Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 07RABAT1076, MOROCCO'S COMPETITIVITY GAP

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07RABAT1076.
Reference ID Created Released Classification Origin
07RABAT1076 2007-06-28 16:17 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Rabat
VZCZCXRO8615
RR RUEHTRO
DE RUEHRB #1076/01 1791617
ZNR UUUUU ZZH
R 281617Z JUN 07
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 6822
INFO RUEHAS/AMEMBASSY ALGIERS 4455
RUEHEG/AMEMBASSY CAIRO 2101
RUEHMD/AMEMBASSY MADRID 5726
RUEHNK/AMEMBASSY NOUAKCHOTT 3513
RUEHTRO/AMEMBASSY TRIPOLI 0182
RUEHTU/AMEMBASSY TUNIS 9316
RUEHCL/AMCONSUL CASABLANCA 3170
UNCLAS SECTION 01 OF 03 RABAT 001076 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PASS USTR FOR DOUG BELL 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EINV MA
SUBJECT: MOROCCO'S COMPETITIVITY GAP 
 
REF: CASABLANCA 102 
 
This cable is sensitive but unclassified.  Not for internet 
distribution. 
 
1. (SBU) Summary: Morocco's weak showing in the 
newly-published competitivity index of the World Economic 
Forum has again highlighted an issue that has sparked 
extensive public comment and debate in recent months, 
particularly in the context of the failure of Moroccan 
exports to become a locomotive for economic growth.  The 
Finance Ministry's respected Division of Studies and Planning 
published a detailed assessment of Morocco's competitive 
shortcomings in February, and spirited exchanges surrounded 
the topic at the June 12 annual meeting of the Moroccan 
exporters' association.  Key factors identified by both 
public sector experts and businesses themselves include the 
overvalued Moroccan dirham, a shortage of skilled labor, 
overconcentration by business on a limited number of 
primarily low value-added sectors, expensive logistics, and a 
fiscal regime that falls far short of regional rivals.  The 
impact is clear: Morocco ranked 72d in the WEF index, far 
behind regional leader Tunisia (in 29th place), and export 
growth from 1995-2006 averaged only five percent annually, so 
that the export coverage rate fell from 65 percent to 54 
percent over the period.  End Summary. 
 
2. (U)  While in this pre-electoral period, the GOM typically 
focuses its public comments on the reforms it has undertaken 
over the last five years, senior GOM officials are forthright 
in admitting that Morocco's export sector is not one where 
they have had much success.  In his remarks opening the June 
12 National Exporters' Meeting in Skhirat, Prime Minister 
Jettou highlighted a number of positive developments in the 
export sector, including growth in electronics exports (up to 
15 percent of Morocco's total exports in 2006) and the 
recovery of the textile-apparel sector in 2006 from its 2005 
downturn.  He conceded, however, that "Morocco's export 
performance had "fallen short" of the government's ambitions. 
 He argued that much more must be done and pressed for 
businesses themselves to take action to diversify Morocco's 
exports, particularly into high value-added sectors, a trend 
he argued the government's industrial policy (the "Plan 
Emergence") will foster.  He also urged business to update 
its management structures, increase its expenditure on 
research and development, and engage in more dynamic 
commercial promotion. 
 
3. (SBU) For their part, our business interlocutors, like 
business participants at the assembly, prefer to focus on the 
range of constraints they perceive in government policy. 
Skhirat participants cited Morocco's fiscal regime, with a 
company tax rate 75 percent higher than regional leader 
Tunisia; a lack of trained workers as a result of 
shortcomings in the education system; continuing weaknesses 
in Morocco's logistical base (despite recent improvements); 
and Morocco's overvalued exchange rate.  In a recent meeting 
in Casablanca, a senior executive with the General 
Confederation of Enterprises of Morocco (CGEM) echoed these 
themes, while also highlighting shortcomings in Morocco's 
judiciary and the continued inflexibility of Morocco's labor 
market, despite implementation of a new labor code in 2004. 
He and others, however, also concede the shortcomings 
identified by Jettou, attributing the failure to aggressively 
exploit market opportunities in part to language and cultural 
barriers. 
 
4. (U) Not surprisingly, all these topics also figured in the 
2007 WEF index.  Surveyed executives cited access to 
financing, tax rates and regulations, corruption, 
infrastructure and workforce issues as their major concern. 
Morocco's relatively restrictive foreign currency regulations 
were also cited by some respondents, as was inefficiency of 
the government bureaucracy and restrictive labor regulations. 
 In a sign of the stability of Morocco's political and 
economic framework, however, only a handful of respondents 
cited inflation, policy/government instability, and crime and 
theft as concerns.  Overall, Morocco was ranked in 72nd place 
in the survey, well behind regional leader Tunisia (in 29th 
place), behind Egypt (65th) and barely ahead of Algeria 
(76th). 
 
