Announcement of Consultative Group for Morocco Meets in Paris on March 12, 1987

FOR IMMEOIA TE RELEASE World Bank 1818 H Street, N.W ., Washington , D.C. 20433 , U.S.A. BANK NEWS RELEASE Contact: Fawzi H. Rihane (202) 477-5325 CONSULTATIVE GROUP FOR MOROCCO MEETS IN PARIS WASHINGTON, March 12 -- A Consultative Group for Morocco comprising 11 countries and 15 bilateral and multilateral donors met in Paris on March 10-12, 1987, to consider Morocco's economic situation, medium-term economic strategy and needs for external assistance. The group met under the Chairmanship of Mr. Willi A. Wapenhans, Vice-President, Europe, Middle East and North Africa Region, World Bank. The Moroccan delegation was led by His Excellency Mr. Mohamed Berrada, Minister of Finance, and included the Minister of Planning, Mr. El Ghazouani Rachidi, and the Governor of the Central Bank, Mr. Ahmed Bennani, as well as other senior officials in the government. The Consulative Group focussed on Morocco's adjustment policies and the medium-term prospects for the economy on the basis of reports prepared by the government, the World Bank and the IMF. The Moroccan delegation reported on the progress since the previous CG meeting in January 1985 and outlined the policies the government intends to pursue over the next few years to complete the stabilization and restructuring of the economy. Morocco has continued to implement a wide range of stabilization and structural adjustment measures, including liberalization of the external trade regime, of domestic prices, and initial deregulation of the financial sector. This has contributed to significant reductions in the deficits in the current account of the balance of payments, and the government budget. It has also begun a program of rationalization and partial divestiture of state enterprises and begun a fiscal reform. The Minister of Finance, Mr. Berrada, reiterated the government's determination to pursue its present adjustment policies so as to restore Morocco's creditworthiness on the international financial markets and to lay the basis for sustained economic growth. The Minister of Planning, Mr. El Ghazouani Rachidi, informed the meeting of the sectoral strategies that would be the framework for the next economic plan, for 1988-92, and the measures being taken to improve planning and budgeting processes.  - 2 - The Group noted with satisfaction that Morocco had indeed implemented a significant program of structural measures and that there has been a marked improvement in the economy's performance. The Group encouraged Morocco to continue the adjustment efforts, which it strongly supported, while noting with concern that, because of severe resource shortages, investment had fallen, especially in the public sector. The government presented a core program of investments and requested at least an additional SDR 100 million on concessional terms to secure its financing. The Group, therefore, agreed to consider favorably the Moroccan request for additional financing of the investment budget for 1987, which it recognized to be a minimum program. The Consultative Group also agreed that its medium-term objective of restoring creditworthiness is realistic. Before adjourning, the Consultative Group stressed that it would be appropriate to hold another meeting in about a year concerning the government of Morocco's next 5 year economic and social development plan. Representatives of the Governments of Belgium, Canada, France, the Federal Republic of Germany, Italy, Japan, Kuwait, Spain, and the United States, and of the Abu Dhabi Fund for Arab Economic Development, the African Development Bank, the Arab Fund for Economic and Social Development, the Arab Monetary Fund, the Commission of European Communities, the European Investment Bank, the International Finance Corporation, the International Fund for Agricultural Development, the International Monetary Fund, the I slamic Developmen~ Bank, the Kuwait Fund for Arab Economic Development, the Saudi Fund for Development, the United Nations Development Programme, the World Bank and the World Food Programme attended the meeting. The Government of Switzerland, the United Kingdom and the Development Assistance Committee of the Organization for Economic Co-operation and Development were represented as observers. During the closing session the Consultative Group reiterated its encouragement for Morocco to continue i ts adjustment policies in a framework of sustained growth. The Group expressed satisfaction with the results achieved and its support for the success of these policies. - 0 -