Thus history suggests that dictators come in two types: one whose personal objectives often conflict with [economic] growth promotion and another whose interests dictate a preoccupation with economic development. The theory that determines which kind of dictatorship will prevail is missing. Absent this theory. the choice of a dictatorship can be viewed as a risky investment; economic outcomes may be very good or very bad but are surely uncertain.
- Economist Robert J. Barro (1996)1
The experience of the U.S. Agency for International Development (USAID) in the Kingdom of Morocco prompts three questions.2 First, does USAID support for World Bank structural adjustment, combined with program emphases on "open markets and open societies" enable governments to overcome constraints to economic reform? Second, has structural adjustment resolved Morocco's debt crises, liberalized a longstanding U.S. regional ally, and rid it of corruption? Third, is open market/open-society policy a viable liberal blueprint or, conversely, a self-determined and historical process of development and change? Much of what follows is a criticism of the excessive liberal rhetoric of U.S. foreign policy and the reality of a Moroccan political system that is fundamentally unresponsive. This paper argues that incongruities between USAID's liberalization support, U.S. foreign policy and uneven reform implementation by the governments of King Hassan II underlie Morocco's post-adjustment underperformance. Not only is USAID's reform-implementation record mixed, but policies such as privatization disguise a fundamental dilemma: how to privatize and rationalize the Moroccan monarchy. Once posed, the question becomes less one of state versus market than of how to organize industrial structure, political obligations in the polity, and associational ties in ways that make the economy work towards societal objectives. Complicating the privatization of the monarchy and the liberal path of development are the Royal Court's strategies for keeping power during economic crisis and for making monarchical interests coincide with unbalanced growth.
MOROCCO'S ECONOMIC CRISIS
Beginning in 1978, Morocco began working with the World Bank on debt reduction but with little initial success. Morocco attempted two early stabilization plans with the IMF, the first (1978-80) consisting of a cap on government expenditures and raised tariff protection, followed by a second (1980-83) coupling devaluation with fiscal stimulus.3 Both failed.
As in many countries, political pressures thwarted preemptive economic adjustment. When the military conflict broke out in the Western Sahara in 1975, world phosphate prices were at record highs. The next year, world phosphate prices fell and the Saharan conflict cost $1 million a day (40-45 percent of the budget and a forgone 40-percent reduction in state debt).4 In bolstering political patronage, King Hassan promoted an agrarian class that benefited from irrigated agriculture and largedam construction.5 However, this policy bias led to the neglect of dry-land agriculture, stagnation in manufacturing growth between 1969 and 1980 (16-17 percent of GDP) and a negative agricultural trade balance.6 After 1973, nationalized foreign firms enjoyed rationed state credit, leading nonetheless to an uncontrolled expansion of state subsidiaries by 92 percent between 1973 and 1977,7 and negative net transfers from state companies to the Treasury (-5.7 billion Dirham [DH]).8 While phosphate revenues permitted state investment, they also funded sharp increases in civil service employment and consumer food-subsidy programs.9 Thus, total debt as a percentage of GDP climbed from 20.24 percent in 1975 (7.36 billion DH) to 134.7 percent of GDP in 1985 (161.18 billion DH).10 State interventions became as costly to maintain as King Hassan's political clienteles.
As a regime employing economic policy for political purposes, the Moroccan state or makhzen (treasury) was the center of government failure, but it failed as Moroccans attempted to reclaim their economy and build up their infrastructure. The makhzen is a historical term that, in the minds of many analysts, remains relevant in the present day. Characterized by the "domination of a central government ruled only by its 'raison d’état' and a passive and instrumental 'property less' mass,"11 historically the makhzen was headed by a sultan who ruled Morocco as an extension of his royal court. The contemporary Moroccan administration is also akin to a private fiefdom with no separation of public and private. In contrast to the weakly institutionalized (patrimonial) regimes of Africa, the Moroccan system of patronage, rent-seeking and corruption forms the basis for political control; they are not endemic and state-weakening, but planned and state-promoted.12 In other words, Morocco's political institutions are institutionally weakened by the monarchy and security apparatus in order to serve a private oligarchy of elite families. State interventions do not supplant the private interests of the state elite; they promote them.
Although the state works towards a modicum of economic development, distributive outcomes are inequitable. King Hassan named every holder of high economic positions since the mid- 1960s,13 such that "by 1978, 68 individuals or families controlled 55 percent of industrial capital, of which one-third was in the hands of only 10 groups."14 The drawback of these oligarchies, as Hutchcroft (1993) described the Philippines, is that ''the state is more often plundered than plunderer."15 In Morocco, 7,500 landowners owned the bulk of arable and irrigated land.
Between 300 and 2,000 families owned the country, and the royal family held one-fifth of all wealth.16 Elites consumed 65 percent of national income. On the downside, thousands of Moroccans leave clandestinely for Europe each year, the 1980 illiteracy rate stood near 60 percent; and 80 percent of rural households generate no surplus income. The Moroccan state is security-strong yet policy-weak in handling war and the rapid acquisition of industrial and agricultural state property.17 Only in the depths of crisis did Morocco seek IMF assistance for a debt-reduction package of stabilization and sectoral reform.18
AID AND U.S. FOREIGN POLICY
In the 1980s, the United States courted King Hassan II mainly for strategic reasons, and development assistance soon followed. Through the early 1990s, U.S. economic assistance to Morocco exceeded military assistance at around $100 million per annum, with development assistance doubling from roughly $20 million per annum in the 1970s to over $40 million in the 1980s.19 The Reagan administration developed strong ties to King Hassan after the 1978-79 Iranian revolution. At that time, U.S. banks including David Rockefeller's Chase Manhattan and Walter Wriston's Citicorp were suffering from mounting losses in Iran and Latin America."20 Reagan named former Chase Manhattan executive Joseph Verner Reed to serve as the U.S. ambassador to Morocco (1981-85), and Walter B. Wriston, the chairman of Citibank (1970-84), as chairman of his Economic Policy Advisory Board (1982-89).21 In January 1984, Citicorp and the Banque Nationale de Paris (BNP) chaired a steering committee representing 200 commercial banks (the London Club) which rescheduled $500 million of Moroccan debt.22
Defense and security relations became intertwined with debt and debt reduction. The United States valued King Hassan's moderate stance on the Arab-Israeli conflict In 1983, Morocco signed a military base-access (transit) agreement mentioned favorably in State Department congressional presentations. Algeria's mediation in Iran, which led to the freeing of U.S. hostages, coupled with Libya's involvement in the bombing of a German discotheque, brought the United States to reassess its relations with the regional alliances, split between the Moroccan-Libyan alliance (Oujda Agreement, 1984-86) and the AlgerianTunisian-Mauritanian alliance of 1983. Shortly before the April 1986 bombing of Tripoli, General Vernon Walters and CIA Director William Casey visited King Hassan on the occasion of his birthday. Fearing reductions in U.S. military aid, King Hassan broke with Qadhafi and opened public discussions with Israel.23 This 1986 shift in regional alliances coincided with the reopening of IMF standby facilities. The United States has since viewed King Hassan as a spokesman for tolerant Islam, in contrast to the Islamic militancy in neighboring Algeria Moreover, the United States values King Hassan's role in mediating Arab-Israeli peace, despite Reagan's tepid response to the 1982 Fez summit The United States has backed a planned U.N. referendum of self-determination in the western Sahara and has recently worked with Germany on a negotiated settlement to the war.
