for red meat as measured by consumption per capita continues to climb despite that it is far below international norms. In Morocco per capita consumption of red mean is 14 kilo per year. That would represent about 28 pounds. This relative low consumption is attributed to the limited domestic production of red meat. Without a comprehensive policy that will enable the growth of domestic production, Morocco could soon be forced to look at foreign suppliers for import.

But the banning of the import of dairy heifers, due to fear of mad-cow disease, has had a direct impact on the bovine population in Morocco. This declining population has led to a counter performance in other related industries with declining output of milk and dairy products.

In 2000 Morocco ordered a ban on livestock and related products, such as meat, from countries that showed high incidence of mad cow disease. The authorities have also taken additional preventive measures such as boosting surveillance of animals. Prior to the ban, Morocco had put in place a system that tracked the health related documents of animals entering its territory.
The documents were to provide detailed information and data on the animal, include its exact place of origin. The veterinarian services have also instituted a higher level of control within farms and farmers were required to report any strange behavior. The third action has been to analyze sample of animal brain in slaughter houses. With growing cases of mad cow disease, a ban was in enacted in 2000.

Alarmed by the current situation of declining meat and dairy supply, the Moroccan department of agriculture has recently lifted the ban on cow imports, which becomes effective October 2004. But imports will be limited to specific European countries that have taken what the Moroccan veterinarian authorities consider adequate measures in terms of animal health control and the fight against dangerous diseases, including mad cow. For now imports will be limited to dairy heifers that are less than 30 months of age, therefore animals that have been under intense scrutiny since they were born. But since the ban will only take affect in fall, the prices of red meat, milk and dairy products are likely to continue to rise.
http://www.north-africa.com/free.htm 
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Club Med Strategy in Morocco
09-09-2004 -- Corporate/Tourism - from 149th issue

Holiday giant Club Méditerranée (Club Med) signed two partnership agreements with key players in the Moroccan tourism sector. They are the Accor group, owner of a series of hotels and lodging facilities, and financial firm Caisse de Dépôt et de Gestion (CDG). The agreements are likely to benefit Morocco's tourism industry thanks to a combination of strength, skills and industry leadership that each of the three bring. The announcement of the agreements was made as Club Med officially opened its new property called La Palmeraie, a holiday village boasting 900 beds. As part of the deal, Accor acquired a substantial portion of Club Med, with a 28.9% stake now under its control. The shares were purchased from two major backers of the founder of Club Med, Gilbert Trigano. They are the French bank Caisse des Dépôts et Consignations (CDC) and the Agnelli family, primary owners of Italy's FIAT, who owned Club Med shares through their Exor and Ifil units. As part of the deal, CDC sold 7.7% of Club Med to Accor, which also purchased the 21.2% controlled by the Agnelli family, for a total transaction valued at EUR252 millions. Accor will finance the acquisition of this shareholding by bonds convertible in shares or cash (ORANE), available to every shareholders, for an amount of EUR280 million, on the basis of one EUR40 bond per Accor share.

The Caisse des Dépôts et Consignations has agreed to underwrite the issue, if necessary in full, to facilitate the transaction. While this stake acquisition will have repercussions on the two companies global businesses, they will certainly have an impact in the actual markets where they are present, such as the very lucrative Moroccan market. In Morocco, Club Med also inked another agreement with the local bank Caisse de Dépôt et de Gestion (CDG), the country's biggest financial institution, which will support Club Med in expanding its presence in Morocco. Through this deal, Club Med will have the financial backing of the Moroccan government to open new villages in the Kingdom. In January 2001 already, Club Med and the Moroccan government signed a letter of intent that committed Club Med, with the support of the state, to strengthen its presence in Morocco in an effort to build a lodging and leisure infrastructure that would enable to attract up to 10 million tourists by 2010. The choice of CDG as a partner was critical in many aspects, including its financial capacity, its commitment to financing tourism-related investments and its relationship with the Moroccan government. The two organizations already know each other and have worked on joint projects. In October 2002, CDG facilitated Club Med take over of the management of La Medina Village of Marrakech. Club Med leased the village for a period of 17 years, which could be renewed at the end of that period. They also both participated in the launch of the construction of the Palmeraie village, before establishing in December 2002 a joint venture called Marrakech Villaginvest, in which 80% is controlled by CDG and the rest by Club Med. The joint venture was initially established to manage the Palmeraie project by searching for a site where it would be located and to finance the project for MAD 420 million, before handing it over to Club Med for a 17-year lease. Marrakech Villaginvest was transformed on June 12 into an sort of investment fund, whose mission is twofold. The first is to consolidate into a single holding all Morocco-based villages under the control of CDG and Club Med to put them under Club Med management control.

The second is to look for investment partners, domestic and international, that would finance Club Med projects in Morocco So what Club Med gets in terms of management responsibility include Smir and La Médina villages owned by CDG, La Palmeraie jointly owned by CDG and Club Med and, Agadir and Yasmina, two proprieties owned by Club Med. Meanwhile Club Méditerranée phases out its real estate holdings to exclusively focus on its core business, managing holiday villages. The two partners say their goal is to have assets valued at MAD 1.6 billion in three years, in which CDG will have a majority stake of 59%, Club Med 27%, and foreign investors such as the European Development Bank controlling the remaining stake. The two hope to double their investment in their various Marrakech sites through their joint venture from MAD 420 million to MAD 840 million in 2007. This agreement now allows CDG of Morocco to materialize a rapprochement with the Accor Group via Club Med. Accor is already established in Morocco with hotel properties that combined some 1,000 beds. It is also involved in financing the growth of Morocco's tourism sector through the Risma investment fund.
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