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."

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MCA Team and Coordination Issues
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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
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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
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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