Identifier
Created
Classification
Origin
09RABAT389
2009-05-06 12:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Rabat
Cable title:
MOROCCO: VIRGINIA GOVERNOR'S VISIT SUCCEEDS IN
how-toVZCZCXYZ0000 PP RUEHWEB DE RUEHRB #0389/01 1261218 ZNR UUUUU ZZH P 061218Z MAY 09 FM AMEMBASSY RABAT TO RUEHC/SECSTATE WASHDC PRIORITY 0083 INFO RUCNMGH/MAGHREB COLLECTIVE RUEHAD/AMEMBASSY ABU DHABI 0437 RUEHTV/AMEMBASSY TEL AVIV 3575 RUEHCL/AMCONSUL CASABLANCA 4583
UNCLAS RABAT 000389
SIPDIS
SENSITIVE
STATE FOR EEB/CBA, H, NEA/RA AND NEA/MAG
E.O. 12958: N/A
TAGS: ECON EAGR BEXP BTIO ETRD ENRGMO PREL MO
SUBJECT: MOROCCO: VIRGINIA GOVERNOR'S VISIT SUCCEEDS IN
GENERATING BUSINESS IDEAS
REF: RABAT 0386
UNCLAS RABAT 000389
SIPDIS
SENSITIVE
STATE FOR EEB/CBA, H, NEA/RA AND NEA/MAG
E.O. 12958: N/A
TAGS: ECON EAGR BEXP BTIO ETRD ENRGMO PREL MO
SUBJECT: MOROCCO: VIRGINIA GOVERNOR'S VISIT SUCCEEDS IN
GENERATING BUSINESS IDEAS
REF: RABAT 0386
1. (SBU) Summary: Virginia Governor Tim Kaine explored
opportunities for deepening the economic relationship between
Virginia and Morocco with key Moroccan officials, focusing on
the already important agricultural trade and port
cooperation. On April 23, Prime Minister El Fassi said
Morocco was a country "on the move." Minister-Delegate for
Economic and General Affairs Baraka and Industry Minister
Chami separately described Morocco as eager to attract
foreign investment and trade but also ready to learn. On
April 24, Foreign Minister Fassi Fihri highlighted the
bilateral Free Trade Agreement (FTA) and proposed to use the
FTA as a means to expand cooperation in the North Africa
region by opening up to other Maghreb states. This message
focuses on economic issues; reftel covered political issues.
End Summary.
--------------
Pitching Virginia for Business
--------------
2. (SBU) On April 23, Virginia Governor Tim Kaine,
accompanied by Charge and D/PolCouns, had successive meetings
with Prime Minister Abbas El Fassi, Minister-Delegate for
Economic and General Affairs Nizar Baraka, and Minister of
Industry, Commerce, and New Technologies Ahmed Reda Chami to
discuss deepening the already strong trading relationship
between the Commonwealth and Morocco. Kaine noted that since
implementation of the United States-Morocco Free Trade
Agreement (FTA) in 2006, Virginian exports to Morocco had
doubled, and that Morocco now ranks third as a destination
for Virginia's agricultural products. Kaine emphasized that
part of the reason Virginia was a good place for investment
was because of the diversity of the state's economy and its
strengths in port facilities, agriculture and a burgeoning
high technology sector. The Port of Virginia is the second
most active on the East Coast of the U.S.; Virginia's USD 8
billion agricultural and forestry sector contributes
increasingly to Moroccan imports (particularly soy beans);
and Virginia's high technology sector is expanding from a
traditional base in telecommunications and defense to
biotechnology and renewable energy.
3. (SBU) The Governor also stressed the importance of good
governance to the business climate, noting Virginia had
implemented a web-based performance feedback mechanism for
citizens to provide continuous evaluation of the State
Government. He said that this system helped his
administration to focus budget cuts in areas least sensitive
to constituent concerns, and that the public response to this
program had been overwhelmingly positive.