Within the foreign-policy community, USAID has a lower profile and mandate. USAID's development-assistance program comprises loans and grants, with PL-480 Title I Food for Peace lending and Section 416 Food for Progress administered by the USDA since 1990. Morocco has used these programs to finance U.S. wheat imports (between $20 and $56 million, 1985-93), while USAID programmed local currency earned from these Title I sales for the agricultural investment budget. Title II programs that give humanitarian relief through projects in maternal and child health had been a minor but important program component in drought years (between $2.1 million and $18.1 million, 1985- 1993). In addition, the Housing Insurance Guaranty program underwrites private bank loans for low-cost housing. A 1996 request for $1.29 million will support democracy-related projects.24 USAID aid levels were small in the early 1980s, ($159 million) relative to France ($584.4 million), Germany ($167.1 million), OPEC countries ($918.4; 1976-81) and the World Bank ($645.0 million, 1980-1982). By the mid-1990s, USAID provided only 4 percent of donor assistance.25
At the field level, USAID and the World Bank did not agree on many policy issues in Morocco. The USAID mission in Rabat voiced doubts about the political feasibility of an IMF plan to cut Morocco's outstanding debt in half over a two-year period. In the early 1980s, USAID decided to "stay abreast of IBRD [World Bank] and IMF negotiations, and... where we believe it appropriate, we will independently associate ourselves with such recommendations."26 USAID equally acknowledged its limited influence on Moroccan policy:
USAID is not and cannot be the leader in addressing these immediate, enormous problems. It can encourage, stimulate, educate, cajole and assist the Government to maintain its commitment to the reforms designed to address them, and it can increase specific efforts to help implement them. But unlike the IMF and the World Bank, it cannot apply the leverage that accompanies the availability of large financial resources.27
In 1983, USAID officials saw "little likelihood of the U.S. Government engaging the key decision-makers (essentially the King and his immediate Palace entourage) in a dialogue on major macroreconomic issues." Consequently, they argued that "by judicious selection of a few topics, the careful positioning of our program elements, the sustained cultivation of informal relationships, and first rate analysis introduced with sufficient delicacy and persuasiveness, it should be possible to influence the direction of various developments of a sectoral nature."28
Given these limitations, USAID focused on policies designed to address long-term development constraints in the areas of dry-land agriculture, health/population, energy and private-sector development USAID sought lower food grain deficits, lower population growth rates, better basic health care, improved energy and conservation planning, in addition to export-led growth via the private sector to "promote open markets and open societies."29 During the adjustment period, USAID's program aided economic reform in six areas: (a) balance of payments, (b) technocratic capacity building, (c) private-sector/export promotion, (d) divestiture/liberalization, (e) administrative reorganization, and (f) restructuring social policy (safety net). These aspects of economic reform are equally significant, in that they imply a fundamental restructuring of the political regime toward a more indirect and impartial system of economic governance with greater participation by the private sector, societal organizations and local government A cursory examination of these six aspects are illustrative of USAID's policy-support role.
Balance of Payments. During a non-preemptive crisis stabilization, the U.S. government assisted Morocco in easing its overall financial obligations. In 1983-84, the Moroccan government required $700 million in concessional financing to meet obligations after debt rescheduling.30 The United States increased balance-of-payments support through programming, rescheduling bilateral aid and consolidating Morocco's debt.31 In December 1983, the United States rescheduled bilateral debt in a global agreement covering all U.S. agencies. During a November 1983 donor meeting to rally balance-of-payments support, USAID pledged an additional $32 million in Housing Insurance Guaranties and PL-480 Title I supplements-significantly less than the extra pledges from France ($175 million), the World Bank ($150 million) and Saudi Arabia ($100 million).32 As an active member in the donors' Consultative Group, the United States and other donors and international financial organizations in 1985 agreed to provide $3 billion per annum during the 1985-87 period, at a time when Morocco could not pay back its $13 billion debt-equivalent to its annual GDP. Abdellatif Joahri, the finance minister, requested this January meeting in the face of default.33
Capacity Building. The withdrawal of state interventionism does not mean fewer but, paradoxically, more state institutions, information and authorities for well-functioning markets.)34 Capacity-building is not simply a matter of increasing technical competence but of strengthening the institutions connecting government and societal organizations that improve information, accountability and countervailing power.35
USAID interventions improved the analytical power of management staff, and AID-sponsored public forums bringing technocrats, academics, businessmen and consultants together in public dialogue. Numerous AID projects provided direct technical assistance to ministries engaged in economic reform. The agency financed the analyses of monetary markets, anti-trust laws and price deregulation for the Ministry of Finance and its Pricing Directorate. USAID funded direct technical support to the Ministry of Agriculture, which undertook a detailed analysis of the cereals subsector arid its liberalization. Additional monies provided support for Morocco's emerging authority governing export quality control, technical training to future private and public-sector professionals and for the organizations representing small and medium enterprises.36
Private Sector/Export Promotion. The Africa/Near East bureau's "open-market-opensociety" policies facilitate state withdrawal and the orderly transition to private savings and investment, notably in export sectors. Moreover, the United States promoted U.S. business as Morocco liberalism its laws governing foreign investment USAID worked to reduce international market-information costs, to minimize export risk and uncertainty, to improve technical business training, and to increase microenterprise credit access. The vehicles for reform were projects that provided training, foreign-exchange facilities and export insurance programs to private exporters.37 USAID used development assistance to promote private horticultural exports, to train new businessmen and to spur the creation of microenterprises and the encouragement of women entrepreneurs.38
Divestiture/Liberalization. Morocco conducted a ten-year debate on issues of divestiture. Slow deliberation has been due to (1) the political resistance of public-sector managers, (2) the government's desire to attract quality investors, (3) the financial constraint of cleaning up debts crossing state and private sectors, and (4) the financial-technical constraints in preparing firms for sale. In 1985, Morocco sent the largest delegation to a USAID privatization seminar in Washington, but only in 1988 did the Parliament pass a law slating 112 enterprises for sale.
