MOROCCO STATE OF PLAY ON MCA

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." -------------- 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. -------------- 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. -------------- 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. -------------- Comment -------------- ¶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