US embassy cable - 05RABAT1690

UNCLAS SECTION 01 OF 02 RABAT 001690 
 
SIPDIS 
 
DEPT FOR NEA/MAG, NEA/PI AND INL/AAE 
DEPT ALSO FOR EB/TPP, EB/IFD AND DRL/IL 
STATE PASS USTR FOR DOUG BELL 
STATE PASS USAID FOR SARA BORODIN 
USDOC ITA/MAC/ANESA FOR DAVID ROTH 
USDOC FOR FSC/OIO AND CLDP 
USDOL FOR ILAB, NAO AND KARESH 
PARIS FOR ZEYA 
LONDON FOR GOLDRICH 
ROME FOR ROSE 
 
E.O. 12958: N/A 
TAGS: ECON, EAIR, ELAB, EAID, EFIN, EPET, SENV, EWWT, MO 
SUBJECT: MOROCCO ECONOMIC HIGHLIGHTS 
 
Ref: A) Rabat 1061; B) Rabat 1468; C) 04 Rabat 2292 
 
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GOM Raises Fuel Prices (Again) 
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1.  The Government of Morocco (GOM) raised fuel prices by 
five percent on August 7 in a move designed to lower the 
government's fuel subsidy burden.  Premium grade gasoline 
now costs $1.15 per liter, diesel fuel $0.90, and industrial 
fuel $0.30.  The GOM said the increase - the second in just 
three months - was a result of the persistent upsurge of 
international oil prices.  In May gasoline prices were 
raised by five percent and diesel fuel by eight percent (Ref 
A).  Energy Minister Mohammed Boutaleb said that in spite of 
the recent price increases the GOM will still spend between 
$550 and $660 million on fuel subsidies this year.  Morocco 
imported $2.6 billion worth of oil in 2004, a $260 million 
increase over 2003. 
 
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Unemployment Holds Steady 
------------------------- 
 
2.  Morocco's unemployment rate was 11.1 percent in the 
second quarter of 2005, unchanged from the same period one 
year earlier.  The GOM's High Planning Commission (HCP) 
announced August 8 that joblessness rose from 3.1 percent to 
3.7 percent in rural areas, and declined from 19.3 percent 
to 18.4 percent in urban centers, yielding an unchanged 11.1 
percent rate nationwide.  An increase of jobs in the 
building and construction sector of 17 percent was 
responsible for most of the gains in urban employment. 
 
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Traffic Soaring on Royal Air Maroc 
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3.  National air carrier Royal Air Maroc (RAM) expects a 20 
percent growth in international traffic in 2005, for a total 
of 3.7 million passengers.  RAM's low-cost affiliate Atlas 
Blue will fly an additional 800,000 people during the same 
period.  The high traffic is expected to push the airline's 
2005 revenue over the $1 billion mark, an 18 percent rise 
over the previous year.  RAM says it will add new 
international routes in 2006 to Munich, Beirut, Lome and 
Lille, and is considering additional lines to Accra and 
Brazzaville. 
 
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USTDA Grant for Tangier-Med Port 
-------------------------------- 
 
4.  The U.S. Trade and Development Agency (USTDA) signed a 
$370,000 grant for the Tangier-Mediterranean Special Agency 
(TMSA) which will finance a study of safety and security 
needs at the Tangier-Med port currently under construction 
on Morocco's Mediterranean coast.  The study will determine 
what equipment and training are necessary for the port to 
meet international port security standards and explore how 
to tie in the USG's Container Security Initiative (CSI) and 
Customs-Trade Partnership Against Terrorism (C-TPAT).  The 
port, located 35 km east of the northern city of Tangier, 
will receive cargo containers transiting the Gibraltar 
Strait to and from Europe and other continents. 
 
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Ambassador Visits Couscous Enterprise 
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5.  Ambassador and Econoff visited Daricouspate (Dari), a 
family-owned Moroccan enterprise specializing in couscous 
and pasta production, to discuss challenges and 
opportunities for Small and Medium Enterprises (SMEs) in 
Morocco (Ref B).  Dari recently launched a successful 
Initial Public Offering (IPO) on the Casablanca Stock 
Exchange.  Bankers from Finergy, the financial firm that 
structured Dari's IPO, were also in attendance.  Finergy is 
a relatively new investment bank (established two years ago) 
that specializes in SME financing. 
 
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Casablanca Stock Exchange's Busy Year 
------------------------------------- 
 
6.  The transaction volume on Morocco's Casablanca stock 
exchange reached $7.5 billion in the first five months of 
2005, four times more than in the same period of 2004.  Over 
30 percent of the market's transaction volume during that 
time resulted from Maroc Telecom's massive stock sale in 
December 2004 (Ref C).  The Casablanca exchange finished the 
first five months of the year up 3.6 percent.  Best sector 
performers were finance companies (17.7 percent), agri-food 
industry (13.7 percent) and building (4.5 percent).  Bad 
performers included mining companies (down 22 percent) and 
portfolio-holding companies (down 4.8 percent). 
 
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Jellyfish Invasion Bad for Beach Goers 
-------------------------------------- 
 
7.  A swarm of jellyfish stretching from the Balearic 
Islands in Spain to Wadi Laou in northern Morocco is 
plaguing holiday makers on Morocco's Mediterranean beaches. 
The Pelagia Noctilucam jellyfish delivers a painful burning 
sting which fades after several minutes.  The fear of 
jellyfish attacks has kept tourists off certain beaches, 
particularly around the town of Fnideq.