MOROCCO

	FY 1998 Actual	FY 1999 Estimate	FY 2000 Request
Development Assistance	$6,200,000	$5,000,000	$6,500,000
Child Survival and Disease	$4,700,000	$2,826,000	$1,500,000

Introduction

Moroccan voters recently elected their first opposition government, an event that could have a profound impact on U.S. national security interests. Prime Minister Youssoufi’s ministers have committed themselves to transparency, democracy, economic development, and rule of law. The new government is redefining policies on human rights, health care, education and social development. A new partnership is being forged with the United States, which, if successful, could establish Morocco as a more stable, democratic and prosperous partner in an important yet troubled region. USAID’s resources support U.S. national security interests and this new partnership, through development programs that emphasize economic prosperity, democracy, and human rights. The fragile nature of the democracy experiment in Morocco cannot be over emphasized. The need for strong and continued U.S. support for the new government’s efforts has never been greater.

Development Challenge

Morocco is a country of contrasts and dualistic development. Debilitating urban and rural poverty coexist alongside modern urban centers. While the nation's estimated per capita gross domestic product (GDP) of $1,280 indicates that Morocco is a lower-middle-income country, its social statistics are those of a much poorer country.

• Almost 50% of the population lives at or below the poverty line. During the past decade, economic growth has averaged only 2.5% while the urban labor force is growing at over 5% annually.
• The current unemployment rate is nearing 20%—and is 30% among new university graduates.
• More than half the adult population is illiterate. In rural areas, the rate of female illiteracy is 90%.
• Infant mortality has dropped from 82.4 per thousand, but it remains at 36 per thousand.
• Morocco has some large sophisticated agribusiness and phosphate production enterprises that earn substantial foreign exchange for the country; but a third of these export earnings are devoted to servicing internal and external debts, heavily constraining its capacity to manage the fiscal deficit.
• The population is still growing at 2.1%, putting ever increasing pressure on the over burdened social and economic systems.

Morocco faces four key challenges in the coming decade: 1) a growing population; 2) increasing water scarcity; 3) high unemployment; and 4) unacceptably low access to basic education. Further, an overarching development challenge is assuring equitable distribution of economic opportunities and access to basic social services within the country. Rural areas lag far behind urban centers in providing adequate water, sanitation, housing, education, economic growth opportunities, and social services.

USAID’s economic growth strategy will focus on improving the environment for local and foreign trade and investment; providing training, technical assistance, and increased credit resources for small and micro-entrepreneurs; supporting the highly successful microfinance organization USAID established in 1997; and supporting the Government of Morocco's (GOM) policy reform agenda.

Water scarcity is a well-known, critical constraint affecting Morocco's long-term development. Therefore, USAID is continuing its focus on improving the quality and efficient use of this scarce resource. Activities will cover all aspects of water management in the agricultural, urban, and industrial sectors. To date, USAID’s program is demonstrating impressive results. For example, the annual water usage in the laser-leveling irrigation scheme has been reduced by 13 million cubic meters. This success is serving as a model for GOM and donor replication in other areas of Morocco. Other new and continuing activities will focus on improving water quality for household use and treating and reusing previously unused water discharges for agricultural purposes.

Morocco now has 27 million people, of whom 35% are under 15 years of age. The coming of age of this population will not only lead to increased population pressures within the next 10 years, but also create tremendous demands for employment and services. USAID and the Moroccan Ministry of Health will continue their cooperative and successful program to improve the health and lives of Morocco’s children and their mothers. In spite of steadily reducing infant and maternal mortality rates and improvements in child spacing, much remains to be done if the country is to successfully address population pressures and the demand for services and employment.

Recent USAID initiatives in basic education, particularly for rural girls will continue. The USAID program is providing a model which is expected to be adopted by the Ministry of Education and the World Bank for replication in several locations.

Other Donors

Donor assistance to Morocco totals about $1 billion per year. An estimated 80% of donor assistance--in the form of loans, loan guarantees, and commercial credit--finances infrastructure development. The largest donor programs in Morocco are those of the World Bank, the European Union, France, the African Development Bank, and Spain. In 1996, U.S. grant assistance ranked third (9%), behind France (66%) and Germany (11%). However, with declining USAID assistance levels, this ranking has likely slipped. Nevertheless, USAID continues to play a far more significant role than its program size would indicate. For example, USAID is perceived as the leading donor in microenterprise development and finance, water resource management, and family planning.

