THE OTHER MOROCCO PART 2, ECONOMICS: MISERY IN THE

C O N F I D E N T I A L SECTION 01 OF 04 RABAT 000237

SIPDIS

DEPT FOR NEA/MAG AND DRL/NESCA

E.O. 12958: DECL: 03/19/2029
TAGS: PHUM PGOV PINR KDEM ECON MO
SUBJECT: THE OTHER MOROCCO PART 2, ECONOMICS: MISERY IN THE
TREES

REF: A. RABAT 234

B. RABAT 79

C. RABAT 65

D. RABAT 179

E. RABAT 124

Classified By: Pol Couns Craig Karp for reasons 1.4 (b) and (d)

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Summary:
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1. (C) In February, Berbers in the snow-bound region of the
Middle Atlas Mountains felt disconnected from Morocco's
broader economic boom. They expressed anger at the
urban-centered influence networks that they said treated
their villages and raw materials like chattel, preventing
communities from benefiting from their own resources.
PolOff, on an extended field visit, also heard a specific
allegation of high level Ministry of Interior (MOI)
corruption. Villagers said that tribal economic conflicts
had a sometimes destructive influence on local development
abetted by authorities. Fortunately, the heaviest
precipitation in 30 years, while causing some damage, is
expected to sharply boost agricultural output. Despite this
boon, unless the government is able to address the deeper
economic and social faultlines that contribute to peoples'
sense of unhappiness, its broader economic reform plans may
falter. End Summary.

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The "Three Vs" and the "Two Moroccos"
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2. (C) The relatively new wealth of Morocco's cities and
coast is exemplified by what the country's growing middle
class calls "The Three Vs": Voitures (cars),Villas (newly
built homes) and Visites (tourist visits to Europe and the
United States). Many call it "Morocco on the Move."
However, this affluence contrasts with a poverty of mud homes
and subsistence living in Morocco's agricultural Middle Atlas
region. Rural agriculture, dependent on weather cycles,
continues to employ 40 percent of the workforce. Over two
thirds of Morocco's poor live in rural areas. Illiteracy
rates outside cities sometimes top 60 percent.


3. (C) Although the wealth divide in Morocco is not new, the
perception, justified or not, among Morocco's central Amazigh
(Berber) peoples is that they have benefited less from recent
growth than the country's predominantly Arab urban centers
and coast, fueling resentment. This feeling persists despite
significant and growing government expenditures in rural
areas (Ref A). During a trip to the Middle Atlas Mountains
from February 3-6, PolOff saw leaky roofs, sagging walls,
damp, unfinished mud floors and cramped conditions. He also
heard complaints of how limited government resources,
exacerbated by corruption and inefficiency, hamper snow
clearance and provision of emergency services leading to
hunger, anger, despair, and loss of trust. In 2008/2009, 600
homes in the Atlas Mountains collapsed and 300 people died
from weather-related incidents.


4. (C) Thirty-four-year-old Ali Akbouch, who lives in a
hamlet with no name 40 kilometers outside the Middle Atlas
town of Khenifra, loves books, making him a rarity in his
largely illiterate area. This past winter, Morocco's worst
in 30 years, he recounted during a visit to his home, he had
to burn some of his books to stay warm. As a result of water
damage from rain and snow, he will have to destroy his home
and rebuild it in the spring, if it does not collapse on him
first. Other than subsistence farming, day laboring, or
illegal emigration to Europe, Akbouch said he and his thirty
neighbors have few options for work. According to Akbouch,
they live on the equivalent of one USD a day.

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Decentralization's Promise: Weaken the Center, Strengthen the
Whole
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5. (C) King Mohammed VI, having publicly stated that
Morocco's old, security and influence-based system of
governance was no longer economically or politically
sustainable, launched a series of mutually reinforcing
reforms predicated on the belief that increased economic
opportunity would lead to broader popular political stability
and satisfaction; and vice versa. Among these reforms is a
flagship decentralization plan that is designed to give
regions room for more independent economic initiatives, and
improve their ability to meet local citizens' needs, without

RABAT 00000237 002 OF 004


upsetting national unity. However, Lahcen Oulhaj, former
college classmate of the King and Dean of the School of Law
and Social Sciences at Rabat's Mohammed V University,
explained that while the theory behind the decentralization
initiative was sound, execution was not. "People at the
other end of the chain must feel like they have a say in the
economic decisions that affect their lives and we are not
there yet."

