To enhance sustainability of health service delivery, the GOM must make progress on several major initiatives, including: decentralization of integrated service delivery; encouraging a more rapid expansion of private sector participation in health services; strengthening of management and logistics systems; and an increasing assumption of costs for preventive health care activities (which historically have been donor-funded).

Funding is requested in FY 1997 to sustain the momentum of this integrated activity, and to fund a challenging transition plan. As more women enter their reproductive years, sustaining and expanding current rates of contraceptive prevalence and FP/MCH service utilization will necessitate: serving more clients at existing delivery points; extending FP/MCH services to under-served areas; and ensuring that an expanded range of quality FP/MCH services is available, particularly long-term family planning methods. The potential benefits to successful program implementation are high: if the Moroccan FP/MCH program succeeds in reaching every woman who desires a smaller family, there will be six million fewer Moroccans born between now and the year 2012. If the information, education and communications component of USAID's current program is successful in expanding the demand for family planning, this number could increase. Clear policy signals from the highest levels of the GOM provide an opportunity for USAID to move farther and faster in this sector than has previously been thought possible. The GOM is keenly interested in testing and implementing innovative service-financing models, and in expanding partnerships and coordination with a wider range of both public and private sector institutions. The GOM is convinced of the urgency of creating a policy and regulatory environment that encourages sustainable service delivery.

The achievement of improved quality of life for poorer Moroccans through equitable and sustainable social and economic development is predicated on stabilizing Morocco's population and assuring the health and vitality of its people. Sustainable delivery of essential social services; acceptable levels of income and employment generation, especially for the young; and sustainable use of natural resources, especially water resources, cannot be achieved without reduced family size, especially as a large cohort of young Moroccans reach child-bearing years. Even when the replacement fertility rate is reached, there will be a lag of two to three generations before the population will stabilize by the year 2067. Improved levels of health, especially child survival and maternal health, are important to achieving reductions in the desired family size, as well as for ensuring an acceptable level of productivity and quality of life. The achievement of other USAID objectives is integrally linked to reduced fertility and improved health of Morocco's most vulnerable groups, children and women. Conversely, achieving FP/MCH objectives will be reinforced by expanding basic education and employment opportunities for women, improved women's rights, and the involvement of men in family planning.

Agency Goal: Protecting the Environment

Like most developing countries, Morocco is beset with a myriad of environmental problems. The lack of water -- due, in part, to inefficient water management and the negative effects of water pollution -- is a key limiting factor for economic growth and meeting basic human needs. With water demand expected to exceed supply by 2020, the management of water resources is key to Morocco's future economic success. Currently, the quality of the resource base is declining as a result of water pollution from agriculture, urban and industrial sources. Accelerated water erosion of soil caused by deforestation is a major contributor to water supply and quality problems. Water always has been a key part of Morocco's economic and social fabric, and its depletion and degradation provides a focus and organizing principle for USAID's environmental strategic objective.

With the phase-out of energy and clean technology activities in FY 1996 and significant progress in irrigation technologies, a new activity, which focuses on policy and institutional strengthening, pilot activities and leveraging of USAID resources, will require funding to consolidate past progress. Sustainable environmental practices are seriously constrained by the absence of a transparent and binding policy and regulatory framework which provides reasonable benchmarks and incentives for improving performance. Awareness of, and access to, improved environmental technologies also are limiting factors. Finally, limited public awareness of environmental problems and limited capacity to mobilize people to address problems within their communities constitute further constraints to sustainable resource use and pollution prevention. Each of these constraints poses opportunities, if creatively addressed.

Morocco's economic and social development is jeopardized by a range of environmental issues which threaten the basis for agricultural production and exports, the integrity of sensitive ecosystems and human health. Agriculture contributes significantly to economic growth in this largely semi-arid country, providing about 19% of GDP, 32% of exports and 41% of employment, of which 38% is on-farm. USAID has focused its environmental program on key issues related to water efficiency and water pollution. By focusing on key policy issues, institutional strengthening and pilot activities which can impact across the sector, USAID can assist Moroccans to optimize the use of its scarce environmental resources, and leverage donor assistance in support of sound national policies and strategies.