--------------
Prime Minister: "Morocco is on the Move"
--------------
4. (SBU) Prime Minister Abbas El Fassi used his time with
Governor Kaine to showcase Morocco as America,s friend, a
progressive and moderate Arab state, and a country on the
move economically. El Fassi praised the long-standing
history of positive Moroccan-U.S. relations and a modern
manifestation of that relationship: the Millennium Challenge
Account.
5. (SBU) El Fassi pointed out several positive trends in the
country despite the world economic downturn's negative impact
on Moroccan exports, particularly textiles and automobiles,
and remittance income from Europe. He said the unemployment
rate had dropped from 10 to 9 percent last year; numbers of
impoverished people were declining; and the Government was
rolling out a program of free medical care for the 8 million
poorest Moroccans. The numbers of tourists visiting Morocco
had risen from 3 to 8 million in the last three years, and
added that record rainfall over the last year had produced
high crop yields, which would permit Morocco,s GDP to grow
despite the world economic crisis.
--------------
Business Opportunities in Morocco
--------------
6. (SBU) Ministers Baraka and Chami highlighted Morocco,s
own effort to improve both the country's infrastructure and
its business environment. Baraka described a "golden
triangle" in which Arabian Gulf investment finances Moroccan
companies that take advantage of Morocco's lower costs and
privileged access to export finished goods to Europe. Baraka
said that Morocco's economy is diversifying and that the
world financial crisis had highlighted the need for even
greater diversification. He said that Morocco has already
invested in renewable energy technologies, e.g., wind and
solar, in the hopes of taking advantage of increased energy
reduction/conservation goals in Europe. Baraka underscored
that under King Mohammed VI, Morocco had implemented economic
reforms much faster than in the past. He conceded, however,
that Morocco could still learn a lot from Virginia in
"cutting red tape" and in improved governance. Baraka was
particularly interested in Virginia's internet-based feedback
mechanism.
7. (SBU) Chami said that the combination of Moroccan
reforms, e.g., national reconciliation, the family code, and
improved human rights, and macro-economic discipline (budget
surpluses in the last two years, low inflation, and steady
GDP growth -- averaging 5.2 percent in recent years) had
afforded Morocco the opportunity to build increased capacity
in such areas as automobiles, electronics, textiles,
fisheries and artisanal handicrafts. It has also led to a
burgeoning business in "off-shoring." Chami underscored that
Morocco's "off-shoring" model provides businesses with access
to the 1.3-billion-person market of the European Union
because of Morocco's "advanced status" with the bloc.
8. (SBU) Morocco's improved investment climate, Chami said,
has created a virtuous cycle in which Morocco is even seeking
to move up the value-chain, for example, in phosphates, the
country's largest export, to export not just the raw
material, but phosphate derivatives like fertilizer as well.
The country is also implementing its "Green Morocco"
strategy, which he said had been inspired by the
U.S.-sponsored Millennium Challenge Account, through which
Morocco was investing (7 billion dirham -- approximately USD
850 million last year alone) in irrigation projects and "farm
consolidation," i.e., encouraging the replacement of many
small farms with larger more efficient ones. Morocco is also
investing in niche technology areas in hopes of developing
patents that can then be used generate domestic and
international revenue streams. Four of these areas include
advanced nanotechnology, microelectronics, and
biotechnologies in both plants and genetic technology areas.
9. (SBU) During a separate discussion on April 24 focused
mostly on political issues (reftel),Foreign Minister Fassi
Fihri praised the U.S.-Morocco FTA, without any of the
familiar complaints about how this has mostly benefited the
United States. Fassi Fihri asked Governor Kaine to carry
back to Washington the proposal that the FTA could be a
useful mechanism to expand cooperation and economic
integration in the North Africa/Maghreb region since the FTA
already contained a provision allowing for re-export of
goods, if there were a certain degree of Moroccan
value-added. He sought USG views on promoting this
possibility with other members of the Arab Maghreb Union.
Such an initiative could provide a possible practical
incentive to break the comprehensive political and economic
logjam with arch-rival Algeria.
