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.

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Risky Business
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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."

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Western Sahara- Now Where Is That Again?
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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.

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Fait Accompli
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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."

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It's The Islamists, Stupid!
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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