FY 2000 Program

USAID programming will continue to pursue both Mission Performance Plan and USAID-specific goals. Activities in small and microenterprises and policy reform implementation will improve access to credit and markets for the poor, and will contribute to poverty alleviation through increased opportunities for private sector development. Support for improved water resources management in the agricultural, urban, and industrial sectors will reduce toxic emissions, reduce water usage, reduce surface water pollution, and provide modern sewerage and potable water systems to many more of Morocco's citizens. The population and health program will consolidate important gains in reproductive and child health while insuring their sustainability. The basic education activity will increase the participation of rural girls in primary schooling, preparing them to participate in Morocco’s democratic and economic development.

MOROCCO

FY 2000 PROGRAM SUMMARY
(in thousands of dollars)

USAID Mission Director: James Bednar

USAID Strategic & Special Objectives	Economic Growth & Agriculture	Population & Health	Environment	Democracy	Human Capacity Developmnt	Humanitarian Assistance	TOTALS
1. Increased opportunities for private sector - DA	1,000	---	---	---	---	---	1,000
2. Improved Water Resources Management in the Souss-Massa River Basin - DA	---	---	3,000	---	---	---	3,000
3. Key Interventions Established to Promote Sustainability of Population, Health and Nutrition Programs in Morocco - DA - CSD	--- ---	2,000 500	--- ---	--- ---	--- ---	--- ---	2,000 500
4. Increased Basic Educational Attainment for Rural Girls in Selected Rural Areas - DA - CSD	--- ---	--- ---	--- ---	--- ---	500 1,000	--- ---	500 1,000
Total: - DA - CSD	1,000 ---	2,000 500	3,000 ---	--- ---	500 1,000	--- ---	6,500 1,500

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ACTIVITY DATA SHEET

PROGRAM: MOROCCO
TITLE AND NUMBER:Increased Opportunities for Trade, Investment and Business, 608-SO01
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $1,000,000 DA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2005

Summary: The two main development priorities of the Moroccan government are accelerated economic growth and an improved quality of life for disadvantaged Moroccans. Economic growth is acknowledged as the best means of alleviating poverty and generating revenues needed to finance social sector activities. A favorable policy and regulatory environment and an institutional capacity to support private enterprise are the most effective means for promoting equitable growth.

USAID provides assistance for policy and administrative reform and institutional capacity development. An enabling environment will expand economic opportunities for small and microentrepreneurs and support the Middle East and North Africa Regional Trade and Investment Initiative. Specific activities target investment promotion, corruption and transparency, judicial reform, and access to housing and working capital loans. Primary beneficiaries are disadvantaged Moroccans, entrepreneurs (particularly micro, small, and female), and jobless people, both rural and urban, who gain business and employment opportunities, low-cost housing, training, and access to financial resources otherwise unavailable.

Key Results: Major anticipated results include: approved legislation or executive decrees for investment promotion, competition and consumer protection, economic associations, microfinance institutions, and significantly reduced bureaucratic obstacles to trade and enterprise development. Other results will be: pay-for-support-services for small enterprise through a national, private sector federation of consulting firms serving small businesses; a nationwide microfinance organization that will offer loans to 25,000 clients in 2000, mostly female; and reduced transaction costs for entrepreneurs because of diminished administrative corruption.

Cumulative multi-year results include 52 firms privatized; 35 microfinance offices in 22 cities nationwide; a 20% reduction in the cost of road transport of agricultural exports; annual exports of diversified horticultural exceeding $25 million, providing jobs for low income people, mainly women; and 125,000 new below-median-income homeowners.