USAID's Morocco Privatization Sector Assistance Project provided a $20-million cash grant to be conditionally disbursed. This assistance has funded public enterprise audits of international standards, privatization strategies for individual firms and an adviser to the Ministry of Privatization. Given the privatization program's goal to broaden economic stake-holding through public share holding, concurrent reform of the financial market was initiated. USAID funded a Financial Market Reform project, hiring a financial consultant to advise the financial sector and the Central Bank. The project worked on the monetary market, the bond market, a market for mortgages, and the Casablanca capital market Consequently, USAID was instrumental in linking financial market reform to divestiture policies.
Administrative Reorganization. In theory, the fiscal austerity inherent in World Bank stabilization policies puts pressure on governments to decentralize and to rely more on local financing. At the extreme, fiscal federalism shifts most of the decisions concerning the selection and provision of publicly budgeted goods to local communities. Since 1976, the Moroccan state has reversed state centralization and promoted locally elected bodies. Although USAID's policies are mostly a response to urbanization, emphases on the local provision of goods and services are connected to the austerity budgets. USAID's 1988 feasibility study identified financial institutions that might support decentralization, notably various market instruments (municipal bonds, etc.) and public incentives such as industrial zones ($1 million, 1990-93).39 USAID followed with the Urban Development Management and Finance Project ($5 million, 1986-89), designed to improve municipal finance and urban planning.
Social Policies. Beginning in the early 1970s, the population was falling through a safety net during the droughts of the decade and the land concentration in rural Morocco. Societal pressure on the state, however, was reduced by outmigration to Europe and the expansion of the informal sector (estimated at 60 percent of the economy). In the north, illicit smuggling and hashish trafficking otherwise sustained the economy. During the contraction (1978-85), per capita incomes fell in real terms of about $631 (1981) to $515 (1985) as Morocco left the ranks of middle-income countries."40 Consequently, there has been a reversal in social mobility, which pushed a poor population to the brink while some 100,000 Moroccans holding graduate degrees remain unemployed. Popular urban protests broke out in 1981, 1984 and 1990. Services deteriorated with cuts in social spending.
USAID led initiatives to restructure the delivery of publicly provided social services whose budgets were cut in the adjustment process. USAID placed its emphasis on long-term population planning and primary health services, particularly for women and children. USAID also conducted feasibility studies for privatizing health services. In the area of housing, the United States used the Housing Investment Guaranty Program to improve the shantytowns of Tetouan and Ben M'Sik (Casablanca) through the private construction of affordable housing. These policies, in addition to others promoting microenterprise, dryland agriculture, and economic stakeholding, direct resources to those not served by state policy.41
REALITY CHECKS AND THE WAR
USAID and the World Bank applauded Morocco's record on adjustment-cum liberalization reforms in the early 1990s. However, their own closer examinations revealed mixed policy results: insufficient levels of economic growth, investment and institutional reform that were undercut by inequity and population increase.
Both USAID and the World Bank claim achievements in policy-based lending by working collaboratively with the Moroccan government USAID witnessed infant mortality drop from 120 deaths per thousand in 1983 to 71 deaths per thousand in 1988. immunization coverage for children under five was extended from 50 percent to 87 percent Contraception was practiced by 36 percent of women of childbearing age in 1988, up from 19 percent in 1983. Energy conservation efforts by USAID saved approximately $10 million annually (1987-89). and USAID financed efforts to develop a cost-effective energy model for the Ministry of Energy and Mines.42 Private business accessed export markets and potential partners overseas. And analyses of pricing and cereals markets were used to make policy decisions.
In the larger macroeconomic scheme, the U.S. government and various donors aided Morocco's orthodox stabilization efforts in the depths of economic contraction. Since 1986, the macro-results have been impressive, if qualified. Export values doubled from $2.17 billion in 1984 to $5.01 billion in 1994, yet they have not kept pace with imports ($3.91 billion to $7.18 billion for 1984-94 period).
Investment as a percentage of GDP has averaged 22-23 percent This rate is lower than the 30 percent necessary to drive high economic growth. Current account deficits were reduced from -$1.69 billion in special drawing rights (SDRs) in 1982 to-$382 million SDRs in 1993. Much of this improvement, however, was due to remittances sent home by Moroccan workers living abroad ($23 billion in 1993)-an amount that offset the trade deficit Total external debt remains high at 260.4 percent of GDP, but has been reduced from its 1985 high of389.l percent Gross Domestic Product per capita stagnated from $974 in 1980 to slightly above the decade debut at $1,060 in 1990. The unemployment rate stood unabated at 16 percent in 1992 for the general population and 30 percent for young adults.43 Manufacturing, once comprising 16 percent of GDP, now accounts for 18 percent However these changes are due partially to shifts in global textile regimes that favor North African over East Asian imports, independent of economic reform in Morocco. More problematic, reductions in government consumption came at the expense of state investment, education and social programs.44
What appears is a mixed economic result-low economic growth undercut by inequity and population in with performance driven by both exogenous and endogenous factors. The major exogenous boost for adjustment resulted from Morocco's participation in the U.N. alliance during the Gulf War. After the war, Saudi Arabia canceled $2.7 billion of Moroccan debt. In 1992, the Paris Club of public creditors generously rescheduled loan repayments on $11.5 billion of debt This prompted Pierre Botellier, the regional IMF director, to declare an "end of adjustment" The United States granted waivers of$196.4 million through its Foreign Military Financing Program over a five-year period (1989-1993).45 These rewards by the international financiers and Western countries not only eased debt service, but put Morocco in a position to attract foreign investment.. These were not policy-induced gains, but rather politically fabricated ones that were far from the policy trenches of USAID institutional reform.
