MOROCCO ECONOMIC HIGHLIGHTS

UNCLAS SECTION 01 OF 02 RABAT 000261

SIPDIS

SIPDIS

DEPT FOR NEA/MAG, NEA/OFI AND INL/AAE
DEPT ALSO FOR EB/TPP, EB/IFD AND DRL/IL
STATE PASS USTR FOR DOUG BELL
STATE PASS USAID FOR JENNIFER RAGLAND
USDOC ITA/MAC/ANESA FOR DAVID ROTH
USDOC FOR FSC/OIO AND CLDP
USDOL FOR ILAB
PARIS FOR ZEYA
LONDON FOR TSOU
ROME FOR ROSE

E.O. 12958: N/A
TAGS: ECON ELAB ENRG KIPR SENV MO
SUBJECT: MOROCCO ECONOMIC HIGHLIGHTS

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Government Raises Fuel Prices
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1. The Government of Morocco (GOM) raised prices on some
fuel products on Feb. 9 in a bid to relieve pressure high
international oil prices are putting on the state's subsidy
mechanism. Premium grade gasoline rose by 1.5 percent to
$1.17 per liter and diesel fuel rose by 12 percent to $1.03
per liter. The government raised prices twice in 2005, as
oil imports for the year were 65 percent higher than in

2004.

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GOM Puts Joblessness at 11.5 Percent
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2. The GOM's High Planning Commission (HCP) announced that
unemployment rose by 1.1 percent in the fourth quarter of
2005 compared to one year earlier, reaching 11.5 percent.
Urban unemployment at the end of 2005 stood at 19.4 percent,
up from 18 percent one year earlier, and rural unemployment
was 3.6 percent, up from 2.5 at the end of 2004. The GOM
estimates the jobless figure for urban educated youth in
their twenties at around 26 percent, while labor union
sources in Casablanca estimate the rate to be around double
the overall urban unemployment rate, or around 39 percent.
Meanwhile, the number of economically active people grew by
3.9 percent in 2005 to over 11 million.

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GOM Takes on Public Service Reform
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3. Over 38,000 of Morocco's 540,000 civil servants have
accepted the GOM's offer to retire early in exchange for
generous severance packages, part of the GOM's public
service downsizing campaign. The Ministry of Public Sector
Modernization has also altered work hours to reduce traffic
and make public services more accessible. Additional
reforms include competitive exams for hiring, overhaul of
the promotions policy, and development of more in-house
training. Morocco spends almost 13 percent of GDP on public
service wages, which have increased 7.8 percent per year
over the last eight years, roughly twice the economic growth
rate. Reforms are designed to address widely held
criticisms of the public service, including excessive
centralization of decision-making, lack accountability among
management, rigid and lengthy procedures and arbitrary
implementation of regulations.

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2005 Growth of 1.6 Percent
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4. Morocco's GDP growth for 2005 was in the range of 1.6
percent, significantly short of the government's target of
three percent. Non-agricultural GDP grew by 4.7 percent.
Overall growth was pulled down by poor performance in the
agricultural sector, which typically accounts for around 15
percent of GDP. According to the Ministry of Agriculture,
the 2005 cereal crop was down 57 percent from 2004 and 35
percent from the 1999-2004 average, due to both adverse
weather conditions and a locust attack. The mining and

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energy sectors grew by 5.7 percent thanks to the good
performance of phosphates.

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Patent Applications Hit Record High
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5. The Moroccan Patent and Trademark Office (OMPIC)
received 660 patent applications in 2005, an 18 percent
increase over 2004 and a new record. Twenty percent of
these applications were filed by Moroccans. OMPIC received
over 6,000 requests for trademark registration in 2005,
again 18 percent higher than in 2004 and also a new record.
Nearly 80 percent of trademark applications were made by
Moroccan firms.

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FTA Website Attracts 1.8 Million Hits
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6. A website for the U.S.-Morocco Free Trade Agreement
hosted by the American Chamber of Commerce in Casablanca and
financed with BFIF funds attracted 1.8 million hits in 2005.
Fifty-seven percent of the site's 35,000 individual visitors
were from the United States and 31 percent from Morocco.

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New Wind Power Project in Tangier
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7. Five companies, including General Electric, have been
pre-qualified to submit bids to build a 90 megawatt (MW)
wind-power farm near the northern city of Tangier. The 90
MW capacity will be added to an existing 50 MW, turning the
Tangier site into the largest wind-power park on the African
continent. The $220 million investment will avoid the
emission of 470,000 tons of carbon dioxide each year, and
will save 120,000 tons of fuel. The GOM also plans to
create a 60 MW wind farm near the southern coastal city of
Essaouira.