U.S. Ambassador to Morocco Edward M. Gabriel on September 15 urged the United States, indeed all of Morocco's friends, to help Morocco's government as it implements "promising -- and badly needed" economic and political reforms.

Gabriel praised Morocco's King Mohammed VI for his determination to implement the wide-ranging reforms initiated by his late father King Hassan II, saying, "These reforms represent a cutting-edge experiment in the Arab world to consolidate democratic and market reform through consensual and progressive change."

"This critical period in Morocco is defined, above all, by a series of bold political reforms," the Ambassador said in remarks before the Council on Foreign Relations in Washington, D.C.

He noted in particular that the country has been governed by what the Moroccans call "an alternative government," under Prime Minister Abderrahmane el-Youssoufi, which has resulted in comprehensive reform of political institutions and the growth of a vibrant civil society in Morocco. The United States government "applaud(s) and encourage(s) this rapid growth of civil society and the strengthening of democratic institutions," he said.

Commenting on new economic reform policies under the Youssoufi government, Gabriel said the U.S. government has responded by offering incentives for additional reform, including a partnership offered jointly to Algeria, Morocco and Tunisia called "the Eizenstat Initiative." This program refers to Deputy Secretary of the Treasury Stuart Eizenstat, who put forward the idea in 1998 when he was Under Secretary of State.

The Eizenstat Initiative, he said, is a "dynamic, multi-lateral and integrated private-sector partnership, based on a foundation of strengthening economic ties between the United States and the Maghreb region."

Gabriel said that because of problems such as combating poverty, unemployment and poor access to education and health care, the road ahead for Morocco remains "challenging and steep." But he is optimistic that Morocco's future is very bright, based on three principles:

First, Morocco can count on the full support of its friends. The friendship between the U.S. and Morocco, he said, is based upon a new bilateral partnership, based on mutual respect and common interest. "America is by no means Morocco's only important friend," he added, noting the number of world leaders, including President Clinton, who paid their respects in Rabat at the funeral of the late King Hassan and Morocco's "open and warm reception" of Israeli Prime Minister Barak at the funeral.

Second, the deliberate choice Morocco has made for democratic reform and good governance is, in the final analysis, the very best tool available to correct social and economic imbalances.

Third, the will of the King, the government, the private sector, the NGO community and the people are all pointed in one and the same direction -- that is to build a modern democratic, prosperous and stable Morocco for the 21st Century.

Following is the transcript of Ambassador Gabriel's remarks, provided by USIS Rabat:

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Edward M. Gabriel
US Ambassador,
Kingdom of Morocco
Before the
Council on Foreign Relations
September 15, 1999
Washington, DC

"On the Road in Morocco"

Events unfolding now in Morocco inspire the excitement, optimism, and sense of urgency I feel daily as the U.S. Ambassador in Rabat. The newly enthroned King Mohammed VI is determined to implement the wide-ranging economic and political reforms initiated by his late father King Hassan II. These reforms represent a cutting-edge experiment in the Arab world to consolidate democratic and market reform through consensual and progressive change.

Morocco has made the right choices and has won the strong support of all its friends. It has a clear vision of its ultimate destination, yet the road ahead remains challenging and steep.

Morocco is in a politically and economically strategic location. Nearly touching Spain at its northwest border, it has throughout history maintained strong links with Europe. Morocco is also an integral part of the greater Arab -Islamic world to the east and draws from the south its deep African identity. Morocco also reaches out west across the Atlantic. It was among the first countries to recognize the United States of America despite the primitive communication and transportation technologies of the 18th century. In fact, our 1787 Treaty of Peace and Friendship with Morocco is the longest standing treaty still in force in the world today.

The United States of America has therefore forged a strong partnership with Morocco because we share the Moroccan government's determination that their new experiment succeed, because of our long-standing commitment to one another and because of Morocco's importance to us today. This new bilateral partnership is based upon mutual respect and advocates a democratic, prosperous and stable Morocco.

What are the challenges, then, that confront Morocco today? How are the options it faces now different from the varied influences that have already shaped its history? And what U.S. interests are at stake?

Where has Morocco Been?

King Hassan II created a political atmosphere and process that have the potential to plant democratic principle firmly in Morocco.

As its religious leader, he represented the tolerant and balanced view of Islam to the Moroccan people. They are not a people at war with their religion. In a recent meeting with the King, he expressed how important it was that Moroccan people be guided by religious values, but he said, "young boys should of course go to the Mosque at noon on Friday, but they should also be encouraged to play soccer in the afternoon."

He adopted IMF and World Bank reforms that, if a member of the EU, Morocco would qualify for the Monetary Union. And, he placed Morocco solidly in the camp of the Western Allies, which defined his country's long years of stability and desire for democracy, freedom and free markets.