Performance and Prospects: The new Moroccan government is devoted to speeding and expanding the process of reform, which has thus far proceeded slowly. USAID is optimistic that its 20 item reform agenda supporting the government efforts will be 80% achieved, serving as a catalyst to promote an enabling market economy, business environment, transparency and competition, and access to financial resources for low-income homeowners and for micro- and small-scale entrepreneurs. Four activities, New Enterprise Development (NED: through 2000), Microenterprise Finance (MFA: through 2003), Accelerated Reform for Enterprise Promotion (AREP: 2000-2005); and Institutional Strengthening for Business Opportunities (ISBO: 2000-2005) will furnish implementation assistance.

Possible Adjustment to Plans: Two key unknowns which could affect the progress of our plan are the level of funding available in future years and the pace of reform implementation by the Government of Morocco. Continued progress on administrative reform is a requisite for expanded economic opportunity and growth. Funding constraints may dictate combining the policy reform and institution capacity development.

Other Donor Programs: Donor activity is significant and supports structural adjustment and macro-economic policy reform, infrastructure development, financial sector reform, related institutional policy reform, and assistance to specific sectors such as agriculture, fisheries, and education. The World Bank is the predominant donor in structural adjustment and financial market development. The European Union, European Investment Bank, France, Japan, and Germany are other major donors in the private sector.

Principal Contractors, Grantees, or Agencies: Primary contractors and grantees include: Chemonics International, Development Alternatives, Inc., and Volunteers in Technical Assistance.

Selected Performance Measures:

	Baseline (1993)	Target (2000)	Target (2005)
Reduced barriers to direct investment in the Moroccan private sector*	0%	10%	100%
Increased numbers of micro/small/medium enterprises (cum.)	0	6,000	20,000
Increased number of enterprises receiving loans (cum.)	0	24,000	100,000
Increased number of low-income homeowners (cum.)	16,000	200,000	300,000
* Measured as percentage completion of a series of USAID-promoted policy reforms

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ACTIVITY DATA SHEET

PROGRAM: MOROCCO
TITLE AND NUMBER:Improved Water Resources Management in the Souss-Massa River Basin, 608-SO02
STATUS: Continuing
PROPOSED OBLIGATION & FUNDING SOURCE: FY 2000: $3,000,000 DA;
INITIAL OBLIGATION:FY 1995 ESTIMATED COMPLETION DATE: FY 2006

Summary: The economy of Morocco depends primarily upon agriculture, so plans for economic growth and modernization are hostage to rainfall patterns and the way water is managed in aggregate. On the human level, inadequate supplies of potable water and sanitation are major household burdens and cause of disease. To alleviate this constraint to prosperity and social development, USAID/Morocco has worked since 1995 to improve water resources management in the agricultural, urban and industrial sectors. Current activities include: (1) improving irrigation efficiency through new technologies and stronger management systems, benefiting farmers and the entire water sector; (2) improving watershed management through community-based erosion-control programs, benefiting farmers and urban water users down-stream; (3) improving water quality by treating urban and industrial pollutants, benefiting all down-stream water users; (4) providing water, sanitation, and municipal services in fast-growing towns and cities, benefiting the urban poor; and (5) training municipal officials in financial management and environmental planning, benefiting urban residents through better governance and service delivery.

USAID/Morocco’s assistance in water resources management is in a transition phase, continuing or completing current activities and consolidating their successes, while developing a new activity to support the new strategic objective. The new activity, starting in June 1999, will assist the government to implement recent legislation to integrate water resources management in the nation’s principal river basins. The Souss-Massa region, east of Agadir, was selected as the most promising site for the new work because of its economic importance to the country, because its main industries -- agricultural exports and tourism -- depend upon water, because it offers strong development partners, and because it faces severe problems of water scarcity, water quality, and water availability that can be improved through integrated application of practices developed in the past four years.

This strategic objective addresses four of USAID’s seven goals: environmental sustainability, by establishing a system to conserve and clean water, and enabling sustainable urbanization; economic growth and agricultural development, by improving sustainability of natural resource use; democratization, by promoting transparent, responsive government and an active civil society; and human health, by improving access to water and sanitation.