LIBERALIZATION: A CLEAR PATH?
USAID has not been as successful in its programs supporting Morocco's economic liberalization. One group of economists ranks Morocco 121 in the world in terms of economic freedom, behind Senegal, which experienced adjustment-implementation problems." Morocco's lack of open markets is seconded by the lack of an open society, running counter to USAID's hopeful policy statements. USAID might be criticized for its short project-time horizons and ideological program shifts (from a priority on privatization to health and population). One can also cite agency ineffectiveness due to congressional oversight (i.e. buy-American laws, bans on USAID's working with Morocco's citrus sector, and new congressional plans to cut population programs). But USAID's policy shortfalls in opening markets and societies via the institutional changes discussed above are due to the monarchy's selective implementation of market reforms as well as to the multiple goals of U.S. foreign policy. These both tend to promote security and foreign investment (a truncated liberalism) before liberal institutional reform.
Beginning with the Political side of the equation, the terms "civil society" or "open society" raise suspicions when attached to development programs or governments' own programs for promoting their liberal images abroad. If civil society refers to the associational life situated between the family and the state,48 monarchies encounter two definitional problems with this post Enlightenment construct. The obvious quagmire is that the state itself is a royal family that "familializes" associational life. The second complication is that the monarchy controls state clientelism (or patron-client ties), which extends beyond the level of the royal family, yet does not constitute a "complete substitute for institutionalized politics."49 As Jackson and Rosberg (1982) argue, these social institutions tend to last only as long as the individuals themselves, but in Morocco they are solidified by alliances of marriage. Thus King Hassan's system of state clientelism is"a structure between 'civil society' and the [Hobbesian] 'state of nature"' - anarchy.50 And it is the latter that Moroccans most fear as the succession to the throne nears.
The relevant points for past and future USAID programs are that (a) organized society is deceptively pluralist with a limited social base; (b) associational life has been destroyed as much as it has been reworked during crisis and limited reform; and (c) policy coalitions are formed with great difficulty in such a system. The destruction of civic life was most evident under the governments of Prime Minister Maati Bouabid and Interior Minister Basri ( 1979-1983), which cracked down on all opposition forces, ranging from the Islamists, communists, students and opposition parties to labor-union activists. In the World Bank's efforts tore construct it, they arguably advocate more flexible labor laws when the current laws have never been respected. These laws are so flexible Fez employers arbitrarily lock workers out, and the state itself has paid civil-service wages below the official minimum wage during the adjustment period. Formal associational life is overshadowed by the militarization of society (195,000 soldiers) and a security apparatus that monitors the streets.
Since the beginning of structural adjustment, the state has mainstreamed the fringes of the political system, mainly by increasing the human costs of not playing the game. In 1990, at the LaBaule conference, King Hassan refused Fran is Mitterrand's call for greater democracy in Africa. Despite domestic and international pressures to raze the Tazmarart prison, to respect human rights and to call elections, the monarchy has conceded very little power. In an effort to improve its image, the state created a Consultative Council on Human Rights (CCDH), but the body has not addressed issues raised by Morocco's three human-rights organizations.51 Rather than implement a new framework for "civil society," King Hasa1has given a greater voice and organization to a liberal wing of the state elite by sponsoring the creation of regional associations headed by them. This modem-day klmsa (elite) has historically served as the Palace's liberal "outward face," and they take their public role seriously. Yet Morocco illustrates Peter Ekeh's reminder to USAID that in revolutionary France, "the term civil society was another word for high society,... the ruling groups concerned with the interests of king and country."52 These associations have yet to demonstrate any political weight, independence or consolidation outside rerouted Palace patronage.53 While the "enlightened" elite are promoted, the state has condoned, if not fostered, violence between Islamist and socialist students on university campuses (Fez, Oujda) in an attempt to defend a "moderate" middle ground.
In terms of constitutional and democratic reform, rigged national elections took place in 1994 without the formation of a coalition government King Hassan and the political parties now await the planned bicameral assembly scheduled for spring-1992 elections.54 But Moroccans are pessimistic that significant change will occur, given that the Constitution does little but reinforce the monarchy's history of tinkering with the number of Parliamentary seats and rules for their contest without any significant broadening of Parliamentary power.55
There are implications that USAID's liberalization efforts are being overshadowed by the monarchy's choice of governance strategy and a general incapacity to reach the poor. Where USAID assistance supports decentralization, the interior minister manages the accounts of local collectives, enforces collectively owned lands, monopolizes mining/quarry rights and keeps accounts out of Parliamentary view. Without liberal inspiration, the state decentralized Casablanca to prevent social mobilization after the 1981 urban riots. Where the state has enacted legal changes in the 1990s that grant foreign and domestic companies access to arbitration, these reforms (much like USAID-supported legal changes for small enterprises) stop short of judicial overhaul. Businessmen have legal privileges not available to many Moroccans, yet the Palace elite enjoy freedom from prosecution for embezzlement.56 In the area of education, USAID supports assistance to private technical and vocational institutes for business and administration. Yet these elite owned schools, which furnish skills necessary for global economic competitiveness, show few signs of critical discourse, Islamic education, student political organization or the teaching of philosophy (which was banned in universities through the 1980s). The by-products of top down restructuring may not be in keeping with the interests of most Moroccans, particularly those hurt by ignorance, poverty, corruption and repression.