--------------
Comment
--------------
10. (SBU) Governor Kaine's visit highlighted the depth of
the Virginia-Morocco economic relationship, and played a
useful role in reinforcing the messages that we convey on
investment and economic reform. The Virginia Port Authority
is expanding its relationship with its Moroccan counterpart,
Tangier-Med, which itself is aggressively moving into
Sub-Saharan Africa. This pact is a strong link for
agricultural commerce and the visit undoubtedly sowed the
seeds for future business opportunities between Virginia and
Morocco. End Comment.
*****************************************
Visit Embassy Rabat's Classified Website;
http://www.intelink.sgov.gov/wiki/Portal:Moro cco
*****************************************
Jackson
SIPDIS
SENSITIVE
STATE FOR EEB/CBA, H, NEA/RA AND NEA/MAG
E.O. 12958: N/A
TAGS: ECON EAGR BEXP BTIO ETRD ENRGMO PREL MO
SUBJECT: MOROCCO: VIRGINIA GOVERNOR'S VISIT SUCCEEDS IN
GENERATING BUSINESS IDEAS
REF: RABAT 0386
1. (SBU) Summary: Virginia Governor Tim Kaine explored
opportunities for deepening the economic relationship between
Virginia and Morocco with key Moroccan officials, focusing on
the already important agricultural trade and port
cooperation. On April 23, Prime Minister El Fassi said
Morocco was a country "on the move." Minister-Delegate for
Economic and General Affairs Baraka and Industry Minister
Chami separately described Morocco as eager to attract
foreign investment and trade but also ready to learn. On
April 24, Foreign Minister Fassi Fihri highlighted the
bilateral Free Trade Agreement (FTA) and proposed to use the
FTA as a means to expand cooperation in the North Africa
region by opening up to other Maghreb states. This message
focuses on economic issues; reftel covered political issues.
End Summary.
--------------
Pitching Virginia for Business
--------------
2. (SBU) On April 23, Virginia Governor Tim Kaine,
accompanied by Charge and D/PolCouns, had successive meetings
with Prime Minister Abbas El Fassi, Minister-Delegate for
Economic and General Affairs Nizar Baraka, and Minister of
Industry, Commerce, and New Technologies Ahmed Reda Chami to
discuss deepening the already strong trading relationship
between the Commonwealth and Morocco. Kaine noted that since
implementation of the United States-Morocco Free Trade
Agreement (FTA) in 2006, Virginian exports to Morocco had
doubled, and that Morocco now ranks third as a destination
for Virginia's agricultural products. Kaine emphasized that
part of the reason Virginia was a good place for investment
was because of the diversity of the state's economy and its
strengths in port facilities, agriculture and a burgeoning
high technology sector. The Port of Virginia is the second
most active on the East Coast of the U.S.; Virginia's USD 8
billion agricultural and forestry sector contributes
increasingly to Moroccan imports (particularly soy beans);
and Virginia's high technology sector is expanding from a
traditional base in telecommunications and defense to
biotechnology and renewable energy.
3. (SBU) The Governor also stressed the importance of good
governance to the business climate, noting Virginia had
implemented a web-based performance feedback mechanism for
citizens to provide continuous evaluation of the State
Government. He said that this system helped his
administration to focus budget cuts in areas least sensitive
to constituent concerns, and that the public response to this
program had been overwhelmingly positive.
--------------
Prime Minister: "Morocco is on the Move"
--------------
4. (SBU) Prime Minister Abbas El Fassi used his time with
Governor Kaine to showcase Morocco as America,s friend, a
progressive and moderate Arab state, and a country on the
move economically. El Fassi praised the long-standing
history of positive Moroccan-U.S. relations and a modern
manifestation of that relationship: the Millennium Challenge
Account.
5. (SBU) El Fassi pointed out several positive trends in the
country despite the world economic downturn's negative impact
on Moroccan exports, particularly textiles and automobiles,
and remittance income from Europe. He said the unemployment
rate had dropped from 10 to 9 percent last year; numbers of
impoverished people were declining; and the Government was
rolling out a program of free medical care for the 8 million
poorest Moroccans. The numbers of tourists visiting Morocco
had risen from 3 to 8 million in the last three years, and
added that record rainfall over the last year had produced
high crop yields, which would permit Morocco,s GDP to grow
despite the world economic crisis.