Key Results: (1) Irrigation technologies introduced by Tadla Resources Management (TRM) saved farmers $1,300,000 in reduced water use last year, while simultaneously improving crop yields. Water User's Associations now include 6,000 farmers, and are represented on the irrigation authority's management council. (2) The watershed management activity (part of Water Resources Sustainability, WRS) worked with new farmers' associations to plant olive trees on more than 400 hectares of lands that are easily eroded. (3) A pilot wastewater treatment plant began operation (through Urban Environmental Services, UES), and construction began on a full plant for wastewater treatment, wastewater reuse, and production of methane (through WRS). Monitoring and construction is continuing at these sites and at an additional pilot plant. (4) Municipal services were provided to 2,530,000 poor urban residents in 22 communities (through UES and the Urban Environmental Credit Program, UECP). This work is continuing, although current mechanisms, technical support and infrastructure financing may be modified.

Performance and Prospects: The decision to extend and intensify work in the water sector was based upon the strong performance and energetic Moroccan interest in the current activities. These results were achieved through community-based, technically sound approaches, and with the full faith of local and national officials. These approaches and programs will continue by UES, WRS, and UECP, concentrating on the new Souss-Massa river basin activity.

Possible Adjustments to Plans: The Urban Environmental Services activity is expected to be extended, at no cost, to December 2000, to support guaranteed loans. The Tadla Resources Management project may be extended, at no cost, to December 1999 to allow for more extensive dissemination of irrigation technologies.

Other Donor Programs: The Government of Morocco provides at least 25% of the total cost of USAID interventions, as provided in assistance agreements. Local governments and NGO partners participate financially and provide in-kind support to various interventions. The World Bank is about to initiate a watershed management program that mirrors USAID’s, and is assisting Morocco’s first river basin agency. European nations, especially France and Germany, continue to invest significant grant and loan funds in Morocco.

Principal Contractors, Grantees, or Agencies: The primary U.S. firms involved in these activities are Chemonics and Environmental Alternatives Unlimited. One or more contractor(s) will be secured for the new results package and strategic objective during the year. Numerous U.S. and Moroccan companies, universities, and NGOs provide short-term assistance or work as subcontractors. The USAID technical staff includes a technical advisor from USDA.

Selected Performance Measures:

	Baseline	Target (2000)	Target (2005)
Mass of soil erosion in target areas	'97: 64 tons/ha./yr.	55	'02: 48
Progress toward adoption of 11 key reforms	'95: 12% complete	75%	'02: 96%
Number of poor urban households connected to sewerage and water services	'94: 10,300	48,650	'05: 50,000
Progress toward effective water resources management in the Souss-Massa measured by adoption and implementation of participatory policies and programs	'99: 0% complete	10%	'05: 95%

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ACTIVITY DATA SHEET

PROGRAM: MOROCCO
TITLE AND NUMBER:Key Interventions Established To Promote Sustainability of Population, Health and Nutrition Programs in Morocco, 608-SpO03
STATUS: New
PROPOSED OBLIGATION AND FUNDING SOURCES: FY2000: $2,000,000 DA; $500,000 CSD
INITIAL OBLIGATION: FY1999 ESTIMATED COMPLETION DATE: FY2004

Summary: USAID has provided extensive assistance to the Ministry of Health (MOH) of the Government of Morocco for the past 30 years to expand family planning services, increase contraceptive prevalence, improve child health, and, more recently, to assist in other aspects of reproductive health. As a result of this assistance, Morocco has achieved outstanding results in reducing fertility and mortality of children under five. Given this success, USAID is progressively reducing its financial support to the sector, while helping the MOH to consolidate the gains achieved and to assure sustainability of the program. This Special Objective, due to start near the end of FY 1999, includes two key intermediate results: establishing effective decentralized management of primary health care services in the public sector, specifically in one or more pilot regions; and increasing access to private sector reproductive and child health services nationwide. The Special Objective also allows USAID to provide periodic technical assistance to the MOH to respond to problems in the national reproductive and child health systems previously developed in collaboration with USAID.

Key Results: The following indicators for the Special Objective Intermediate Result "Effective decentralized management of primary health care services in one or more pilot regions" are proposed: a) accurate health and demographic data available and used for decision-making at the regional level; b) contraceptive use increased in target communities; and c) an increased number of community health projects implemented with active participation of nongovernmental civic groups.