Although USAID's efforts have improved the delivery of social services, the cuts in the health, education and investment budgets may have detrimental effects on Morocco's long term development Consequently, USAID's limited efforts have not resulted in significant extensions of social services to the urban and rural poor. The expansion of Islamic groups such as Isiah wal-Tajdid, which provide social services to the poor, attests to such inadequacy. The largest social safety net, the family, is tom. In cities youth are pushed into subsistence efforts that range from hawking goods in the informal sector and working in textile sweatshops to drug trafficking, prostitution, indentured domestic labor and theft. Consequently, calls for human dignity are accompanied by perceptions that liberalization and liberalism are devoid of moral purpose and denigrate rather than enhance the individual and the community. European xenophobia and northern immigration restrictions do little to arrest these perceptions. The United Nations ranks Morocco a low 111th in human development, and this constrains the types of export industries it can attract and create.57 As one Moroccan economist notes, markets fail because illiterate Moroccans cannot address a letter and complete a postal transaction without recourse to assistance.
Finally, in regard to policy coalitions, USAID's governance and market initiatives are complicated by the "divide and rule" tactics of the state. Although decision making is characterized as consensual in keeping with the idea of shura, many adjustment policies were formulated without input from constituents. In fact, these policies were first introduced during a 1983 Parliamentary recess.58 But now, just as the state seeks social partners to enact institutional reform, the system of cooptation that drives "divide and rule" cannot bring them into a collaborative fold.
State attempts to draw in unions, organizations and political parties are met by divergent group opinions on issues of collaboration with the government The results are often either internal factionalism or a split between organizational leaderships and their rank and file. These dynamics are evident in the September 1996 breakup of the OADP political party, in a 1995 railroad-workers' strike, and in internal debates of party congresses on whether to participate in government alongside Interior Minister Driss Basri. Changes are visible in a new generation of elite, some from the Alawi clan, who are competent and critical of the older school of cooptation and corruption.59 Yet there is a widely shared perception that partial reforms benefit capital more than labor, the uncritical more than the critical, a corrupt state class more than the progressive forces within it and foreigners more than Moroccans. This is a fundamental problem.
NOT ENOUGH MARKET OR MARKET ORGANIZATION
Turning to the economic side of the liberal equation, reform in a number of areas suggests that the institutional politics of the Moroccan monarchy and its links to global markets have altered neoliberal designs and otherwise blocked liberalization. Rather than producing policy results anticipated by USAID, regime politics have produced too little market, incoherent reform and a high concentration of economic assets. Moreover, the late-development context has structured Morocco's linkages with Europe and has influenced the manner by which markets are being introduced. With the growth of corporate Morocco and the U.S. interest in promoting trade and foreign investment, bilateral donor agencies understate the necessity of market organization (not markets) and institutional variations of market capitalism in achieving socially desirable outcomes.
As stated at the outset, privatization is the crux of Morocco's economic transformation, but neither USAID nor the World Bank talks about it in these terms. A USAID policy priority, privatization or, more specifically, divestiture refers to the transfer of state assets from the public to the private sector. But, more important, it is a sociopolitical process by which royal courts become separate private entities divorced from bureaucracy and parliament.60 These two processes of privatization and their inherent conflicts intersect at divestiture policy, where a slim line separates the property of the state, the royal family and the sovereign. In lieu of elaborating on all aspects of this tension, a cursory examination highlights how the two affect USAID's assistance.
The political process of privatizing the monarchy, and determining what assets belonged where, produced the expansion of the royal family's financial holding company, Omnium Nord-African (ONA), and the restructuring of the state's export platform for the Royal Domains via the Atlas Fruit Board (AFB). Affiliated historically with the PARIBAS-Bollore financial group, ONA's post-1981 expansion may signal the beginning of economic separation between state and palace, and the shift to a regime interested in economic growth. However, ONA draws controversy. For its critics, privatization amounts to nothing more than the "personalization" of the public sector and monopolization of export opportunities by the royal family and its affiliated oligarchy to the detriment of organized labor. At a minimum, it can be said that a system of personal rule does not produce formal/legal policies and transparent procedures for dividing public and private property in the interest of equity.61 For example, ONA acquired firms and merged with others such as the Centrale Laitiere du Maroc (May 1982) and Onikral-Krystal (1992) through deals with the Societe Nationale d'Investissement(SNI). ONA faced few obstacles in acquiring Morocco's largest private bank, the Banque Commerciale du Maroc (BCM). And while the state liquidates its hotels, ONA is building new resorts in partnership with a state company, the Caisse de Depot et de Gestion.62
As for ONA's supporters, King Hassan's son-in-law and ONA's director, Fouad Filali, defends Morocco's largest industrial group by noting that it opened its capital to workers, entered foreign partnerships that "rationalize" the company, and encouraged the "association of the citizen in ONA's development.''63 Through its international division, OPTORG, the company has further integrated Morocco into the global economy. ONA now employs 23,500 people and produces 1.6 percent of total GDP. ONA opened 28 percent of its capital to the public, raising 1.5 billion DH on the Casablanca exchange. Along with WAFA, ONA lent credibility to divestiture and capital market reform by issuing stock. Advocates note that Royal shares in ONA fell from over 30 percent in the 1980s to 17 percent by 1994.
Despite capital concentration and a lack of state withdrawal,64 Morocco's parallel divestiture of 112 state enterprises is viewed positively by the World Bank and USAID. State divestiture of 15 companies and 9 hotels had netted a total of 5.19 billion DH ($600 million) at the end of 1994. Total capital on the stock exchange grew from 16.98 billion DH in 1992 to some 38.98 billion DH at the end of November 1994, while volumes increased for both shares and obligations. These positive assessments must be qualified in reference to stated policy goals and the Moroccan privatization context.
Among the goals of the Moroccan state and USAID were the broadening of economic stake holding and the encouragement of ownership by those outside the system. With other Palace-affiliated entrepreneurs, ONA executives announced their abstention from the formal divestiture program. However, the company later announced its interest in purchasing minority shares in mining companies.65 In the formal privatization of the SNI industrial portfolio, ONA assumed ownership via its subsidiaries, the BCM bank and the CAA insurance company, which purchased the majority of shares. Open-society guru George Soros purchased 2 percent of ONA's parent company and 15 percent of its Diwan Holding in pre-sale posturing,66 and his Quantum Fund appeared on the list of SNI shareholders. Despite the opportunity to create a new industrial group from a competing consortium, the SNI sale demonstrates the state's reluctance to allow other bases of economic power to emerge.