--------------
Business Opportunities in Morocco
--------------
6. (SBU) Ministers Baraka and Chami highlighted Morocco,s
own effort to improve both the country's infrastructure and
its business environment. Baraka described a "golden
triangle" in which Arabian Gulf investment finances Moroccan
companies that take advantage of Morocco's lower costs and
privileged access to export finished goods to Europe. Baraka
said that Morocco's economy is diversifying and that the
world financial crisis had highlighted the need for even
greater diversification. He said that Morocco has already
invested in renewable energy technologies, e.g., wind and
solar, in the hopes of taking advantage of increased energy
reduction/conservation goals in Europe. Baraka underscored
that under King Mohammed VI, Morocco had implemented economic
reforms much faster than in the past. He conceded, however,
that Morocco could still learn a lot from Virginia in
"cutting red tape" and in improved governance. Baraka was
particularly interested in Virginia's internet-based feedback
mechanism.
7. (SBU) Chami said that the combination of Moroccan
reforms, e.g., national reconciliation, the family code, and
improved human rights, and macro-economic discipline (budget
surpluses in the last two years, low inflation, and steady
GDP growth -- averaging 5.2 percent in recent years) had
afforded Morocco the opportunity to build increased capacity
in such areas as automobiles, electronics, textiles,
fisheries and artisanal handicrafts. It has also led to a
burgeoning business in "off-shoring." Chami underscored that
Morocco's "off-shoring" model provides businesses with access
to the 1.3-billion-person market of the European Union
because of Morocco's "advanced status" with the bloc.
8. (SBU) Morocco's improved investment climate, Chami said,
has created a virtuous cycle in which Morocco is even seeking
to move up the value-chain, for example, in phosphates, the
country's largest export, to export not just the raw
material, but phosphate derivatives like fertilizer as well.
The country is also implementing its "Green Morocco"
strategy, which he said had been inspired by the
U.S.-sponsored Millennium Challenge Account, through which
Morocco was investing (7 billion dirham -- approximately USD
850 million last year alone) in irrigation projects and "farm
consolidation," i.e., encouraging the replacement of many
small farms with larger more efficient ones. Morocco is also
investing in niche technology areas in hopes of developing
patents that can then be used generate domestic and
international revenue streams. Four of these areas include
advanced nanotechnology, microelectronics, and
biotechnologies in both plants and genetic technology areas.
9. (SBU) During a separate discussion on April 24 focused
mostly on political issues (reftel),Foreign Minister Fassi
Fihri praised the U.S.-Morocco FTA, without any of the
familiar complaints about how this has mostly benefited the
United States. Fassi Fihri asked Governor Kaine to carry
back to Washington the proposal that the FTA could be a
useful mechanism to expand cooperation and economic
integration in the North Africa/Maghreb region since the FTA
already contained a provision allowing for re-export of
goods, if there were a certain degree of Moroccan
value-added. He sought USG views on promoting this
possibility with other members of the Arab Maghreb Union.
Such an initiative could provide a possible practical
incentive to break the comprehensive political and economic
logjam with arch-rival Algeria.
--------------
Comment
--------------
10. (SBU) Governor Kaine's visit highlighted the depth of
the Virginia-Morocco economic relationship, and played a
useful role in reinforcing the messages that we convey on
investment and economic reform. The Virginia Port Authority
is expanding its relationship with its Moroccan counterpart,
Tangier-Med, which itself is aggressively moving into
Sub-Saharan Africa. This pact is a strong link for
agricultural commerce and the visit undoubtedly sowed the
seeds for future business opportunities between Virginia and
Morocco. End Comment.
*****************************************
Visit Embassy Rabat's Classified Website;
http://www.intelink.sgov.gov/wiki/Portal:Moro cco
*****************************************
Jackson