5. (SBU) The most comprehensive recent analytical examination 
 
RABAT 00001076  002 OF 003 
 
 
of these competitive issues comes from the respected Studies 
and Planning Division of the Finance Ministry, which 
published a stark report in February detailing Morocco's 
competitive shortcomings.  It highlighted the continuing 
challenge through a range of negative statistics-- a steadily 
increasing trade deficit from 1994-2005, a decline in the 
import coverage ratio to just above 50 percent, the failure 
of exports to contribute more than 1.2 percent on average to 
annual economic growth (half the rate in Turkey and Tunisia 
and a third that of Romania), and a decline in Morocco's 
share in the world market, despite conclusion of free trade 
agreements with Turkey, the United States and others.  The 
only bright spot in an otherwise somber picture was Morocco's 
success in increasing its competitivity in exporting 
electronic components and information technology. 
 
6. (U)  The analysis of Ministry experts confirms the issues 
cited by businessmen at Skhirat and in our own meetings 
regarding the key internal constraints facing Moroccan 
companies.  Morocco, it shows, is more expensive than its 
rivals in areas ranging from labor costs to the cost of 
logistics.  Labor costs, the Ministry argues, are increased 
not just by inflexibilities resulting from the labor code, 
but by the lack of education of most workers, which limits 
their productivity.  It points out that fewer workers have 
completed secondary school in Morocco than in any of its 
emerging market rivals, while only 20 percent of Moroccan 
companies provide training to their workers.  As a result, 
Moroccan productivity has slipped in recent years.  This, 
coupled with appreciation of the dirham against the dollar 
over the 1994-2005 study period, greatly worsened Morocco's 
position, particularly in comparison to Asian rivals which 
link their currency to the dollar.  The competitive impact 
was only cushioned by the dirham's slight depreciation 
against the Euro, given the fact that Europe absorbs 
two-thirds of Morocco's exports.  Even there, however, 
Morocco's market position has stagnated, with exports to 
France falling short of those of Tunisia. 
 
7. (U) Logistics is another key impediment highlighted by the 
Finance Ministry.  It estimates that transport costs 
constitute 20 percent of gross domestic product in Morocco, 
versus 10-16 percent in the EU and 15-17 percent in other 
emerging economies.  The cost of shipping a container from 
Agadir to France equals that of shipping a container from 
Istanbul to France, while the cost of crossing the Straits of 
Gibraltar is two to three time the cost of other similar 
crossings.  These issues were the focus of a recent meeting 
between Transport Minister Ghellab and the British Chamber of 
Commerce in Casablanca, at which textile exporters complained 
that transport times to Europe are twice what they need to 
be, with concomitant costs.  Participants pressed for the 
government to "reconsider" its international transportation 
policy and work to reduce these costs. 
 
8. (U) The Finance report also documents the shortcomings of 
Moroccan companies.  Few invest in research and development 
(total R and D spending is negligible, as only 5 percent of 
companies invest in this area, far less than their 
competitors in other emerging markets), and companies are 
dependent on a limited number of products and markets.  Thus 
phosphates and textiles account for 50 percent of Moroccan 
exports, while France and Spain alone represent 50 percent of 
Morocco's international market.  While some successes have 
been registered with high tech products, these still only 
account for 10 percent of Moroccan exports, while low-tech 
and agricultural exports still account for over two-thirds. 
Another telling statistic cited in the report is that the 
world's most dynamic 10, 50 and 100 products only constitute 
1.3, 1.4 and 1.7 percent (respectively) of Moroccan exports, 
whereas they form 25, 52, and 70 percent of trade worldwide. 
 
9. (SBU) Comment: Morocco is working on many of these issues, 
through both its ambitious effort to improve the country's 
logistical base and encourage investment in key industrial 
sectors.  These measures have clearly not been as successful 
as the government would have wished in improving Morocco's 
overall competitiveness, while equally critical issues 
regarding the country's tax regime and legal system remain to 
be addressed.  End Comment. 
 
****************************************** 
Visit Embassy Rabat's Classified Website; 
 
RABAT 00001076  003 OF 003 
 
 
http://www.state.sgov.gov/p/nea/rabat 
****************************************** 
 
RILEY