Contrary to USAID pronouncements, the privatization program is permeated by regime politics. Comparing divestiture outcomes to stated goals, the AID-supported program has had less success in broadening worker ownership and in regionalizing ownership. The formal program, moreover, diverts attention away from the more informal privatization of state lands to regime clients. Implementation has been slowed by bureaucratic infighting in 1995 between the privatization and finance ministers over the shift to a voucher-sales format Insiders and foreign investors lobby for special privileges or a maintenance of the status quo. The effort to privatize the CIH bank suffers from a legacy of corruption under former director Othmane Slimani, due to the fact that 60 percent of the bank's total loans went to seven people, among them Saudi investor and arms dealer Gaith Pharaon.67 As the CIHawaits a massive cleanup, the monarchy opted not to punish delinquent payers such as Alami's PLM-Dounia group, but instead granted interest-rate reductions on their prior loans!68 The sale of nine sugar-processing firms was sidelined by the flagging buying interest of undynamic sugar cooperatives. And the state has moved more slowly in selling 32 firms reporting negative net profits.
In light of regime politics and state financial constraints, the privatization process in Morocco has not been able to fully benefit from ideas on alternative market institutions, property-rights distributions, and market organizations that might encourage efficiency and participatory ownership by cooperatives, collectives, workers and managers. Rather, the state has mostly sold assets in distress to organized individuals who have long used the state for their personal benefit But, most important, King Hassan II has incompletely privatized the Palace and has yet to promote minority shareholder rights within ONA. If citizens participate in ONA's creation, it is unclear how ONA participates in the creation of the citizen.
The dual aspect of privatization and the rise of Omnium Nord-Africain (ONA) also challenges economic theories that stress the importance of stable property rights and USAID programs that attempt to streamline the legal obstacles to microenterprise development. As Nobel laureate Douglass North writes, the long march of economic history is down a path from systems of personal exchange to systems of impersonal exchange with third-party (state) enforcement. North cites the largely informal market of Sefrou, Morocco, as an example where non- standardized weights, unmarked prices and quality differentiations increase transaction costs to buyers, who must dicker and deal with market merchants in search of the most reputable.69 By contrast, ONA has introduced relatively contained, efficient and impersonal distribution chains to Morocco. The ultramodern, "cash and cany" Makro and Marjane supermarkets are internalized markets of scale which permit efficient exchange. Yet, it can be argued that the institutional context of the market is not any less personal, given its non-third-party royal ownership. What is most problematic is that the institutional framework for stable property rights necessary to improve the Sefrou market is missing. while royal privileges permit efficient market exchanges within the Makro and Marjane supermarkets. The bottom line is that a late-development, top down, introduction of the market is not taking place on an even playing field of property rights. This is akin to introducing a sovereign Sam Walton and Walmart to an underdeveloped domestic market Like Main Street U.SA., the shops of entrepreneurs whom USAID assists may disappear, despite ONA's pronouncements to the contrary. Makro and Marjane undermine consumer sovereignty and compromise liberal economic models emphasizing freedom of choice.
USAID support for reform programs has also met with political intransigence, as is evident in the cases of the financial sector and cereal marketing. In the case of financial reform, the state has been unwilling to relinquish control over financial intermediation. Through the 1980s, Morocco's system of financial repression channeled subsidized credit and exchange through specialized financial institutions (SFIs) to the public and private sectors. The system suffered from mismanagement and debt.70
The financial reforms have two components: banking reform and financial market development Prior to December 1992, the state mandated the international Cooke solvability ratio of 8 percent for undercapitalized commercial banks that had only a 4-5-percent reserve ratio. The banks went to the capital market, raising 2.5 billion DH in four years (1989-1992).71 ONA and its Societe Financiere Diwan Holding also raised 1.792 billion DH during a three-year period (1990-92) - "more than three times the amount of capital raised by the entirety of industry and commerce.''72 Among the banks, ONA's BCM raised the most domestic capital (1989-92). In essence, the financial holdings internalized and monopolized the market and distributed credit to their familial oligarchies. Holding companies, banks and credit-leasing firms issued over 90 percent of all new stock shares during the 1985-92 period, in comparison with just 10 percent for industrial and commercial firms.
Although the state lifted credit ceilings so that private credit accounted for 44.5-46.1 percent of all credit during the 1991-93 period, the expansion was reined in by Central Bank reserve requirements, lending ceilings and the monitoring of investment loans to repeat borrowers.73 Rather than liberalize interest rates, the Central Bank set interest-rate ceilings, hoping interbank competition would drive down the price of money. Instead, high reserve requirements, state-mandated obligations and bank collusion conspired to move rates close to the ceiling. Former finance minister Sagou criticized abnormally high interest rates and "surpluses in bank treasuries,"74 and the World Bank lamented a high 1-percent return on bank assets due to the absence of "competition on the asset side of the balance sheet."75 While a missing secondary monetary market restricts the competitive negotiation of bonds, corporations "seeking a short-term placement of treasury surpluses at market prices," must go to a secretive, bank-controlled "market of limited transactions in which the public is not informed of the interest rate, the volume, the date or the hour of the transaction."76 High treasury-bond yields, market opacity and nonreform have denied foreign and domestic firms access to low-cost capital.77 By 1995, a USAID financial-market project closed after receiving little collaboration from the Central Bank.
USAID's Cereal Marketing Reform Project also encountered the politics of "business as usual." Despite two agricultural sector adjustment loans (ASALs) and two sector-investment loans (ASILs), the cereals sector remains highly protected and controlled from the farm gate to the consumer. Although Morocco and the World Bank agreed to a 25 percent rate of nominal protection for cereals, 1994 rates exceeded these targets for soft wheat (71 percent), hard wheat (42 percent) and com (49 percent).78 The increase was largely due to an arbitrary application of a "safeguard clause" that allows prevailing reference prices to deviate from those derived from an "agreed upon, moving-average reference-price formula."79 While imported quantities of soft wheat are controlled by the National Cereals Office (ONICL), domestic purchase of wheat had been limited to state-licensed cooperatives (SCAMs and CMAs). The processing of national flour (farine nationale) is monopolized by larger industrial mills.
