MOROCCAN BRIEFING NOTES FOR THE DDCI

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000801130001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: August 9, 2010
• Sequence Number: 1
• Publication Date: October 21, 1983
• Content Type: REPORT

Domestic Politics
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The moderate pro-Western regime of King Hassan--who is 53
years old--appears secure for the near term but will face growing
domestic challenges. Deteriorating economic conditions coupled
with rising expectations among the burgeoning and youthful
population are sources of popular discontent.
-- There is restiveness among key groups, particularly
students, the labor movement and some religious
fundamentalists, who are searching for issues on which to
challenge the King.
-- There is a potential for renewed civil disorder like the
food-price riots in Casablanca in June 1981, in which some
100 persons died, as the impact of recent austerity measures
are realized.
-- Organized opposition to the regime remains basically in
disarray and demoralized, however, since the King's
crackdown on leaders and rank-and-file following the
King Hassan has fairly effective security and military
establishments to face these difficulties. The death of General
Ahmed Dlimi, the King's intelligence and security adviser,
earlier this year does not appear to have had a major affect on
these forces. The King also is adept at playing off opponents
against each other.
Moroccan-Spanish Relations
Rabat's delicate relationship with Madrid appears to be on
an even keel for the moment, but Spain recognizes that it is only
a matter of time before Morocco focuses on the Spanish enclaves
of Ceuta, Melilla, and several islands along-Morocco's northern
coast that Rabat claims as its territory.
-- Hassan has suggested that Rabat might link disposition of
the enclaves question to that of Gibraltar. Madrid,
however, views Ceuta and Melilla as integral parts of Spain
to be defended vigorously.
-- Rabat and Madrid recently concluded a new fishing
agreement that could yield $550 million in medium-term aid
to Morocco.
NESA M#83-10272
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-- Morocco, however, stands to suffer economically when
Spain is admitted to the European Community, and transit of
Moroccan goods across Spain may be restricted.
Moroccan-Algerian Relations
King Hassan and Algerian President Bendjedid met last
February to discuss normalization of bilateral relations that
were cut in 1976 over the Western Sahara dispute. Both leaders
recognize that regional stability serves their long term economic
and political interests and that those interests are threatened
by the Sahara dispute and the machinations of Libya.
-- The deeply held, incompatable views on the Western Sahara
issue, however, are not likely to change easily or quickly
and until solved, will continue to be a major constraint on
improvement in bilateral relations.
Western Sahara
Despite a more regular dialogue between Morocco and Algeria
over the eight-year-old Saharan dispute, a settlement in the near
term seems unlikely. Although acquisition of the Sahara remains
a popular cause among Moroccans, the seemingly "unwinnable" war
could eventually cause domestic trouble for the King.
-- There is growing uneasiness in Morocco regarding the
impact of the war on the economy. Rabat's serious financial
difficulties, caused in part by the war, may increase
discontent with the regime.
-- While Algeria, the Polisario Front's chief supporter, is
more amenable to a political settlement, it still insists on
direct Moroccan-Polisario negotiations. King Hassan refuses
to give the guerrillas this kind of recognition and has
generally been unwilling to take any substantial risks in
the OAU-sponsored negotiations. Informal talks between
Algiers and Rabat seem to be temporarily stalemated.
-- Renewed Polisario military activity in recent months is
likely to continue as the Front attempts to force Morocco
into direct negotations.
Economic Situation
Morocco's economy has suffered from slow growth in recent
years and a rapid rate of population increase. Double digit
inflation has eroded the standard of living since 1977. Rabat's
financial position has been severely weakened by its heavy
dependence on foreign petroleum, several poor grain harvests, a
depressed world market for phosphates--the nation's primary
export--and the continuing conflict in Western Sahara.
-- Erratic rains last spring reduced the 1983 cereal harvest
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by 25 percent, prolonging the need for heavy grain
imports. Drought has affected three of the past four
harvests.
-- Morocco may not be able to secure all of the required
financing needed to cover its large current account deficit
and debt service obligations this year or in 1984.
Agreement on a new $315 million IMF Standby loan for 1983-84
has been reached but it requires stiff belt tightening
measures including reductions in food subsidies--a
politically sensitive issue.
-- Outstanding foreign debt has reached $11 billion,
equivalent to two-thirds of GDP and double the 1978 level.
Debt service costs reached 39 percent of receipts from
exports of goods and services last year and are expected to
reach 46 percent this year. Rescheduling of part of
Morocco's foreign debt is currently underway. Reduced
access to financial markets will continue to curtail the
Five-Year Plan (1981-1985).
-- Disbursements of Saudi aid--$495 million in 1982--fell
below the levels of the prior two years. Saudi assistance
will probably continue at reduced levels, as Riyadh must
come to terms with reduced oil revenues.
-- Morocco is in arrears to the United States for FMS
payments and faces suspension of its FMS allocations under
the Brooke Amendment if upcoming obligations are not met.
-- The Moroccan dirham has depreciated by 21 percent since 1
January 1983, aggravating the nation's balance-of-payments
problems. Foreign exchange reserves now cover less than one
week of merchandise imports.
-- Export prices and volumes for phosphates are down again
this year; phosphate export earnings will be off by as much
as $100 million offsetting savings from the $5 per barrel
drop in oil prices.
The economic malaise probably will continue through 1986 as
financial constraints will remain acute limiting investment and
development.
-- The phosphate market is likely to strengthen as the world
economy rebounds, but it will be several years before
Morocco reaps the benefits from its heavy investment in the
domestic phosphate industry. Morocco controls about three-
quarters of proved world phosphate reserves.
-- Morocco's oil shale and fisheries resources--among the
world's richest--provide potential for economic recovery in
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Relations with the US
Moroccan-US relations are good, but expanding bilateral
ties, initially well received in Morocco, are beginning to be
questioned by some Moroccans who believe that the country's
material expectations are not being met.
-- In pursuit of Moroccan interests, King Hassan often
adopts foreign policies that parallel or coincide with US
interests.
-- The King, during his visit to Washington in May 1982,
approved a Morroccan-US access and transit agreement for US
Rapid Deployment Forces.
-- The US is a major source of military equipment for the
Moroccan armed forces, but Morocco's inability to meet FMS
repayment obligations may disrupt further assistance.
-- King Hassan, Chairman of the Arab League and its Fez
peace committee, welcomed President Reagan's Middle East
initiative and has urged other Arabs to accept it as a
starting point for negotiations.
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SUBJECT: Moroccan Briefing Notes for the DDCI
NESA M#83-10272
DISTRIBUTION:
DDI/NESA/AI/M/
DDCI
DCI/SA/IA
Exec Registry
DDI
C/PES
CPAS/IMD/CB
NIO/NESA
D/NESA
NESA/PPS
NESA/AI
NESA/AI/M
19 Oct 83)
SECET
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