This critical period in Morocco is defined, above all, by a series of bold political reforms. Most recently, the country has been governed by what Moroccans call "an alternative government," an elegant phrase to describe the astonishing fact that Abderrahmane el-Youssoufi -- who once lived in exile outside of Morocco -- was appointed Prime Minister by the late King Hassan II.

The Youssoufi government represents much more than a change in political personalities, however. "Alternative government" is rather the result of several years of comprehensive reform of political institutions and the growth of a vibrant civil society in Morocco. The parameters of permissible debate in the press have notably expanded over the years. Readers enjoy a selection of newspapers representing the views of more than a dozen political parties, as well as thoughtful publications that are totally independent.

Greater freedom of the press gives voice to the growing number of non -governmental organizations -- NGOs -- that advocate policy reform. Human rights organizations and NGOs representing women have had a particularly high profile. The strength of this new NGO policy advocacy can be measured in part by the opposition it generates from those representing the status quo and by the seriousness with which the government listens to this public debate.

The United States Government takes no sides on specific social and political issues that only the Moroccan people can decide for themselves. We do, however, applaud and encourage this rapid growth of civil society and the strengthening of democratic institutions.

We do so for two basic reasons: As a matter of principle, we support worldwide democratic development and respect for human rights as an affirmation of our core national values. And, for practical reasons, we view good governance as an essential element in a broader package of economic and social reforms that ensure stability in the world.

Morocco is implementing promising -- and badly needed -- reforms. King Mohamed VI inherits an economy with strong macroeconomic numbers but troubling structural problems -- problems the present Youssoufi Government is tackling. Morocco's inflation levels are at industrialized country levels and economic growth has averaged about 3% throughout the 1990's. The budget deficit is running about 3% or less, and the debt to GDP ratio is under 60%.

These strong macro-economic numbers, however, mask a number of difficult structural and social problems: a bloated government payroll, excessive red tape, high tariffs, and lack of consistency in transparent business practices. 50 percent of the budget is earmarked for public wages. 33 percent goes to service the debt, leaving little for social and economic development. Poverty, unemployment, and illiteracy rates remain high, especially among women. In order to combat these problems, the Youssoufi Government needs to double growth rates to 6 percent per year to overcome these challenges.

Where is Morocco headed?

Our reading is that the Moroccan Government has what it takes -- the vision, the will, the popular support, and the backing of the King -- to narrow the gap between rich and poor and to create the conditions for Morocco's economic take off. Over the past year, we have witnessed a deepening in the reform process, acceleration in the pace of privatization, and a much-needed focus on transparency, judicial reform, and social development.

The reform process got a big boost this summer with the sale of a license to provide cellular phone service in competition with the State Telecom Company. Three years ago, the Government considered selling the license, without an open tender, for $40 million. A consortium led by the Spanish Firm Telefonica just paid $ 1.1 billion in a completely open, transparent tender process.

What did this do for the reform process? It confirmed that transparency pays big; it created confidence that other government assets can be sold; and it made Moroccans proud to see large international firms trying to outbid each other to do business in Morocco.

The United States Government has responded to these new Moroccan economic policies by offering incentives for additional reform. This includes a new partnership offered jointly to Algeria, Morocco, and Tunisia. This partnership is commonly called "the Eizenstat Initiative," referring to Deputy Secretary of the Treasury Stuart Eizenstat, who was Under Secretary of State when he put forward these new ideas.

The Eizenstat Initiative has four essential elements: enhanced high-level dialogue, accelerated structural reforms, a greater role for the private sector through increased investment and promotion, and the removal of intra-regional barriers to trade and investment. It is a dynamic, multi-lateral and integrated private-sector partnership, based on a foundation of strengthening economic ties between the United States and the Maghreb region.

As mentioned earlier, one important factor still impedes the reform process: despite the economic progress, a bleak budgetary outlook makes it difficult for the government to engage in productive public investment to boost the economic growth rate. Morocco will be unable to escape its budgetary woes until its debt service requirements, which eat up one third of the national budget, are lessened.

France, Spain and Italy are currently using a creative mechanism called debt -equity swaps to help Morocco manage its debt and to encourage there own firms to invest in Morocco. By this method, France and Spain have so far converted some 20 percent of their outstanding official bilateral debt into private investment in Morocco. This has created "cheap money" for foreign firms competing against American companies in order to win bids for contracts.