Because the state exhibits "zero-risk tolerance" for liberalization in sectors that support rural patronage and urban food security, grossly inefficient subsidy targeting continues to be tolerated.80 As the Cereals Marketing Reform project summarizes its experience,
This ranking of preferences (stability over efficiency) entails certain costs, which can be grouped into four broad categories: economic inefficiency, systematic discouragement of the development of market-based risk-reduction mechanisms; maintenance of a flawed subsidy program concurrent with lack of action on more sustainable public programs of food or income assistance; and lack of coherence in the direction of overall Government of Morocco economic policy, which supports an increased market orientation.81
In April 1996, Morocco liberalized domestic cereal marketing. but it is yet unclear whether legal changes will be effectively implemented. These cases feed certain conclusions.
KING HASSAN'S ADJUSTMENT?
World Bank economic adjustment implied that the Moroccan monarchy had to change not only the prevalent resource distribution and the mechanisms for resource allocation, but also the institutional and organizational framework linking state and society. Because of the historic nature of the makhzen, the logic of the regime (institutions tying state and society) was consistent with the state's central role in creating and disbursing privilege. However, King Hassan was constrained by crisis to enact institutional changes to avoid economic collapse, while mitigating the negative side effects that liberalization spelled for his authority. Moreover, the state elite opposed reforms in areas supported by USAID, with some being tabled and others not meeting initial expectations.
In Morocco, where USAID has a substantial history, the shortfalls appear less problematic from the point of view of mission strategy, the unworkability of administering complex interventions, or the cross-cutting inconsistencies in achieving specific objectives. Informational and technical constraints have been minimized in AID's efforts to improve policy-making capacity. Rather, many of the obstacles relate to the political power of the status quo.
The export of U.S. business and liberal ideas brought Dauy Queen, but not consumer sovereignty, since U.S. concerns for security and foreign investment outpace the concern for principled institutional reform. As a truncated, late-development model for Morocco, open society/open-market policies are misplaced vis a-vis Morocco's political regime and vis-à-vis U.S. foreign-policy goals, which discount institutional development Morocco's economic adjustment is blurred by the inequitable and privileged state control of the adjustment process, which denies popular, inclusive participation by the majority of Moroccan society. The dynamics of crisis have prompted a resurgence of Islamic ideals.
The implications of the analysis are clear. First, USAID has been a cost-effective vehicle for economic reform as a less-politicized bureau working at the ministerial level of the Moroccan monarchy. Although USAID influenced resource allocations, improved state functioning and provided SCJ Vices to the disenfranchised, it could not influence large shifts in resources (e.g., from irrigated to dryland agriculture). USAID has been less effective in persuading the state to dismantle its mechanisms of resource allocation and inefficient patronage.
The constructive implications of the analysis are also clear. USAID's mission would fit awkwardly into a unified State Department where diplomatic functions predominate (Helms proposal). What USAID sorely needs is distance and slack from the mandate of the U.S. State Department policy in order to deal with the obdurate characteristics of Moroccan politics. If State's Bureau of Democracy, Human Rights and Labor coordinates with USAID through the Democracy Working Group, then the relevant U.S. agencies must address the tension between the goals of security (stability) and institutionalizing change. Deep change within the state and the society will require more aid resources, not less. Again, the issue of stability versus change is complicated, in that the state is responsible for weakening institutions. One cannot assume, as Huntington did, that the army and security are harbingers of institutional development.82 As for the makhzen's design on stable democracy and civic culture, King Hassan's equation of "political and social consensus with the good society... is really the statement of a concealed preference for a system in which the dominant class has effectively translated its own values into a factual moral order binding on all."83 Not only does the security state translate poorly, its moral order is widely perceived as corrupt
If democracy legitimizes the beneficiaries of liberalization, and state security simply protects them, there may be few incentives for voluntary association and collective action (e.g., civil society). Apart from democracy, simultaneous inquiries must examine the relationship of Islamic community (umma) to recent theories of political obligation and to both markets and capital.84
Furthermore, privatization is a popular rallying cry, but in the context of patrimonialism, it is a ruse. Divestiture has generated resources for distribution to elites and to a narrow middle class, yet it stops short of unclogging the monarchy. ONA is but a step towards the economic privatization of the Royal Court, but inefficiencies remain, such as the watering of royal golf courses. More steps are required to make the Royal Palace more economically rational, less rent-seeking and more profit-driven than it has been in the past - while playing by the new rules it lays down.
USAID's role in promoting Morocco's domestic policy dialogue at the ministerial and associational mid-level is a notable achievement, a quiet revolution. Yet it will not advise the Royal Palace on how to avoid gumming up markets, managing representation and distributing inefficient patronage. There are reasons for state withdrawal to go as far as to privatize the Royal Palace to make the business of monarchy publicly open and privately contained, much as the state demands of private business. There are also reasons for the United States to go beyond security and foreign investment in championing a liberalism forged through a broader discourse with Moroccans as well as through collaboration with the competent pool of intellectuals within the Palace's new ''think tank." ONA's future chairmanship will test shareholder participation in a new economic system. Future financial-market reform will at least test the ability of the market to work. The question remains, to what extent the United States, given its regional politics and Moroccan ambivalence over the Gulf War, seeks to safeguard one last liberal principle--self determination -or at least to salvage it by fostering the sine qua non of all institutions: trust. USAID may cajole, but Morocco's future lies in the hands of its policy elites, who now run a gauntlet in meeting the future challenges established by the World Trade Organization and the E.U.'s Barcelona Accords.
1 Robert J. Barro, Getting It Right: Markets and Choices in a Free Society (MIT Press, 1996), p. 3.
2 The author thanks anonymous reviewers as well as Louis J. Cantori and Jim Werner for suggested corrections. Clark University professors George Billias, Theodore von Lane and Robert Hsu are also thanked.
3 The World Bank, "Kingdom of Morocco: Combined Project Completion Report for Industrial Trade and Policy Adjustment Loans I and II," (Washington: IBRD, May 1988).
4 See Michael Brzoska, "Military Trade, Aid, and Developing-Country Debt," in G. Lamb and V. Kallab eds. Military Expenditure and Economic Development, World Bank Discussion Papers no.185, Washington D.C. 1992, pp. 79-111; Mark A. Tessler and John P. Entelis, "Kingdom of Morocco," in D. Long and B. Reich eds., The Government and Politics of the Middle East and North Africa (Boulder: Westview Press, 1986), p. 390.