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Trees, Tribes and Trouble
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6. (C) The village of Tikajouin lies nestled at the foot of
some of the Middle Atlas Mountains' tallest and most scenic
cedar-covered peaks. A mere 19 kilometers from a main route,
on February 3 the village of 3,000 residents had been mostly
cut off from the rest of Morocco for almost three months
because local authorities had not cleared the road of snow.
PolOff's vehicle had to be towed eight kilometers into town
by a tractor. Upon arrival, the village's isolation and
poverty, and its residents' desperation, became immediately
evident. Slushy raw sewage ran through muddy streets, which
were lined with empty shops, aimless adults and children not
in school.


7. (C) Villagers sitting in a bare tea shop vented
frustration at the perfidy of neighboring fellow Amazigh
tribes who practiced "economic warfare" against them. They
also cursed the Casblanca-based "Mafia" that they said
exploited their tribal cedar resources without providing any
benefit. In many conversations during the trip, both
literally and figuratively, Casablanca seemed to represent a
distant, wealthy, and predatory "Arab" Morocco. The tea shop
group said that the closed road had made it difficult for the
village to get supplies and food, and warned of incipient
hunger.


8. (C) One man pointed in the direction of nearby
tree-covered slopes saying, "There is enough wealth there to
feed this village, but we can't touch it." Others explained
that parts of Moroccan law, which they said were based on old
French colonial codes, gave their tribe usage rights to the
resources within a defined area. However, through bribery
and manipulation of permits and laws, "powerful interests"
from Fes, Rabat and Casablanca (Morocco's traditional Arab
power centers) had managed to secure cutting rights and block
the tribe's attempts at subsistence harvesting. "We know
these forests and would use them with respect, but the
'Arabs' cut and move on." Villagers did not, however, have
an idea of how much wealth the timber actually represented.
They simply knew that they were not benefiting from its
potential and not participating in decisions on its use.


9. (C) "Don't let anyone tell you otherwise," a man said
ruefully, "tribalism is very strong here." Residents accused
the central government, Caids (local Ministry of Interior
officials) and local municipal councils of playing tribes
against each other to keep them from organizing for rights
and services. The villagers of Tikajouine were in a
several-years-long dispute with their neighboring tribe over
access to a weekly market in a nearby town. The market was
in a different commune (county) and tribal area, and the
other tribe prevented Tikajouin's farmers from driving there
on market day, sometimes with road blocks and fists, in order
to preserve their economic monopoly. Tikajouin residents
were forced to travel almost 80 kilometers to another market,
raising their transport costs and prices. They claimed the
Caid in the nearby town looked the other way because he
received bribes and a cut of the sales at the market.


10. (C) Village elders led PolOff through the snow to eight
homes that had collapsed after recent rains, which had also
overfilled a shallow sewage trench. "This is our reality,"
an old woman said. However, in a reflection of the "two
Moroccos'" contradictions, there was cellular and Blackberry
coverage during the entire visit, reaching where food and
government services did not. After an MOI official spotted
PolOff, a snow plough arrived, having cleared the three
month's worth of blockage from the main road into the
village. However, authorities did not in any way interfere
the visit.

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How The Resource Scam Works: High Level Corruption
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11. (C) Ahmed Mazouzi (strictly protect),a Rabat based
notary and professional mediator at the non-profit National
Center for Mediation (strictly protect) explained that the

RABAT 00000237 003 OF 004


MOI has sole and unsupervised authority to issue tribal
leases to third parties to exploit natural resources in
tribal territory. A legally stipulated portion of royalties
and profits are mandated to be set aside in trust accounts,
again managed by the MOI. By law, proceeds are to be used
for local development projects within the community affected
by the tribal lease. However, Mazouzi said, "Much of the
money goes to senior MOI officials," and also to local
councilors and corrupt tribal leaders. He said this practice
is pervasive nationally. Mazouzi singled out a particular
MOI official by name, known to the Embassy, but we have no
independent verification of his allegations. This official
was recently moved into a position where he has little
authority at the Ministry.