Agency Goal: Encouraging Broad-Based Economic Growth

Key problems which continue to require support under this objective include: (1) policy, regulatory, and institutional constraints; (2) lack of access to financial resources and services; (3) lack of competitiveness of Moroccan firms; and (4) lack of NGOs with the capacity to enhance the economic activities of the disadvantaged. USAID is engaged inaddressing these issues through assistance to help mitigate policy and institutional constraints which generate disincentives, costs, and administrative burdens for businesses; providing access to credit to start and expand businesses and to finance home construction to enable poor people to lift themselves out of poverty and increase their participation in the economy; enhancing the competitiveness of Moroccan firms toward export-led growth and job creation; and fostering the formation of NGOs with the capacity and mission of bringing the disadvantaged into the economic mainstream.

FY 1997 funding is requested to support the microenterprise finance activity launched in FY 1995, and to promote policy, regulatory and institutional reform in areas which enable Moroccans of below-median income to expand their economic opportunities and to meet their basic needs. Key policy and institutional constraints continue to impede broad-based and equitable economic growth. The harmful effects of the current policy environment have disproportionate impact on the poor, and the educated but unemployed youth. The lack of a positive enabling environment imposes limits to the performance of the economy, and the creation of economic opportunity across the board, through negative impacts on the trade regime, the financial sector, the labor market, business start-up and growth incentives, and in training and human resource development. The availability of financial services must be democratized so that efficient micro- and small-scale enterprises can invest, generate employment for themselves and others, and finance home construction. Improvements in the competitiveness of Moroccan businesses, especially agricultural export businesses, will provide employment for poorer Moroccans.

Morocco's highly dualistic development has generated the phenomenon of low growth, low employment and low incomes for the poorer segment of the population. As noted in earlier, poverty is a persistent phenomenon in Morocco, with about 22% of the population living at or near the World Bank-defined poverty level during a good rainfall year, and more during drought years. Sustainable economic growth must address the equity issue: if economic stakeholders are not expanded in Morocco, political and economic instability are more likely to ensue, and the goal of sustainable and equitable development cannot be attained. The attainment of higher employment levels and better living conditions also will enhance USAID efforts to reduce fertility, to improve family health, and to achieve a more rational utilization of water resources.

Morocco's poor performance in education is a major contributing factor to perpetuating poverty and larger family size. The shamefully low rate of education among women, especially in rural areas, limits their contributions to the economy and to their families' economic well-being, to improved environmental management and the wise use and regeneration of renewable resources, and to acceptance of family planning and health services. The major determinant of Morocco's low ranking in the United National Development Program human development index is poor performance in basic education. For example, the average length of schooling hardly reached 3 years in 1992; and 51% of adults are illiterate, including 70% of women. Nationwide, the net enrollment rate at the primary school level is only 58% (48% for girls and 68% for boys). In rural areas the enrollment rate for girls is only 22%, and of these, only 40% complete five years of primary education. USAID is targeting rural primary education for girls for improvement in 20 of the most needy provinces of Morocco. Improving access to basic education and improving retention rates for rural girls through the sixth grade are the principal objectives.

FY 1997 funding is requested to launch this initiative. In 1995, USAID determined that improvements in girls' education would contribute to the achievement of our strategic objectives in population and health, environment and economic growth. Several factors convinced USAID that this was an opportune time to address basic education constraints for rural girls and women in Morocco: (1) the low levels and the marked disparity between male and female levels of educational attainment, especially for rural girls and women; (2) the GOM's recently launched effort to reform the entire national education system, an undertaking which provides a rare opportunity for donors to influence education policy and to address real basic education needs; (3) the ability of USAID resources to closely complement the assistance of other donors, such as the World Bank (which also is preparing to assist the GOM in basic education); (4) USAID's successful experience and expertise in other predominantly Islamic countries where educational opportunities for rural girls and women were severely limited; and (5) the role of basic education in helping to achieve USAID's strategic objectives.

