Morocco: Political and Economic Changes and U.S. Policy

Morocco: Political and Economic Changes and U.S. Policy

98-663 F
August 10, 1998
CRS Report for Congress
Received through the CRS Web
Morocco: Political and Economic Changes and
U.S. Policy
(name redacted)
Specialist in Middle Eastern Affairs
Foreign Affairs and National Defense Division
Summary
This report describes the unprecedented strides in democratization and economic
liberalization occurring in Morocco, where the first opposition-led government took
power in February 1998. The government of this long-term U.S. ally is trying to
address endemic economic and social problems while adhering to stringent
International Monetary Fund economic guidelines. Active Islamist groups capitalize
on societal ills and create a troubling context for the government's efforts. They and
others are victims of human rights abuses. The overall human rights situation is
deficient; yet the opposition's rise to power is an improvement in an important aspect
of the record. Morocco's foreign policy is preoccupied with the Western Sahara, but
also focuses on North African affairs, the Arab-Israeli peace process, and Europe.
Relations between the United States and Morocco have a long history and are very good.
The House supports the referendum on self-determination for the Western Sahara,
H.Res.245, November 9, 1997. See also, CRS Report 95-855F, Western Sahara:
Background to Referendum. This report will be updated if changes in Morocco warrant.
Introduction. Morocco is a
Basic Facts
moderate, Arab regime strategically
located at the juncture of the
Population
30 million (July 1997 est.)
A t l a n t i c O c e a n a n d t h e
growth rate
2.02% (July 1997 est.)
Mediterranean Sea. It is ruled by
Gross Domestic Product $97.6 billion (1996 est.)
King Hassan II, whose interests in
growth rate
-2.5% (1997 est.)
d e m o c r a t i z a t i o n , e c o nom i c
per capita
$1,280 (1997 est.)
liberalization, Arab-Israeli peace,
Annual rate of inflation
2.5% (1997 est.)
Unemployment rate
16% (1997 est.)
and multilateral approaches to
Exports
$7.7 billion (1996 est.)
international crises coincide with
Imports
$9.8 billion (1996 est.)
many American policy priorities.
External Debt
$21 billion (1997 est.)
Sources: U.S. Department of State, 1997 Country
Reports on Economic Policy and Trade Practices and
CIA, The World Factbook 1997, both online.
Congressional Research Service ˜ The Library of Congress

CRS-2
Government and Politics. The Alaoui dynasty, which claims descent from the
Prophet Mohammed, has ruled Morocco since the 17th century, although the country was
a protectorate of France from 1912 until independence in 1956. King Hassan II, aged 69,
has led Morocco for 37 years. His heir apparent is Crown Prince Sidi Mohammed, aged
34, but Interior Minister Driss Basri is widely regarded as the second most powerful man
in the realm.
Soon after he ascended to the throne, the King initiated a process of gradual,
controlled democratization. A constitution providing for representative government was
approved in 1962, but two unsuccessful coup attempts in the 1970s derailed the process
for some time. The King's heightened attention to democratization in recent years may
result from concern about succession. He is of advancing age and has intermittent health
problems. The Crown Prince's fitness to succeed and personal conduct have been
questioned. The King's steadfast commitment to political change and a stable political
system may partly reflect his appreciation of his son's weaknesses. The Crown Prince
goes on selected foreign missions and has been increasingly visible at image-enhancing,
charitable events.
A 1992 Constitution created a unicameral legislature with more responsibilities than
previous parliaments. Constitutional amendments in 1996 changed the framework to a
bicameral parliament. On November 14, 1997, the 325-seat, lower house, Chamber of
Deputies, was elected by direct vote. On December 5, labor unions, professional
organizations, and local government officials selected the 270-seat upper house, the
Chamber of Counsellors, which has the unprecedented power to topple a government by
a vote of no confidence and may amend laws. Some older political parties had coalesced
over time into three blocs: the opposition Koutla (bloc), the King's loyalists of Wifaq
(consensus), and the Wasit or Centre independents. The Koutla's Socialist Union of
Popular Forces (USFP) won the most lower house seats and its leader, Abderrahmane El
Youssoufi, was named to be Prime Minister on February 4, 1998. The King had long-
desired an opposition government to bring fresh approaches to the country's problems and
revitalize the political system. Yet, the coup attempts of the 1970s had made him fear
threats to his regime and depend on Interior Minister Basri's sometimes brutal oversight
of national security. Therefore, the King would not grant the Koutla's demand for Basri's
removal, which had been the Koutla's condition for participation. When Youssoufi
abandoned that demand, he was chosen to the head what emerged as a coalition
government of seven parties from the Koutla and Centre. Basri remains Interior Minister,
with control over security matters. Elements of the non-security part of his portfolio have
been shifted to the Ministry of Administration. In addition, Youssoufi has rapidly
established himself as the King's point of contact with the government, supplanting Basri
in that role. Youssoufi has been attempting to reduce Basri's influence in other matters.
The few other retained ministers include Abdellatif Filali, a former Prime Minister who
is Foreign Minister. Koutla controls the economic portfolios and the government program
emphasizes economic and social issues, with unemployment and education topping the
agenda.
Parties Represented in the Chamber of Deputies
Party
Bloc
Seats
Socialist Union of Popular Forces (USFP)
Koutla 57
Constitutional Union (UC)
Wifaq