Indicators for achievement of the Intermediate Result "Increased access to private sector reproductive and child health services nationwide" include: a) sales of long-term contraceptives under the social marketing program increased; b) policy barriers to private sector service delivery reduced; and c) the proportion of family planning/maternal & child health clients served by the private sector is increased.

Performance and Prospects: This new Special Objective will start late in FY 1999. The current USAID/Morocco bilateral program for health and population, "Reduced Fertility and Improved Health of Children under Five" (SO-01) will be extended by one year, through 2000, to allow for completion of critical actions essential to achievement of the Special Objective.

SO-01 has demonstrated impressive results to date. National level results have greatly exceeded targets for Total Fertility Rate, Infant Mortality Rate, and the Contraceptive Prevalence Rate. An AID/Washington Global Bureau Senior Review cited the progress of the Morocco program as an Agency "success story".

With USAID's support, by the end of 608-SO01 the MOH will have in place most of the necessary elements of a fully functioning national Family Planning/Maternal Child Health (FP/MCH) program, including: 1) a nationwide network of service providers and facilities; 2) an adequate contraceptive logistics system and the ability to project needs and procure commodities; 3) appropriate pre-service and in-service training programs; 4) a strong national IEC (Information, Education, Communication) program; 5) the basic tools for a modern nationwide data management and health surveillance system; 6) an active private sector with two fully self-financing social marketed contraceptives (orals and condoms); 7) model service delivery pilots ready for replication in both Emergency Obstetric Care and Integrated Management of Childhood Illnesses; and 8) a burgeoning nongovernmental civic sector including active professional associations for physicians, nurses, and midwives.

USAID assistance in the new Special Objective will focus on priority interventions essential to achieve sustainability of these and other critical activities of the FP/MCH program.

Possible adjustment to plans: While this Special Objective is designed to be implemented solely through USAID central program support (Mission funds provided to grants and contracts administered by the Global Bureau) the involvement and ownership of all activities by the Government of Morocco, and more specifically the Ministry of Health, must be assured. It may be opportune to develop an umbrella agreement with the Ministry of Health (MOH) which covers the range of activities to be implemented in the Special Objective, even if no bilateral funds are obligated through this agreement.

Other donor programs: USAID has substantial experience working with the MOH to facilitate funding by other donors for key activities. This trend will continue into the post-bilateral period as USAID will pass the baton for expansion of successful pilot activities to donors such as the European Union (EU), the United Nations Population Fund (UNFPA), the World Health Organization (WHO), the United Nations Children's Fund (UNICEF) and the World Bank. Other bilateral assistance to the sector comes from Germany, Japan and France. UNFPA advocates strongly for reproductive health and gender awareness, and provides reserve support to the MOH in maintaining availability of contraceptives. The EU currently funds activities related to improved maternal and child health in 20 provinces and is likely to be the largest donor in the health sector, including reproductive and child health in the future. The EU collaborates with the World Bank on health care financing reform especially in certain large hospitals. Support from the World Bank is critical to GOM health financing efforts.

Principal Contractors, Grantees and Agencies: Under the Special Objective all Cooperating Agencies will be funded through Global Bureau central programs such as the Commercial Markets Strategy Project, Partnerships for Health Reform, and others. USAID is encouraging U.S. Private and Voluntary Organizations to seek funding through USAID's Bureau for Humanitarian Relief child survival grants program, and is also working with Helen Keller International to implement community-level interventions to address Vitamin A deficiencies.

* Selected Performance Measures:

	Baseline (1999)	Target (2000)	Target (2004)
Total Fertility Rate	3.1 (urban 2.1)	3.1 (urban 2.1)	3.1 (urban 2.1)
Infant Mortality Rate	36.7	36.7	36.7
Contraceptive Prevalence Rate	59%	59%	59%
* The success of the Special Objective program as a whole will be demonstrated by the maintenance of program gains as measured by these indicators.

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ACTIVITY DATA SHEET

PROGRAM: MOROCCO
TITLE AND NUMBER:Increased Attainment of Basic Education among Girls in Pilot Schools in Rural Areas Using a Replicable Model, 608-SpO04
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCES: FY 2000: $500,000 DA; $1,000,000 CSD
INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2004

Summary: Developing a country’s human resource base is central to achieving economic prosperity and political stability. Education is a crucial part of this equation. Morocco’s poor social indicators are due to large inequalities between urban and rural areas and between different segments of the country’s population. Fundamental weaknesses in Morocco’s education system hinder its ability to compete in the global market and to attract more foreign investments.

