IT'S THE ISLAMISTS, NOT THE POLISARIO! CASABLANCA

C O N F I D E N T I A L CASABLANCA 000773 SIPDIS SIPDIS STATE FOR NEA/MAG AND NEA/PI E.O. 12958: DECL: 07/05/2020 TAGS: ECON PBTS PGOV MO SUBJECT: IT'S THE ISLAMISTS, NOT THE POLISARIO! CASABLANCA BUSINESS ELITES ON THE WESTERN SAHARA Classified By: Principal Officer Douglas Greene for reasons 1.4 (b) and (d) ¶1. (C) Summary: Conversations with Casablanca business and financial elites reveal different priorities and perspectives than political elites on the issue of the Western Sahara. Whereas government contacts emphasize resolution of the Western Sahara conflict as a national priority, Casablanca business contacts rarely, if ever, initiate discussion on the issue and feel it does not impact them significantly. Business leaders, not surprisingly, advocate instead for different national priorities: improvements to the investment climate, educational initiatives and judicial reform. If specifically asked about the Western Sahara, many will echo broader Moroccan public opinion (that any negotiated settlement short of Moroccan sovereignty is unacceptable). However, our contacts also suggest Government of Morocco (GOM) commitment to address the issue internationally may not be sincere. Business contacts argue that the palace cannot afford the political costs that would come from the necessary concessions required for any negotiated settlement. Furthermore, they argue, the regime directly benefits from the territorial dispute despite the continuing costs of military occupation and would be unlikely to shift gears anytime soon, especially with 2007 parliamentary elections a year a way. End Summary. -------------- Risky Business -------------- ¶2. (C) In recent weeks, we have engaged business and financial sector contacts in discussions on political issues, including GOM policy on the Western Sahara. Some business contacts have suggested that GOM requests for U.S. intervention to "resolve" the Western Sahara dispute are not entirely sincere, arguing that the palace cannot afford the political risks associated with any sort of compromise, particularly with parliamentary elections a year away. Business contacts say that the palace prefers to protect its political capital for promoting domestic reforms and does not want to put at risk the good will the monarchy currently enjoys from the majority of the Moroccan populace. ¶3. (C) Business leaders also tell us that the regime directly benefits from the Western Sahara as a political issue. Western Sahara serves as an effective rallying cry for Moroccan nationalism and solidifies support for the palace role in protecting Morocco's security interests. Holding firm on the Western Sahara protects the regime's nationalist flanks and unites the Moroccan people behind the monarchy. As one business contact explained, "It is not a coincidence that the Green March happened shortly after two unsuccessful coup attempts. The Western Sahara has always served this purpose." -------------- Western Sahara- Now Where Is That Again? -------------- ¶4. (C) Business contacts say they are disengaged from the Western Sahara issue and are quick to identify other priorities, consistently citing the investment climate, education, and judicial reform as essential for Morocco's development. Western Sahara is seen as an abstraction that does not intrude on the active day-to-day lives of Casablanca's bankers, businessmen and young entrepreneurs. As one Casablanca-based banker remarked, "I was born in 1975, the year of the Green March, and this is the first time I've talked about (Western Sahara) with anyone since, (pause),I don't even remember." When asked about the costs of Morocco's continued occupation of the disputed territory, business contacts maintain the regime can continue to afford Western Sahara-related expenditures at current levels, although they express regret at the neglected reform initiatives the money could otherwise fund. "Yes it is expensive," one businessman responded, "But what is the alternative?" ¶5. (C) Many business leaders also maintain that resolution of the Western Sahara dispute is not a necessary precondition for improving relations (particularly economic) between Morocco and Algeria. They argue that the GOM is willing to engage and negotiate issues apart from Western Sahara discussions, but insist it is Algeria that continues to link Western Sahara to other "non-related" issues at the expense of increased bilateral economic ties. -------------- Fait Accompli -------------- ¶6. (C) Business contacts argue that a regime strategy of stalling on the Western Sahara suits the monarchy's long-term goal: unquestioned sovereignty over the disputed area. The longer the regime holds-out and avoids committing to a compromise-laden negotiated settlement, the more likely it will ultimately possess the region by default. This is referred to by some in Casablanca's francophone business community as the policy of "Fait Accompli." Business contacts comment on the regime's tactic of co-opting the region through investment in social services and infrastructure in a overt attempt to consolidate influence, likening it to Israeli use of settlements in the West Bank. As one prominent investment banker explains, "Yes, we spend a lot of money there, but it is not all military. Much of it is a long-term investment." ¶7. (C) Other business and financial contacts insist that undiscovered oil reserves in the Western Sahara will eventually compensate for the expenses of securing the region. These claims are highly speculative, however, and described by other contacts as "wishful thinking." That said, one oil-industry contact remains optimistic, arguing that an "oil-less" Morocco would be a "geological anomaly." -------------- It's The Islamists, Stupid! -------------- ¶8. (C) Comment: The Casablanca business elite, while located apart from the political capital, boasts close association with members of the royal inner circle. As such, the broader business community often has insights useful in understanding the King's strategy and motives. But business community disinterest in prioritizing Western Sahara puts it seemingly at odds with many political elites. With elections a year away, business leaders wary of growing Islamist encroachment in the public sector continue to press for U.S. attention toward other priorities, such as establishment of U.S. universities in Morocco and increased assistance for judicial reform. For them, it is the Islamists, not the Polisario, who pose the greatest threat. End Comment. GREENE