The education of women and girls, especially in rural areas, is linked directly to their participation in the social, economic and political life of their communities and their country. Women who have had at least a primary educationwill have an enhanced awareness of their rights and responsibilities as citizens in the economic, social and political arenas. Investment in girls' education helps to mitigate against Islamic extremism, which often argues for restricted interpretations of women's roles. Educating girls also enhances women's contributions to: the economy and to their family's economic well-being; improved environmental management and the wise use and regeneration of renewable resources; wider acceptance of family health services; and their participation in civic society and democratization.

PROGRAM: Morocco
TITLE AND NUMBER: Reduced Fertility and Improved Health in Children Under Five and Women
of Childbearing Age, 608-SO01
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $9,375,000 DA
I NITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2000

Purpose: To reduce fertility and improve the health of children under five and women of childbearing age.

Background: While progress has been made in extending and improving family planning/maternal and child health (FP/MCH) services, constraints to access and use of these services continue to be reflected in gaps between desired childbearing and use of family planning services, low use of prenatal and postpartum services, high child and infant mortality due to diarrheal disease and acute respiratory infections, and alarmingly high rates of maternal mortality. Challenges include ensuring that FP/MCH services are readily accessible, that quality is sufficient to attract and retain clients and promote improved health practices, and that populations are adequately informed and motivated to use services appropriately. Enhancing sustainability of health service delivery also must address issues related to decentralization, integration of service activities, policy reform for expanded private sector participation in health services, institutional and systems strengthening, and diversification of financing. This program includes the remaining 6 months of FP/MCH Phase IV and the last four years of the 7-year FP/MCH Phase V projects.

USAID Role and Achievements to Date: USAID initiated support for FP/MCH in Morocco beginning in 1971, and since has become the Government of Morocco's (GOM) principal external partner in this program. U.S.-Moroccan collaboration has resulted in an increase in contraceptive prevalence from 42% in 1992 to 50% in 1995; and a concomitant decline in total fertility of 25%, from 4.8 in 1987 to 3.6 children per woman in 1995. United States assistance has also supported GOM efforts to increase childhood immunizations from 76% to 85% since 1992, and to increase the usage rate of oral rehydration solutions (ORS) for treatment of diarrheal diseases from 15% in 1992 to 29% in 1995. Further, the private sector is increasingly participating in family planning activities, with social marketing of contraceptives reducing the costs of contraceptives to the consumer by 27% since 1991; and with 300,000 couple years of protection achieved through private sector sales of contraceptives in 1993.

Description: USAID focuses on increasing use of quality FP/MCH services and on their longer term sustainability through four activity areas: establishing greater access to quality FP/MCH services responsive to client demand; re- enforcing institutional capacity to manage FP/MCH programs with particular emphasis on decentralized approaches responsive to client need; improving the policy environment to support expansion of FP/MCH services; and promoting increased diversification of the resource base for financing the delivery of FP/MCH services. Support is channeled primarily through the Ministry of Public Health (MOPH), for strengthening the ability of the system to provide an expanded range of services, with emphasis on long term methods of family planning, diarrheal disease control, quality safe motherhood services, and sustainable immunization activities. Assistance is also provided in the areas of use of data for decision making and for effecting programs responsive to client needs; and for private sector participation in preventive health care service delivery. The GOM has been assuming increasing percentage of contraceptive and local cost requirements for the FP/MCH program. USAID is supporting private sector marketing of ORS as a self- reliant product.

