MOROCCO ECONOMIC HIGHLIGHTS

UNCLAS SECTION 01 OF 02 RABAT 001061

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 PBTS EPET ENRG ELTN MO MOROCCO ECONOMIC HIGHLIGHTS
SUBJECT: MOROCCO ECONOMIC HIGHLIGHTS


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Border Opening Soon?
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1. A flurry of construction near key Morocco-Algeria border
points is leading to speculation that the border will be
opened as early as the end of May. Algerian Minister of
Agriculture Said Barkat paid an official visit to Morocco
last month, visiting Morocco's locust control center in
Agadir and discussing cooperative strategies for combating
the scourge that affected West and North Africa last year.
He also traveled to Touroudant in the anti-Atlas to tour a
fresh vegetable and fruit production center. Algeria hopes
to profit from Moroccan expertise in growing and preparing
temperate fruits, citrus, and vegetables for export.

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Two U.S. Oil Companies Get Drilling License in Morocco
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2. Morocco granted onshore oil drilling licenses to two
U.S. companies last month to conduct evaluation of the oil
potential in the northeastern coastal region of Asilah-
Tissa. The contract was signed between the Moroccan
National Office of Hydrocarbons and Mines (ONHYM) and
"Direct Petroleum Morocco Inc" and "Anschutz Morocco
Corporation" of the United States, giving the two firms
exclusive onshore drilling rights in Asilah-Tissa region
during the 12-month duration of the contract. Morocco has
so far signed 15 offshore and onshore drilling contracts
with foreign companies, including with other U.S. firms,
though no major deposits have been found.

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Tourist Arrivals up, But Not Among Americans
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3. The number of foreign tourists coming to Morocco rose by
six percent in the first quarter of 2005 compared to the
same period in 2004. Most tourists came from western
Europe, with the French leading the pack with 280,000
arrivals, followed by Spaniards (80,000),Britons (40,000),
Germans (37,000),Belgians and Italians (27,000 each).
Meanwhile, the number of American arrivals fell by three
percent over the same period. Morocco received 5.2 million
tourists in 2004, 16 percent more than the year previous.
Marrakech was the most chosen destination, followed by
Agadir, Casablanca, Fes and Rabat.

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Remittances up 24 percent
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4. Remittances from Moroccan expatriates jumped by 25
percent in the first quarter of 2005 to reach nearly $1
billion. The average recorded during the period 2000-2004
for first quarter remittances was $820. Remittances are the
nation's top foreign exchange earner.

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GOM Raises Fuel Prices
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5. The state-set price of gasoline and other petroleum
products was increased nationwide on May 16. Prices rose
between five and 24 percent, depending on the product.
Gasoline went up 5.3 percent to $1.12 per liter, and diesel
rose eight percent to $0.73 a liter. The GOM said the move
was due to persistent high world oil prices. Morocco
imported $530 million worth of oil in the first quarter of
2005, a 51 percent increase over the same period last year.
Though the increase wasn't all due to prices, as the volume
of Morocco's crude oil imports increased by 15.4 percent.
The high cost of crude is expected to worsen the
government's budget deficit this year by $740 million.
Morocco has no appreciable oil resources and satisfies most
of its needs through imports. In 2004, the country imported
six million tons of crude oil for $1.7 billion.

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GOM to Cancel Debt of 100,000 Farmers
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6. The GOM will cancel the outstanding debt of some 100,000
small farmers amounting to $350 million. The debt
cancellation is intended to mitigate the effects of the
current poor agricultural season. Tarik Sijelmassi,
chairman of the executive board of "Crdit Agricole du
Maroc," said only small farmers are eligible for debt
cancellation, while other farmers hit by the bad season will
benefit from cancellation of overdue interest payback and
various fines.

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Under the Knife
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7. Plastic surgery is attracting a growing number of
foreign clientele to Morocco, a TV magazine reported.
According to "Echoeco," which interviewed European women who
came to Morocco to be operated on, cosmetic surgery is
attracting foreigners through a competitive package of good
post-operation care and competent practitioners. There are
40 plastic surgeons in Morocco, performing an annual average
of 80 to 100 operations each. Eighty percent of their
clients are women. Most of the operations performed in
Morocco are relatively minor ones that do not require a long
post-operation follow-up, such as mammoplasty, liposuction
and hair transplant.