50
National Rally of Independents (RNI)
Centre
46

CRS-3
Popular Movement (MP)
Wifaq
40
Democratic and Social Movement (MDS)
Centre
32
Istiqlal (Independence)
Koutla
32
Popular National Movement (MNP)
Centre
19
Party of Progress and Socialism (PPS)
Koutla
9
Democratic Forces Front (FFD)
no bloc

9
Popular Constitutional and Democratic Movement (MPCD)
no bloc

9
Democratic Socialist Party (PSD)
no bloc
5
Organization of Democratic and Popular Action (OADP)
no bloc
4
Action Party (PA)

no bloc
2
Democratic Independence Party (PDI)
no bloc
1
The coalition is unwieldy and politics are dynamic. There is tension between the
USFP and Istiqlal, whose bond had been their common opposition to the government —
a foundation that was lost when they formed a government. The USFP is a secular party,
with socialist inclinations. Istiqlal is a rightist, traditional party, with Arabist/Islamic
tendencies, and, more to the point, with ambitions to head a government. Centre parties
in the coalition, such as RNI, which had governed in the past, reportedly find
compromises with their former opponents difficult. The Centre is disintegrating, with
some members participating in the government and others becoming opposition.
Meanwhile, Wifaq has been marginalized in the opposition, without a program or leading
spokesman. Wifaq and Centre dominate the upper house, whose power remains untested
because the government has not passed much legislation. Governmental changes are
occurring on the regional and local levels as well. An innovative decentralization
initiative is intended to bridge the wide gap between urban and rural areas. It gives
provincial and local assemblies authority and funds to carry out some development
projects and address education and health issues.
As in some other Muslim countries, Islamists are a political factor of consequence
and concern. The regime has dealt with them with a combination of tolerance and
repression. In June 1997, an unrecognized group, Al Isla wa al Tajdid (Reform and
Renewal), merged with an inactive, legal political party, the Popular Constitutional and
Democratic Movement (MPCD). Al Isla's leader, Abdelilah Benkiarane, became the
MPCD leader. Benkiarane declared the party's principles to be "Islam, the constitutional
monarchy, and non-violence," and vowed to work within the established governmental
framework.1 MPCD won 9 seats in parliament and supports the government's program.
It is organizing the grass roots, but with limited financial resources. The more radical Al
Adl wa al Ihsane (Justice and Charity) is banned and its leader, the politically
uncompromising Shaykh Abdessalam Yassine, has been under house arrest for nine
years. Yassine followers are active on university campuses and in urban slums. Student
members have been arrested in connection with university disturbances. Islamists' inroads
are attributed to their willingness to deal with economic and social ills -- an opening left
by ineffective prior governments, authoritarian non-Islamist parties lacking grass roots
programs and appeal, and the Interior Ministry, which has viewed Islamist demands as a
security threat not a social/economic issue.
Human Rights2. The human rights situation in Morocco has improved somewhat
in recent years, but the record remains poor. The 1997 parliamentary elections were
1 Africa Research Bulletin, June 1-30, 1996, p. 12301.
2 Based on U.S. Department of State, Morocco Country Report on Human Rights Practices
for 1997, January 30, 1998, online, and Amnesty International, Annual Report 1998, online.