The Ministry of National Education (MNE) views USAID’s technical leadership in this sector as critical to providing credibility to their strategy for the improvement of rural primary education. In 1994, the national net enrollment rate for all children in primary school was 62% (52% for girls and 72% for boys). Numbers are severely skewed in favor of urban areas. In terms of access to education, girls in rural areas are the most disadvantaged segment of the population with only 27% of girls enrolled in school.

USAID’s objective is to improve girls' academic attainment in selected primary schools in rural Morocco. This will be achieved through integrated activities that address supply and demand issues in education and the policy reforms necessary for sustained change in the basic education system. Special Objective 4 (SpO-04) aims to introduce behavioral change at the school level, negotiate new policy reforms at the central level which are advantageous to girls' education, and to involve the communities and the parents in their girls’ education.

Key Results: By the year 2000, SpO-04 will have developed and tested a flexible replicable model comprised of interventions at the school, community, provincial, and central policy levels. In the second phase (2001-2003), the model will be extended in up to nine additional provinces.

Performance and Prospects: USAID assistance supports: 1) improvement of classroom dynamics through training of teachers and administrators in multi-grade teaching, equity in the classroom, and lesson adaptation; 2) strengthening of MNE capacity at the local, provincial, and national levels to design, manage, evaluate, and replicate the model; 3) initiation of policy reforms which target the MNE management information system, primary education budget, rural teachers’ incentives, and decentralized decision-making; and 4) greater involvement of local communities, private sector entities, and non-governmental organizations in girls’ education.

One of the major weaknesses of the basic education system is the inadequacy of training provided at teacher colleges. Key areas such as child-centered learning, multi-grade instruction, lesson adaptation, and especially equity in the classroom are not addressed. Thus, USAID’s technical work in basic education aims to create an enabling learning environment to increase the participation of girls in the education system.

In further support of the MNE’s new strategy for rural education, activities aim to assist the MNE in mobilizing local communities, local government, and other ministries to support their local schools and assume greater responsibility for school-related decisions. Activities will also build broad-based national-level recognition of the importance of educating girls.

Possible Adjustments to Plans: SpO-04’s experience has shown that specific changes in current school-level activities, might be necessary to ensure more efficient and effective use of resources. In particular, some activities will be redirected towards teacher trainers in the teacher training colleges in the pilot provinces to ensure wider impact and sustainable change.

Other Donor Programs: The host country finances at least 25% of all program-related costs, including manpower costs associated with management, monitoring and evaluation in pilot interventions. The expansion of primary school reforms beyond the pilot area to the national level will be the responsibility of the GOM. The GOM and the World Bank signed a loan agreement for a Social Priorities Program in September 1996, which includes an important basic education infrastructure component ($54 million). USAID’s assistance package was prepared in close collaboration with the World Bank. UNICEF, the United Nations Educational, Scientific and Cultural Organization (UNESCO), UNFPA, the World Food Program (WFP), United Nations Development Program (UNDP), and the French and Spanish cooperation agencies have programs that support elements of the MNE strategy for rural education. The SpO-04 team meets regularly with other donors to ensure that all donors’ activities conform to the strategy and that there is no duplication of effort or waste of resources.

Principal Contractors, Grantees, or Agencies: The primary contractors for these activities include: AMIDEAST, Management Systems International, and Creative Associates International Incorporated (all have U.S. subcontractors). The principal grantee is the Ministry of National Education.

Selected Performance Measures: (for Pilot Schools)	Baseline (1995)	Target (2000)	Target (2004)
Percentage of total number of eligible rural girls enrolled in primary school in selected rural areas	22.3%*	50%	65%
Retention rate for rural girls through the sixth year	36.3%	70%	85%
Repetition rate for rural girls,	9.4%	7%	4%
Percentage of girls who complete grades 1-6	10.1%	22%	35%
* 1992 national level data for girls' enrollment in rural areas.

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