Host Country and Other Donors: USAID has traditionally been the lead donor in family planning in Morocco and has been an important contributor to MCH activities. UNICEF is a major donor in child survival, particularly for immunizations and diarrheal disease programs, including the ORS social marketing activity. UNICEF also supports acute respiratory infection, safe motherhood and breastfeeding programs. UNFPA is a principal donor in the area of population, including Information, Education and Communications (IE&C) activities and safe motherhood initiatives.

The World Health Organization (WHO) provides support for AIDS control, public health training, communicable diseases and epidemiology. The European Union (EU) is assuming an increasingly significant role in the areas of population in health, specifically in post-partum family planning; and also contributes in the areas of vaccine production and safe motherhood. The World Bank and the African Development Bank are negotiating sector support. The MOPH develops national plans and strategies for the sector, for which it seeks donor support. MOPH contributions include infrastructure, personnel, operating costs, pharmaceuticals, etc. Family planning is clearly seen as a priority for the sector, and as an "engine" that promotes services and systems development in related areas.

Beneficiaries: Children under five years and married women of child-bearing age in Morocco represent approximately 28% of Morocco's population (27 million). USAID-supported programs, which operate at the national- level, are ultimately expected to reach these beneficiaries.

Principal Contractors, Grantees, or Agencies: USAID implements activities through a U.S. firm.

Major Results Indicators Baseline Target

Total Fertility Rate 4.2 (1992) 32 (1999)
Infant Mortality Rate 57.0 (1992) 52 (1999)
Child Mortality Rate 20.0 (1992) 18 (1999)
Maternal Mortality Rate 332.0 (1992) 245 (1999)
Contraceptive Prevalence Rate 41.5 (1992) 58 (1999)

______________________________
1Source: Demographic and Health Survey, 1992

PROGRAM: Morocco
TITLE NUMBER: Expanded Base of Stakeholders in the Economy, 608-SO03
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $4,000,000 DA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2002

Purpose: To encourage broad-based economic growth by expanding the base of stakeholders in the economy, targeting people of below-median income.

Background: Poverty among both rural and urban Moroccans persists at a high level. To date, Morocco has not yet developed the capacity in its institutions or policies to integrate poorer Moroccans into the mainstream of the economy. Although the country has made good progress, and its leaders remain committed to economic stabilization, continued USAID assistance will be key to making further improvements in Morocco's enabling environment, market competitiveness of employment-generating firms, and access to financial resources of small and micro-enterprises. Activities subsumed under this strategic objective include: New Enterprise Development (NED), Morocco Agribusiness Promotion (MAP), Microenterprise Finance (MFA), Accessing International Markets (AIM), and Privatization Sector Assistance (PSA). Some of the relevant results of the Mission's urban housing activities will also be reported under this SO.

USAID Role and Achievements to Date: During the Action Plan period, the Mission will focus on a set of direct, activity-level interventions, including policy and regulatory actions, to stimulate micro, small and medium-sized enterprise development, agribusiness market development, and low-cost housing construction. USAID achievements include helping Moroccan firms export $50 million worth of horticultural and other products, $22 million in 1995 alone. These increased sales generated 7,000 job-years of employment, of which about 60 percent were for women and nearly all were for people from lower-income strata. Nineteen million dollars of MAP- and AIM-assisted export sales have gone to non-traditional markets, and $15 million in sales comprised new or non-traditional products which help to diversify Morocco's export product base now and in coming years. Through the Morocco Housing Guarantee Program (HG-004), urban households of below-median income are becoming home owners -about 40,000 families to date. The land development component of the HG program generates employment at the rate of about 1,000 person-years for every $1 million in loans. Spinoffs are other jobs (estimated at an additional 13% in one study) generated in those neighborhoods, especially in microenterprise. Approximately 25 small business associations have been strengthened as advocates for member interests, policy reforms, and new market opportunities--supporting greater employment and production. Under the Privatization Program, 41 companies have been privatized, yielding $880 million in revenues and 100,000 new, first-time shareholders. An additional 5,000 employees have purchased shares in their own privatized firms.