As Ambassador, I would like to have this kind of tool to help U.S. firms compete on a more level playing field in Morocco against their European rivals. For the United States to engage in the same kinds of transactions as the Europeans would require authorizing legislation in the United States. Alternatively, we could look for a budget-neutral way to encourage debt buy-backs by Morocco. This latter option would not be a giveaway: it would not cost the American taxpayer. However, either method would provide another way to help encourage U.S. foreign trade and investment in Morocco while simultaneously helping Morocco to reduce its burdensome debt levels.

The structural reforms I have outlined are having a positive impact in Morocco. USAID programs and new USG economic policies are also making a difference. But, as I mentioned before, much remains to be done to combat poverty, unemployment and poor access to education and health care.

Why should America be supportive of Morocco?

Such problems underscore my belief that Moroccans have a challenging and steep road ahead. As King Mohamed said recently, "I have no magic wand." I do believe, however, they have selected an excellent map for their journey into the next century and remain confident that Morocco's future is very bright.

My optimism is based on three fundamental realities.

First, Morocco can count on the full support of its friends. As the late King Hassan told me just days before his death, "(U.S.-Moroccan) relations are the best they've been since the days of Kennedy." The truth of these remarks came to full light by the end of that same week when President Clinton headed a large delegation of present and former American officials who came to Rabat on a moment's notice to pay their last respects to the Monarch. When the President then took the extraordinary decision to march miles in an open funeral procession in front of more than a million bystanders, the response of the Moroccan public was great indeed.

Such public displays of friendship are dramatic, but U.S.-Moroccan ties are in fact based on much more than pageantry. This friendship is based upon a new bilateral partnership, based on mutual respect and common interests.

We share a vision of a democratic, prosperous, and stable Morocco. We both want to strengthen our participation in world markets through open trade and investment flows. We both seek to improve social equity and equal opportunity as a necessary condition for the development and stability of the region. We are both concerned about terrorism and other global issues facing our two countries.

America is by no means Morocco's only important friend. Many other world leaders paid their respects in Rabat to the late King who bravely opened early and sustained dialogue with Israel, as he did when helped arrange President Sadat's historic trip to Jerusalem. In President Clinton's words, King Hassan was "a path finder ... a leader who survived to expand the possibilities of the Moroccan people and all the people of this region."

King Mohammed VI has followed his father's policies. Morocco's open and warm reception of Israeli Prime Minister Barak at King Hassan's funeral and the third -country talks the new King arranged for the Israeli delegation, show already that Morocco will continue to play an active and positive role in the Middle East Peace Process.

Morocco enjoys the support of its friends but other factors will also guide its destiny.

My optimism for Morocco's future stems from a second strong conviction. The deliberate choice Morocco has made for democratic reform and good governance is, in the final analysis, the very best tool available to correct social and economic imbalances.

A society that enjoys freedom of individual expression and nurtures the growth of voluntary civil associations will not fail to find the best solutions to its problems. Through the years, Morocco has shown its determination to put in place a strong democratic system together with solid economic thinking.

No one seems more qualified to carry on his father's vision than King Mohamed VI does. I know King Mohamed VI to be a man of tremendous intellect and seriousness. He possesses a great understanding of the needs of his people.

The peaceful and orderly transition of power from father to son underscored both the stability of the Moroccan political system and the depth of popular support for King Mohamed VI and for the monarchy. The new king is ideally placed to forge a strong partnership with the Prime Minister to speed up implementation of his father's legacy: democratic and social reform, the rule of law, transparency, human rights and open markets. I quote from his most recent speech:

-- "How is it possible to talk about scientific development when our competent youth are unemployed and deprived? They do not benefit from the adequate training that enables them to show their potential..."

-- "How can we talk about the progress and development of society when women who constitute half of this society are being denied their rights? Our true religion, Islam, has granted them rights that are not respected. They are equal to men"...

-- How is it possible to talk about equal opportunities when the disabled are marginalized and kept away from the sectors of activities?...

This brings me to the third and most important reality: The will of the King, the government, the private sector, the NGO community and the people are all pointed in one and the same direction -- that is to build a modern democratic, prosperous and stable Morocco for the 21st Century. All they need now is help - - a small push -- from their friends.

It would be a tragic chapter in American history indeed if we missed this opportunity to be helpful to our oldest friend. George Washington promised such friendship more than two hundred years ago on December 1, 1789, when he asked then-King Mohamed III for help to protect American ships against the Barbary pirates. Washington wrote:

"Within our territories there are no mines of either gold or silver, and this young Nation, just recovering from the waste and desolation of a long war, has not, as yet, had time to acquire riches by agriculture and commerce...But we have reason to flatter ourselves that we shall gradually become useful to our friends..."

Now making a liar out of George Washington would indeed be tragic!

Thank you. I would be happy to take your questions.

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