Cablegate: Morocco Economic Highlights: August

Published: Tue 28 Aug 2007 02:05 PM
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Article IV Consultations: Keep Up The Good Work
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1. (SBU) In an information note released on August 9, the IMF
outlined the positive conclusions of its 2007 Article IV
consultations with Morocco. The Board praised Morocco's
"remarkable economic progress" over the course of recent
years, noting that growth has accelerated, inflation has been
contained, while foreign investment has increased rapidly.
It urged Morocco to "consolidate and reinforce" this progress
in years to come, judging that current policies are
appropriate, but that the uptick in inflation in 2006
warrants continued vigilance by the Bank Al-Maghrib. The
Board also praised Morocco's recent budget performance, but
pressed for more ambitious targets, given the favorable
economic climate. The IMF also came down in favor of
Morocco's gradual loosening of restrictions on capital
account transfers, judging that the current exchange rate
regime is "compatible with external stability."
(Comment: The IMF's assessment is not a surprise, given the
progress registered here on a variety of fronts. Growth has
averaged 5.4 percent a year since 2001, up from the average
of 2 percent in the 1990s. The economy remains susceptible
to climactic variations, as is evident in the slippage of
growth as a result of this year's drought, but whereas in
previous years the disastrous harvest might have resulted in
no growth or negative growth, this year it is still expected
to reach 2 percent, given the strength of non-agricultural
portions of the economy. End Comment.)
Exports Up, But Still Lagging Imports
2. (U) Mid-year figures released this week by the Office des
Changes show a pick up of exports in June, but their
continued failure to match strong import growth. Overall
exports were up 4.8 percent through the end of June over the
same period in 2006, after rising only 1.2 percent in the
first five months of the year. Imports grew 12.6 percent,
however, leaving the trade deficit up 22 percent at 57.5
billion Dhs. The current account remained in surplus,
however, with continued growth in tourism receipts, transfers
from Moroccans resident abroad, and foreign investment.
(Comment: As discussed in reftel, the competitivity of
Moroccan exports remains a preoccupation here, as the
coverage ratio of exports to imports continues to decline,
and now hovers just above 50 percent.)
Tanger-Med Inaugurated
3. (SBU) The first stage of Morocco's flagship Tanger-Med
port was inaugurated in the presence of King Mohammed VI and
leading international shippers on July 29 with the arrival of
the "Evelyne Maersk," one of the three largest container
ships in the world. The port will have a capacity of 8.5
million containers per year when it is fully operational in
2012. (Comment: Tanger-Med is a key part of a coordinated
policy reform and infrastructure program which aims to make
Morocco a transhipment hub for the Western Mediterranean and
Southern Europe. Shippers present in Tangier, however, told
the Ambassador that the port will face strong competition
from new facilities in Algeciras, and that they intend to
divide their operations between the two locations, to avoid
local service interruptions and to keep competitive pressure
on shipping rates. End Comment.)
Moroccan Fisheries: Volume Down, But Value Up
4. (U) Morocco's Office National des Peche reported on July
30 that while the tonnage of fish landed in Morocco declined
by 2 percent in the first six months of the year over 2006,
the value rose 8 percent. The Cephalopod catch continued to
be the mainstay of the industry, accounting for 30 percent of
the catch's value, though it constituted only 6 percent of
its volume. Experts attribute the decline to a reduction in
the coastal fleet in Laayoune, and note that artisanal
catches have grown in value in Agadir, Laayoune and Tan Tan
as they have been better commercialized. Notable too is the
contrast between the fisheries in the Mediterranean and the
Atlantic: while the former declined by 12 percent in volume
and 19 percent in value, the more important Atlantic catch
(which represents nine tenths of national production) was
stable and saw an 11 percent rise in value. (Comment:
Artisanal fisheries constitute an important part of the
forthcoming MCC Compact, and will be further reinforced by
the support it extends to more effective commercialization of
that catch. End Comment).
Delphi Extends Its Moroccan Operations
5. (SBU) In a sign that our bilateral free trade agreement is
now having an increasing impact on investment as well as
trade, automotive parts giant Delphi Automotive Systems
signed an investment agreement on August 1 that will expand
its Tangier-based operations from 5,000 to over 8,000
employees by 2009. The 36 million USD investment will focus
on electrical and electronic car components.
Auchan-ONA Divorce Finalized
6. (SBU) The long-rumored divorce between French retail giant
Auchan and the King's holding ONA was publicly confirmed in a
terse press release on Friday, August 24. The French
conglomerate will sell its 49 percent stake in the company to
ONA for an undisclosed, but reportedly healthy amount.
Auchan will continue to honor its sourcing and assistance
contracts, which run through 2008, but indicates that they
will not be renewed. The seven year partnership has been on
the rocks since 2005, as an apparent result in differences
between the two partners over how rapidly their Marjane and
Acima retail outlets should expand into new markets. Auchan
requested arbitration in 2006, but lost the case, as a result
of which ONA was able to take control of the boards of both
Marjane and Acima.
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