Description: Funding is required to support the microenterprise finance activity launched in FY 1995. Other on- going activities under this SO have adequate funds to continue until FY 1997, and two major activities (PSA and AIM) will end in FY 1996. Under MFA, an initial microenterprise finance entity will be strengthened and begin a pilot lending program to needy individuals during the first 18 months. In subsequent phases, additional lending units will be established, will develop self-financing lending programs, and should be providing easy access to credit for 5,000 poor families--30% women--by the end of the project. The NED project, working through the employer's confederation, should show significant movement over the next three years in reducing administrative obstacles for small business, in simplifying procedures, in fostering a more liberal interest rate structure, and in increasing the voice of small entrepreneurs in the Moroccan decision-making process. Through housing loan guaranties and leveraging of private sector financing, USAID supports a program that will provide access to serviced, titled housing lots to over 300,000 squatter families, and will upgrade conditions for another 150,000 of the urban poor. The MAP project will continue to expand markets and create jobs for the poor within Moroccan horticultural growing, processing and exporting firms, and will also place increasing emphasis on strengthening key institutions and regulatory functions which will ensure a successful transfer of responsibility after the project ends in 1998.

Host Country and Other Donors: Through separate activity agreements, the Government of Morocco will finance $15 million and the private sector $16 million of the total costs associated with the MAP, NED, MFA, AIM and PSA activities. The Ministry of Agriculture and World Bank are using the MAP project as a model for the Bank's agro- industrial project which is currently being designed. UNDP and World Bank grants complement USAID's efforts in privatization. The NED project also collaborates with the World Bank, and the MFA will be sharing information with the World Bank and the European Union.

Beneficiaries: The principal beneficiaries of the activities under this SO are people from lower economic strata, both rural and urban, who gain employment opportunities, low-cost housing, and access to financial resources. Micro- and small entrepreneurs acquire improved access to credit and other services, private employers of all sizes, especially agribusinesses, benefit from enhanced productivity and opportunities to compete in international markets and Moroccan consumers also benefit from increased availabilities of food products and improved food quality and safety standards.

Principal Contractors, Grantees, or Agencies: The primary contractors for these activities include: Development Alternatives, Inc., USDA/FAS, and the University of Minnesota (MAP); Chemonics International (NED); the International Executive Service Corps (AIM); and Price Waterhouse (PSA).

Major Results Indicators: Baseline: Target:

Person-years of employment for
below-median-income people
(60% women) 271 (1992) 13,300 (1998)

Increased number of below-median-
income households owning homes
(urban) 24,250 (1998) 70,000 (1998)

Business licenses issued to small and
medium-sized enterprises 16,000 (1998) 102,000 (1998)

Background: Approximately 70 % of Moroccan women are illiterate (approximately 50% of all adults). Nationwide, the net enrollment rate at the primary school level is only about 58% (48% for girls and 68% for boys). However, the primary school enrollment rate (for boys and girls) in urban areas is 89.4% and only 36.7% for rural populations. The enrollment rate for rural girls is a dismal 22% (compared to 50.4% for rural boys). Of the minority of rural girls who enroll in primary school only 4 out of ten complete the fifth year of schooling.

USAID Role and Achievements to Date: Morocco is in the process of making major reforms within the education sector. In 1996, USAID began helping the Ministry of National Education to introduce educational innovations designed primarily to improve retention of rural girls during the first 6 years of schooling. These innovations would be tried first in pilot schools in four provinces and then potentially expanded to 20 provinces.

Description: USAID assistance will support: the broader application and improvement of multi-grade curricula in rural primary schools; training of existing teachers and administrators in the use of multi-grade instruction; pilot education promotion programs in selected provinces which strive to remove perceived obstacles to girls' retention and enrollment; the improvement of teacher training within the system of teacher colleges with an emphasis on increasing the number of female primary school teachers; the introduction of systematic methods for performing operations research for primary education; developing processes for quantifying gender disaggregated impact of education reform efforts; evaluations of progress toward pre-identified goals for girls and boys; and, technical exchanges on U.S. and international experience on successful techniques for improving primary education for girls.

