Moroccan, French talks focus on debt conversion
Morocco-France, Economics, 10/1/1998

The Joint Committee of Moroccan and French heads of enterprises will convene its 11th session on Friday in Paris, a release by the Moroccan industrial federation (CGEM) said.

The meeting, to be attended by senior Moroccan and French officials, features round tables on Moroccan-French financial cooperation, particularly the interest aroused by the prospects for reconverting Morocco's debt to France into private investments.

The encounter is held on the fringes of the official visit that Morocco's Prime Minister Abderrahmane Youssoufi starts today to France.

Youssoufi's agenda will be dominated by the specter of the huge debt burden which "suffocates" Morocco's development and prosperity, as the Moroccan Socialist Premier put it recently. While in Paris, Youssoufi will try to snatch a new French commitment to convert more Moroccan debt into investments. The Moroccan global debt is estimated at $20 billion US, including $3.4 billion owed to France.

In 1996, France decided to convert 600 million French Francs ($120 million) into French participation in some Moroccan public and semi-public firms. In addition to this sum, France had canceled 400 million FF ($80 million) of Moroccan debt to France.

Rabat reached a similar accord with Spain in December 1996, whereby Madrid agreed to convert $520 million of Moroccan debt into investment projects in the country. The sum represented 40 percent of Rabat's overall debt owed to Madrid which stands at $1.3 billion. Similar moves are contemplated with Italy.

The Joint Committee of Moroccan and French Chiefs of enterprises will also examine ways to enhance bilateral partnership in various economic fields.

France is Morocco's major client and supplier. In 1997, Morocco exported 1.2 billion us dollars of goods to France, which represents 26.9 percent of all the North African country's exports to the world. imports were worth 1.6 billion dollars during the same year.

The French ambassador to Morocco, Michel De Bonnecorse, stressed the need to "alleviate the annual servicing" of Morocco's debt and to bring it to an affordable level of 20 percent of the budget.

In an interview with a Moroccan daily, the French diplomat said that France will make efforts to reduce the 6 percent debt service.

He told a Moroccan daily that his country is endeavoring to intensify cooperation in all fields with Morocco, citing a financial support of 4.5 billion French Francs in the form of soft term loans and the retreatment of five billion FF in debts through all existing procedures, including the cancellation of 400 million FF.

He added that education and cultural cooperation is worth over one billion FF and that Morocco will submit to France projects in the audio-visual and primary education sectors.

For the Moroccan premier, relations between the two countries are not limited to the sole issue of debt, although it is an important one. He explained that bilateral relations are much deeper and cover an impressive number of fields.

He added that the problem of Morocco's debt will certainly be one of the issues raised with French officials, because it is the major obstacle to the country's economic, social and human development.

He recalled that France had already contributed to swapping a part of Morocco's debt into investments, calling for a political handling of this issue to demonstrate French support to endeavors to consolidate democracy and economic and social reforms.

He further said France should help Morocco upgrade its competitive edge, improve Moroccan products access to European markets and promote social actions in Morocco's northern regions.

Previous Stories:
  Youssoufi to meet with Chirac in October   (9/28/1998)
  France will help Morocco with debt problem   (9/22/1998)
  Moroccan PM says debt is strangling government action   (9/21/1998)

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