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05CASABLANCA1295 2005-12-16 15:23:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Casablanca
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1. (SBU) Summary: Representatives of the Financial
Services Volunteer Corps (FSVC), accompanied by
Ambassador and Econoff, met with Prime Minister Jettou
on December 2 to discuss FSVC's programs and solicit
Jettou's thoughts on Morocco's financial sector.
Jettou described Morocco's business environment as
traditionally "protected" from competition and
disoriented by the challenges of recent trade
agreements and globalization. He characterized many
businesses as "undercapitalized, debt burdened and
lacking good management". He also discussed proposed
GOM initiatives for debt-refinancing of Small and
Medium sized enterprises (SMEs) and new tax exemption
incentives and asked about FSVC programs regarding
SMEs. End summary

2. (SBU) Jettou began by thanking FSVC for its work
with Bank Al Maghrib (the Moroccan Central Bank)and
raised the issue of how to develop the environment for
SMEs. FSVC discussed its efforts to help implement
Bank Al Maghrib Governor Jouhari's internal development
plan, highlighting a program using public affairs
professionals from the U.S. Federal Reserve to assist
Bank Al Maghrib officials to better communicate
policies. FSVC explained that its priorities are job
creation and economic growth, aligning itself with the
economic priorities of Jettou's administration. FSVC
President Andrew Spindler then proceeded to describe
recent activities directed toward SME development,
including a program to promote successful SME Initial
Public Offerings (IPOs) on the Casablanca Stock

3. (SBU) The Prime Minister described how small
enterprises (and Moroccan businesses generally) have
been traditionally sheltered from competition, but how
with the advent of trade agreements and a quickened
pace of globalization, it is impossible to protect
industries from international competitors. "Our
businesses need to learn to compete" Jettou explained,
adding that too many Moroccan enterprises are
undercapitalized, debt burdened and lack good
management. AMB agreed and added that many also fail
to invest sufficiently in business development and

4. (SBU) Jettou expressed the need to bridge the gap
between micro credit lending (maximum of approximately
US $2,000) and commercial bank lending (minimum of
approximately US $50,000) in order to help SMEs. He
explained that US $25,000 is the "magic number" and
acknowledged a current internal GOM debate over whether
it is more effective to employ incentives to raise
micro credit levels or decrease those of banks. Jettou
also mentioned GOM programs to refinance SME debt and
provide tax exemption incentives to attract skilled
younger workers to Morocco. The Prime Minister closed
the meeting with assurances that the GOM is committed
to passing all FTA-related legislation in time for
January 1, 2006 implementation date, and that the last
pieces of legislation are currently before Parliament.

5. (SBU) Comment: Jettou's private sector background
and reputation as a technocrat lend credibility to his
candid appraisal of private sector insecurity on the
implications of free trade agreements and greater
globalization. New GOM initiatives focused on
promoting economic growth and job creation through SME
financing and creative use of tax exemptions bode well
for improvement of the business climate and success of
the soon-to-be implemented FTA. Jettou conducted the
entire meeting in English, (Jettou is known for
beginning meetings with American interlocutors in
English before quickly returning to French) reflecting
his increasing comfort and interest in discussing
business and financial sector-related issues with
Americans. End comment