Host Country and Other Donors: The World Bank is working collaboratively with USAID to prepare a complementary assistance package in basic education within the same 20 provinces. The Bank assistance includes support for upgrading school facilities. The host country will finance virtually all domestic staffing and other local costs associated with implementing pilot primary education efforts. The expansion of primary school reforms beyond the targeted areas and ultimately nationally will also be undertaken by the host country.

Beneficiaries: In Morocco, there are about 2.5 million girls of primary school age. Approximately, 1.3 million of these girls live in rural areas and are directly affected by the weaknesses of the rural primary school environment.

Principal Contractors, Grantees or Agencies: USAID will implement activities through U.S. cooperating agencies.

Major Results Indicators:
Baseline (National) Target in Pilot Areas
Rural girls' primary retention rate 39.6% (1992) 52% (2001))
Rural girls' primary enrollment rate 22.3% (1992) 38% (2001)

Purpose: To improve Moroccan water resources management practices and systems in the agricultural, urban and industrial sectors.

Background: The lack of water - due to inefficient water management and the negative effects of water pollution - is a key limiting factor for economic growth and meeting basic human needs. With water demand expected to exceed supply by 2020, the management of water resources is key to Morocco's future economic success. The following ongoing projects are being incorporated into this Strategic Objective: Water Resources Management, Urban and Environmental Services, Tadla Resources Management.

USAID Role and Achievements to Date: The USAID role includes interventions in agriculture, industry and urban settings. USAID has had programs relating to water management in agriculture, industrial pollution, and urban environmental services. To this has been added a water resources management program. Residual industrial pollution activities are incorporated into that program. Achievements to date include the following. New laser leveling and level-basin irrigation technologies have improved water use efficiency in one of Morocco's largest irrigation perimeters. Energy and environmental audits have led to savings of more than $12 million to date for companies involved in USAID-assisted activities and have reduced emissions and the use of petroleum. Clean technology activities have reduced surface water pollution in targeted areas and improved conditions for both workers and the public. Under USAID's urban environmental programs, modern sewerage and potable water systems have been brought to over 400,000 people (70% for whom are below median income), with indirect benefits such as reduced seasonal flooding and related water-borne diseases to an additional 200,000 low income people over the last decade.

Description: USAID water resources management interventions will focus on policy and institutional strengthening, with pilot activities demonstrating improved technologies related to erosion, water reuse, and reduction of effluents from certain industries. Urban environmental interventions will continue to work with governments and citizens on improving environmental services delivery and providing basic environmental infrastructure, such as sewers and sanitary landfills. Work with irrigated agriculture will advance water-saving technologies.

Host Country and Other Donors: The World Bank has complementary programs in irrigated agriculture and municipal finance, as well as planned programs which will be able to take advantage of USAID program models for pollution reduction and water savings. There are small interventions by various European donors. The host country will contribute at least 25% to total cost of the USAID interventions.

Beneficiaries: Beneficiaries range from farmers, to urban residents (in particular poorer families), to workers in polluting industries (such as tanneries).

Principal Contractors, Grantees or Agencies: U.S. firms and local organizations, including NGOs

Major Results Indicators: Baseline Target

20% reduction in harmful residues 100%(1994) 80%(1999)
(chrome) released into river
systems by Moroccan tanneries

Increased % of poor households 60%(1994) 80%(1998)
connected to sewerage and potable
water

Improved canal conveyance 0 mil m3/yr 70 mil m3/yr
efficiency (measured for vol. (1994) (1999)
of water savings from improved
systems-level canal mgmt.)
duced amt. of soil erosion 510tons/km2/yr 740tons/km2/yr
easured by sediment outflow) (1994) (1999)
in target areas

USAID Mission Director : Michael Farbman