CRS-4
flawed by attempts of both the government and the political parties to influence the results
through vote-buying and pressure tactics. The opposition, which made some of these
accusations, nonetheless took seats in parliament and power for the first time. This
change in government has marked progress in the exercise of some essential human
rights.
The U.S. State Department considers the Ministry of Interior responsible for most
human rights violations. Security forces perpetrate serious human rights abuses, torturing
detainees and ignoring due process. Abuses are rarely investigated thoroughly. Amnesty
International documents over 50 political prisoners and prisoners of conscience and many
disappearances. Islamists and Sahraouis, who seek self-determination for the Western
Sahara region claimed by Morocco, are often victims. The government questions Amnesty
International's numbers and its sources of information on the Sahraouis. The judiciary is
subject to corruption and Interior Ministry influence and not independent. Freedoms of
speech, the press, assembly, and movement are sometimes limited.
Economy3. The mixed Moroccan economy is based on agriculture, fishing,
manufacturing (textiles, clothing, metal-working), mining of the world's largest phosphate
reserves, tourism, and remittances from Moroccans working abroad. Because of the
leading role of agriculture, which still employs 50% of the people and accounts for up to
20% of the Gross Domestic Product (GDP), the economy is particularly sensitive to
climatic changes. In 1996, a good year climatically, GDP rose 12%. In 1997, erratic
rains caused a 25% drop in agricultural production and an estimated 2.5% decline in
GDP. The outlook for 1998 is good.
Morocco faces many challenges. It is a young country, with 38% of the population
below age 14. Some 46% of the people are illiterate. The official unemployment rate is
over 16%; but it is more than double that among the young. The World Bank estimates
that 40% of the population live below the poverty level. The government will be
constrained by International Monetary Fund (IMF) guidelines as it attempts to address
these problems. Since the early 1980s, Morocco has followed an economic program
backed by the IMF, World Bank, and Paris Club of international creditors. Reforms
include restraints on spending, tax and banking reforms, trade and foreign exchange
liberalization, privatization, and an anti-corruption drive. The results have been uneven.
For instance, a 6-year privatization program launched in 1992 targeted 114 businesses for
sale, but only 52 have been privatized. When the government, as anticipated, attempts
to privatize state-owned companies with large royal shareholders, it may face one of its
greatest challenges.
The illegal drug trade helps many poor, small farmers to survive. Morocco is a
major producer of cannabis and exporter of hashish to Europe. It also is a transit point
for cocaine shipments from South America to Western Europe. The government has
stepped up its war on drugs, but enforcement is erratic due to budget constraints and
corruption.4
3 Information mostly derived from the U.S. State Department, 1997 Country Report on
Economic Policy and Trade Practices and CIA, The World Factbook 1997.
4 U.S. State Department, International Narcotics Control Strategy Report (1997).
(continued...)

CRS-5
Foreign Affairs. Morocco's foreign policy generally follows a pro-Western course,
although the King is actively involved in Arab and African affairs as well.
Western Sahara.5 The Western Sahara is Morocco's national cause and the one issue
on which all Moroccans agree. Since 1976, Morocco has claimed the Western Sahara,
a region to its south that had been a Spanish colony. Morocco waged a protracted war
against the Popular Front for the Liberation of Saqiat al Hamra and Rio de Oro
(POLISARIO), which seeks independence for the region, and has physical control of
about 80% of the territory with 80,000 troops. In 1991, the U.N. arranged a cease-fire and
attained the parties' agreement to participate in a referendum to resolve the dispute. In
June 1997, the U.N. Secretary-General named former U.S. Secretary of State James Baker
to be his personal envoy to jump-start the process. Despite Baker's effort, enduring
disagreements between the parties over voter registration have continued to delay a vote.
It is unlikely that any Moroccan government would survive the loss of the Sahara or even
a major compromise on the issue.
North Africa. Morocco is a member of the moribund Arab Maghreb Union, with
Libya, Tunisia, Algeria, and Mauritania, and has good relations with all except Algeria.
Border disputes, the Western Sahara conflict, and spillover effects of the war between
Algeria's military regime and Islamist guerrillas impede Morocco's relations with Algeria.
Algeria backs the POLISARIO, which has refugee camps in southwest Algeria. Prime
Minister Youssoufi wants to end the freeze in Morocco's dealings with Algeria and reopen
borders. Morocco adheres to the U.N. sanctions on Libya, but has good trade ties with
it, notably a large barter agreement which enables Morocco to purchase Libyan oil.
Arab-Israeli Affairs. King Hassan II is very interested in Arab-Israeli peace and
Morocco has been the venue for many Arab-Israeli meetings. Some 10% of Israel's
population is of Moroccan-Jewish origin. After the 1993 Israeli-Palestinian Declaration
of Principles, Morocco began to normalize relations with Israel, starting with trade and
tourism. In September 1994, the two governments agreed to open diplomatic liaison
offices. The King said that full diplomatic relations would come only with a
comprehensive peace. The first Middle East/North Africa Economic Summit to forge an
economic base for regional peace was held in Casablanca in October 1994. However, the
King increasingly has become frustrated with the peace process stalemate and
developments in Jerusalem. He chairs the Organization of the Islamic Conference
Jerusalem Committee and has criticized Israel's construction in Jerusalem, accusing it of
trying to change the city at the expense of other religions.6 The King's adviser, Andre
Azoulay, disclosed that the King had decided to keep his distance from the Israeli
government, pending progress in the peace process.7
4(...continued)
Shipments to the United States are not significant.
5 See also, CRS Report 95-844, Western Sahara: Background to Referendum, July 27, 1995,
by (name redacted).
6 Reuters, June 4, 1998.
7 Agence France Press, October 22, 1997, online.