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Micro Credit Debt Bubble About to Burst?
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12. (C) Tikajouine residents complained bitterly about debt
repayment notices they were receiving linked to micro-loans
they had taken out from a variety of community lenders set up
by the government or private banks. Comments alternated
between anger at banks for threatening borrowers over
non-payment and frustration with borrowers for taking out new
loans to pay old loans. With no effective national credit
reporting system, Moroccan banks have little ability to track
individuals' debt loads. Tikajouine leaders said that
financially illiterate farmers have no real understanding of
loans and "borrow into the abyss" during lean times, such as
this past winter. The need to borrow was given impetus by
the difficulty in grazing livestock in snow-covered fields.
Two hundred and twenty head of cattle and sheep died this
past winter in Tikajouine from exposure, starvation and
illness. Interlocutors said that this micro-credit debt
issue was pervasive in the area.

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Civil Society Plays a Role
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13. (C) In the town of Tounfite, an extremely lively meeting
with two women's organizations on February 5 focused on
requests for assistance in accessing international markets
for handmade goods such as Berber carpets and handicrafts.
Women are the key drivers behind much of the economic
development in the area - a fact discussed with Tounfite's
Caid (Ref A). Unlike in Tikajouine, the people of Tounfite
focused on wanting to work rather than wanting assistance.
They complained that there was not one saw mill or furniture
factory to employ villagers in the heavily forested region
saying, "Everything goes to Casablanca."


14. (C) PolOff encountered a pervasive and somewhat
self-defeating culture of governmental dependence (Ref A).
However, civil society organizations, although maligned for
being too numerous and micro-focused, are playing an
important and evolving role in sparking and channeling
communities' nascent sense of self development. Local NGO
leaders sought technical assistance and training,
particularly in organizational management and project
execution.

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Rains A Mixed Blessing
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15. (C) PolOff visited the area at the height of Morocco's
heaviest rain and snowfall in almost 30 years. The three
months of cold and rain colored opinions and gave the whole
region a drenched and hangdog feel. In marked contrast to the
glee that first greeted the rains after 10 years of drought,
farmers in the Khenifra province expressed fear that their
fields would be too soggy to plant. Forage for the fat and
satisfied looking livestock wandering the region abounded,
but vegetables and crops were scarce because roads were
washed out, preventing farmers from taking goods to market.
There were many flooded fields. Villagers said that the
precipitation was good for the water table, but the active
rains had adversely affected wells and drinking water with
silt and sewage overflow. The normally well maintained main
roads along PolOff's route were cratered with erosion
potholes and often blocked by mudslides. However,
nationally, the overall outlook for the agricultural sector
is bright (Ref D and E). Mohammed Antra, Chief of Staff to
the Governor of the Beni Mellal District, told PolOff that
water tables were at record levels, reservoirs were full and
planting was proceeding apace. He expected a banner year,
although he also expressed significant worry about the cost
of repairing weather-related damage to infrastructure.

RABAT 00000237 004 OF 004


Antra, who grew up in the area, added that friends he had not
seen in years were returning to the Beni Mellal from the
cities because they expected agricultural employment
prospects to improve due to the rain.

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Comment:
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16. (C) Success of rural economic development will depend in
large part on how citizens and local officials' translate
plans into effective programs. However, the web of
entrenched, monopolistic interests, relationships and
influence that has governed the mountain economy for so long
will be difficult to break. Effective decentralization and
more equitable resource management will require a fundamental
reordering of often corrupt power structures, and the
development of technical skill sets that are currently often
lacking in largely illiterate and uneducated rural
populations. End Comment.



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Jackson