Identifier
Created
Classification
Origin
08RABAT442
2008-05-16 17:51:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Rabat
Cable title:
MOROCCO RECEIVES USD 500 MIL SAUDI GIFT
how-toVZCZCXRO6541 RR RUEHBC RUEHDE RUEHKUK RUEHROV DE RUEHRB #0442 1371751 ZNR UUUUU ZZH R 161751Z MAY 08 FM AMEMBASSY RABAT TO RUEHC/SECSTATE WASHDC 8579 INFO RUEHCL/AMCONSUL CASABLANCA 4092 RUEATRS/DEPT OF TREASURY WASHDC RUCPDOC/DEPT OF COMMERCE WASHDC RUEHEE/ARAB LEAGUE COLLECTIVE RUEHLO/AMEMBASSY LONDON 3611 RUEHFR/AMEMBASSY PARIS 5036 RUEHNK/AMEMBASSY NOUAKCHOTT 3748
UNCLAS RABAT 000442
DEPT FOR NEA/MAG
STATE PLEASE PASS TO USTR (BURKHEAD)
SIPDIS
SENSITIVE
E.O.12958: N/A
TAGS: ECON EPET EFIN MO
SUBJECT: MOROCCO RECEIVES USD 500 MIL SAUDI GIFT
REF: RABAT 00265
UNCLAS RABAT 000442
DEPT FOR NEA/MAG
STATE PLEASE PASS TO USTR (BURKHEAD)
SIPDIS
SENSITIVE
E.O.12958: N/A
TAGS: ECON EPET EFIN MO
SUBJECT: MOROCCO RECEIVES USD 500 MIL SAUDI GIFT
REF: RABAT 00265
1. (SBU) On May 6, the Moroccan Foreign Ministry announced that
Saudi Arabia had granted Morocco USD 500 million to help it weather
the shock of oil price increases. Over the previous fortnight
Foreign Minister Taieb Fassi Fihri visited Saudi Arabia, Kuwait and
the United Arab Emirates as a special envoy of the King. To date,
the latter two countries have not made similar offers.
2. (SBU) The GOM, through its Compensation Fund, subsidizes the
retail cost of gasoline, diesel, butane, gas, bread, flour, and
sugar (reftel). The cumulative effect of both rising world oil and
food prices is becoming increasingly apparent in Morocco. After a
year in which it essentially achieved a balanced budget for the
first time in decades, Morocco faces the prospect of a sizeable
budget shortfall that has already led one international ratings
agency to lower its outlook from "positive" to "stable." Many
analysts believe the actual cost of Morocco's Compensation Fund will
double from its current budgeted level of 20 billion MAD (USD 2.7
billion) to more than 40 billion (USD 5.4 billion),as it is based
on a world oil price of 75 USD per barrel.
3. (SBU) Analysts estimate that each increase above 75 USD in the
per barrel price of oil results in an additional 450 million MAD
(USD 60.8 million) obligation for Morocco's Compensation Fund. With
oil reaching USD 125, Morocco is facing a USD 3.0 billion shortfall.
While the USD 500 million Saudi gift (we have assurances it is not
a loan) relieves immediate pressure, we note it represents only 17
percent of the projected shortfall. To date, the MFA has released
no additional details of the deal and has been non-committal and
vague in their responses to our requests for more information.
However, one local economic contact remarked, "Certainly, the Saudi
gift was welcomed, but the government was hoping for more."
RILEY
DEPT FOR NEA/MAG
STATE PLEASE PASS TO USTR (BURKHEAD)
SIPDIS
SENSITIVE
E.O.12958: N/A
TAGS: ECON EPET EFIN MO
SUBJECT: MOROCCO RECEIVES USD 500 MIL SAUDI GIFT
REF: RABAT 00265
1. (SBU) On May 6, the Moroccan Foreign Ministry announced that
Saudi Arabia had granted Morocco USD 500 million to help it weather
the shock of oil price increases. Over the previous fortnight
Foreign Minister Taieb Fassi Fihri visited Saudi Arabia, Kuwait and
the United Arab Emirates as a special envoy of the King. To date,
the latter two countries have not made similar offers.
2. (SBU) The GOM, through its Compensation Fund, subsidizes the
retail cost of gasoline, diesel, butane, gas, bread, flour, and
sugar (reftel). The cumulative effect of both rising world oil and
food prices is becoming increasingly apparent in Morocco. After a
year in which it essentially achieved a balanced budget for the
first time in decades, Morocco faces the prospect of a sizeable
budget shortfall that has already led one international ratings
agency to lower its outlook from "positive" to "stable." Many
analysts believe the actual cost of Morocco's Compensation Fund will
double from its current budgeted level of 20 billion MAD (USD 2.7
billion) to more than 40 billion (USD 5.4 billion),as it is based
on a world oil price of 75 USD per barrel.
3. (SBU) Analysts estimate that each increase above 75 USD in the
per barrel price of oil results in an additional 450 million MAD
(USD 60.8 million) obligation for Morocco's Compensation Fund. With
oil reaching USD 125, Morocco is facing a USD 3.0 billion shortfall.
While the USD 500 million Saudi gift (we have assurances it is not
a loan) relieves immediate pressure, we note it represents only 17
percent of the projected shortfall. To date, the MFA has released
no additional details of the deal and has been non-committal and
vague in their responses to our requests for more information.
However, one local economic contact remarked, "Certainly, the Saudi
gift was welcomed, but the government was hoping for more."
RILEY