CRS-6
Europe. Relations with Europe are important to Rabat. In 1995, Morocco signed
a new association agreement with the European Union (EU). EU countries are Morocco's
major trading partners, accounting for 70% of its trade. Morocco's closest European
connections are with France and Spain. France is Morocco's largest investor and trading
partner, and over 700,000 Moroccans live in France. France formally supports the U.N.
mission in the Western Sahara, but is viewed by Morocco and the POLISARIO as
favoring Morocco's claims. Spain appears to be more neutral regarding the outcome of
a referendum. Sometimes, relations between Madrid and Rabat are disturbed by
Morocco's campaign for sovereignty over two Spanish enclaves in Morocco, Ceuta and
Melilla. Other difficulties in bilateral relations between Morocco and European
governments derive from drug smuggling, illegal immigration, and Morocco's attempts
to restrict fishing in its territorial waters.
Multilateral. Morocco has participated in international military efforts to address
crises. It was the first Arab state to condemn Iraq's invasion of Kuwait in 1990, and sent
troops to help defend Saudi Arabia. Morocco has supported U.N. sanctions against Iraq,
but provided humanitarian assistance to the Iraqi people. It contributed troops to the
U.N. peacekeeping force in Somalia and to the NATO-led implementation force (IFOR)
in Bosnia.
U.S. Policy. Moroccan-American relations are good. Morocco recognized the
United States in 1777. The two nations' 1787 Treaty of Peace and Friendship marks the
beginning of the longest unbroken treaty relationship in U.S. history. The United States
and Morocco share interests in peace and stability. Morocco provided troops that assisted
in implementing U.S.-supported policies in the Persian Gulf, Somalia, and Bosnia. The
economic summit in Casablanca exemplified Morocco's usually positive responses to U.S.
appeals to help further the Arab-Israeli peace process. The Voice of America's largest
transmitter is in Morocco, and the Peace Corps has been active there for more than 30
years. A more recent development is the United States' emergence as the second largest
investor in Morocco, after France.
The United States encourages democratization and efforts to improve human rights
practices in Morocco. The International Republican Institute and the National Democratic
Institute run programs in the country to strengthen parliamentary institutions and
democratic political parties. The United States officially supports the U.N. approach to
resolve the Western Sahara issue and the exercise of the right of self-determination
through a referendum, but is perceived to favor Morocco because it is a U.S. friend and
because some diplomats unofficially believe that U.S. interests would not be served by
an outcome that could destabilize Morocco. Congress expressed support for the
referendum on self-determination for the Western Sahara and former Secretary of State
Baker's mission in H.Res. 245, November 9, 1997.
U.S. aid to Morocco has been decreasing slowly and steadily. For FY1998, the
United States obligated $13.5 million in development aid, $2.2 million for the Peace
Corps, and $900,000 for the International Military Education and Training (IMET)
program. For FY1999, the Administration proposed to provide Morocco with $11.8
million in development aid, $2.3 million for the Peace Corps, and $900,000 for IMET.

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