US embassy cable - 05RABAT850

C O N F I D E N T I A L SECTION 01 OF 02 RABAT 000850 
 
SIPDIS 
 
DEPARTMENT FOR NEA/MAG, NEA/PI 
TUNIS FOR MEPI RO 
 
E.O. 12958: DECL: 04/24/2015 
TAGS: ECON, EAID, KMCA, KMPI, PGOV, MO 
SUBJECT: MOROCCO STATE OF PLAY ON MCA 
 
REF: A. RABAT 0764 
 
     B. RABAT 0765 
 
Classified By: Acting Economic Section Chief Manuel P. Micaller for rea 
sons 1.4 (b) and (d). 
 
1. (C) Summary: Recent meetings with GOM officials, from 
working-level contacts to Ministers, reveal that Morocco is 
moving forward on developing its Millennium Challenge Account 
(MCA) Compact and has instituted a formalized coordinating 
structure.  According to these contacts, the GOM will focus 
its requests for MCA funding on rural development projects, 
particularly SME creation/support, literacy, and 
income-generating activities.  While the expanded dialogue 
with civil society, the private sector, NGOs, and other 
players has not yet commenced, the GOM appears to be getting 
its position and proposals down on paper before fully 
engaging with those groups.  End Summary. 
 
2. (C) During a meeting with visiting NEA PDAS Elizabeth 
Cheney, Prime Minister Jettou said that Morocco was moving 
forward with developing its MCA Compact (Ref A). The GOM was 
conducting a series of ongoing internal meetings and had even 
consulted with the visiting President of Madagascar, whose 
country recently concluded its MCA Compact. He assured PDAS 
Cheney that the GOM would be ready with concrete proposals 
for presentation to the MCC in "a few weeks." 
 
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MCA Team and Coordination Issues 
-------------------------------- 
 
3. (C) PM Jettou also reconfirmed information on Morocco's 
MCA leadership team conveyed by Minister-Delegate for Foreign 
Affairs Taieb Fassi-Fihri during his March visit to 
Washington.  Fassi-Fihri had been assigned the role of 
coordinator leading Morocco's MCA compact process, with MFA 
Director for Bilateral Affairs Youssef Amrani assuming a 
day-to-day management role. Fassi-Fihri would largely 
reconstitute his effective FTA negotiating team but would 
also include some departments and ministries not represented 
during FTA negotiations. 
 
4. (C)  Fassi-Fihri's discussions with Cheney (Ref B) 
revealed that inter-ministerial discussions were proving 
highly complex.  Fassi-Fihri had had some difficult internal 
discussions with other ministries as each advocated for his 
own priority sectors and activities.  The Ministry of Finance 
in particular was uneasy with the new MCA process. 
Fassi-Fihri had argued to Finance Minister Oualalou that the 
MCA Compact's inclusive approach and integrated program 
strategy will help Morocco in future discussions with the 
World Bank and other NGOs. 
 
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Specific Proposals: Rural Development 
------------------------------------- 
 
5. (C) During his meeting with PDAS Cheney, PM Jettou hinted 
that Morocco's MCC proposals would focus on SME promotion 
(and possibly microcredit) and rural development.  While he 
solicited USG assistance in the health care sector, he 
clearly understood that such projects did not fall under the 
scope of MCC guidelines.  Jettou's emphasis on SME and rural 
development has been echoed by other Economic Section 
contacts in recent discussions. 
 
6. (C) Fassi-Fihri told Cheney that the GOM is fully 
mobilized on the MCA process.  He said that the GOM was 
looking to MCA to support integrated development programs 
targeting rural areas and stemming migration from rural to 
urban areas.  Morocco's specific goals within this broad 
framework included reducing income and literacy disparities 
between rural and urban areas.  Fassi-Fihri said that Morocco 
would present its preliminary MCA draft compact by late May 
or early June. 
 
7. (C) On April 8, Econoff met Driss Benhima, Director of the 
Agency for the Development and Promotion of the North, during 
a MEPI-Funded Conference hosted by the American Legation 
Museum in Tangiers.  Benhima told Econoff that he had been 
tasked to develop a proposal for MCA funding; he showed 
Econoff his working copy.  While in draft form, the proposal 
looked fairly complete and detailed a tourism development 
program aimed at reducing poverty in northern Morocco. 
 
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Dialogue Process 
---------------- 
 
8. (C) Fassi-Fihri advisor (and FTA Coordinator) Houda 
Marrakchi told EconCouns that Fassi-Fihri had not yet 
communicated instructions to his staff and that she herself 
was not yet directly involved in the MCA process. Marrakchi 
later told EconCouns that Fassi-Fihri's promise of an initial 
proposed draft compact in late May will likely be a "first 
draft of a draft" that will then be shared widely for 
discussion with civil society, the private sector, 
parliamentarians, and others as mandated by the compact's 
dialogue provisions. 
 
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Comment 
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9. (C) The GOM has an impressive grasp of many of the 
technical aspects of the MCA Compact process.   During the 
eligibility/qualification phase last year, working-level 
officials showed a similar understanding and peppered 
Econoffs with detailed, complex questions.  With the 
designation of Taieb Fassi-Fihri as MCA lead, the GOM has a 
solid team of technically sophisticated officials who led 
Morocco's FTA negotiations.  Based on this experience, Post 
believes that Morocco will present a well-drafted proposal 
and be ready to defend and explain the rationale behind 
specific projects.  While we have had some concern that the 
GOM had not yet launched the dialogue component of the 
Compact process, officials understand the requirement and are 
preparing to open the discussion more broadly within the next 
weeks.  The MCA dialogue requirement has been reinforced at 
many levels by both post and Washington visitors.  End 
Comment. 
RILEY