5 Remy Leveau, Le Fellah Maroccain: Defenseur du Trone (Paris: Presses de la Fondation Nationale des Sciences Politiques, 1977).
6 World Bank, 1982, pp. 4-5.
7 To its final report, the Joahri Commission appended a 1977 letter from then-Prime Minister Ahmed Osman imploring his ministers to check the growth of new public enterprises. See Kingdom of Morocco, Office of the Prime Minister, "Rapport General: Relation Etats - Entreprises Publiques," (Rabat, Morocco), December 1980, esp. Annex II.
8 Treasury payments to the enterprises (11.3 billion DH) represented IO percent of the budget deficit. Berrada's list of 33 firms (Between 22 percent and 100 percent state-owned with assets of 1.611 billion DH) reveals that no dividends were paid by major companies and monopolies in the transport, agricultural, energy and tourism sectors. Abdelkader Berrada, "Etat et Capital Prive au Maroc (1956-1980)," Ph.D. dissertation, Mohammed V University (Rabat, Morocco), November 1991, p. 76.
9 The civil service grew to 500,000, dominated by teachers (100,000) and security/army ranks (200,000)-up from a mere 50,000 at Independence in 1956. Food-subsidy costs rose from 760 million DH per year on average between 1976 and 1980 to nearly double during the 1981-85 period (2 percent of GDP).
10 Brendan Horton, Morocco: Analysis and Reform of Economic Policy (Washington: IBRD, 1990), p. 118.
11 See Simon Schwartzman, "Back to Weber: Corporatism and Patrimonialism in the Seventies," in J. Malloy ed., Authoritarianism and Corporatism in Latin America (Pittsburgh: University of Pittsburgh Press, 1977), p. 98. Sec Abdelhaye Moudden, Malthusian Development and Political Weakness of Morocco's Industrial Bourgeoisie, Ph.D. dissertation, University of Michigan, 1988.
12 Waterbury states: "Only under some regimes are [elements of corruption] the ingredients of regime survival and an essential source of its cohesion." John Waterbury, "Endemic and Planned Corruption in a Monarchical Regime," in A. Heidenheimer, et al. eds., Political Corruption: A Handbook (New Brunswick: Transaction Publishers, 1989), p.355.
13 Remy Leveau writes, "No Moroccan entrepreneur has been able to occupy an important place in the private sector without the personal consent of the sovereign." See Remy Leveau, Le Sabre et le Turban, (Paris: Francois Bourin, 1993), p. 72.
14 Zakya Daoud, "Privatisations a la marocaine," Maghreb-Mashrek (April-June 1990) pp. 84-10 I.
15 See Paul Hutchcroft, "Selective Squander: The Politics of Preferential Credit Allocation in the Philippines,'' in S. Haggard, C. Lee and S. Maxfield eds., The Politics of Finance in Developing Countries (Ithaca: Cornell University Press, 1993), pp. 165- 198. In Morocco, this is a historic pattern. The Royal Court (mechouar) stood separately from the khassa (elites) who served as the mechouar's outward face and vice-versa Sec Abdellah Laraoui, Les origines sociales et culturelles du nationalisme marocaine (Casablanca: Centre Cultural Arabe, 1993) pp. 71-125.
16 Estimates of royal wealth arc imprecise, yet 20 percent is often cited. Sec Howard LaFranchi, "Europe Slow to Invest in North Africa," Christian Science Monitor (Jan. 27,1993), pp. 10.-11.
17 The makhzen exhibited four traits: (a) "an authority of superposition invoking the divine right for the purpose of imposing relations of allegiance on territorial communities and independent religious groups," (b) the conversion of allegiance to submission as military and bureaucratic powers expand, (c) revenue-extraction and arbitration of property right disputes, and (d) a state power which "hinder(s) [sic] an accumulation of wealth" with which autonomous centers of power could threaten the "sovereign's eminent right" (Raqaba). Sec Alain Claisse, "Le Makhzen Aujourd'hui," Le Maroc Actuel (Paris: CNRS, 1992), p. 286.
18 World Bank structural-adjustment policies advocate a prior orthodox, macroeconomic stabilization of current accounts and fiscal deficits via devaluation, subsidy cuts and austerity budgets. After cuts in government consumption, structural reforms follow, with emphases on export promotion, market forces, private-sector investment, and policies that reduce economic intervention by the state (privatization and liberalization). See Nicolas van de Walle, "Review Essay: Adjustment Alternatives and Alternatives to Adjustment," African Studies Review vol. 37, no. 3 (1994), pp. 103-179.
19 Economic assistance levels fell from $103.3 million in 1990 to only $38.5 million in 1995, with projections of $27.8 million for both 1996 and 1997. Sec USAID, "USAID/Morocco Country Program Strategy, 1995-2000," p. 35.
20 King Hassan received Shah Reza Pahlavi in exile and attacked the Islamic revolutionaries in Iran and Moroccan sympathizers at home. Sec also Anthony Sampson, The Money Lenders: Bankers and a World of Turmoil(New York: Viking, 1981).
21 Morocco's close relationship with Citicorp was akin to the personal relationship between the royal holding company, Omnium Nord-Africain (ONA) and PARIBAS (Banque de Paris et du Pays-Bas). The King's son-in-law, Fouad Filali, received his training at Citicorp in New York before heading ONA in the mid- 1980s.
22 Africa Research Bulletin, Morocco: Debt Rescheduling Talks (December 15, 1983-January 14, 1984), p. 7113.
23 This was not the beginning of Israeli-Moroccan relations. King Hassan met with Yitzhak Rabin, who came to Morocco incognito in the late 1970s.
24 Congressional Budget Presentation, 1996 Morocco, p. 318.
25 USAID, NUSAID/Morocco Country Program Strategy 1995-2000," pp. 11-12.
26 USAID, "Country Development Strategy Statement, FY 1985 Morocco," (January 1983), p. 16.
27 USAID, "Country Development Strategy, FY1988," p. 4.
28 USAID, "Country Development Strategy, FY 1985 Morocco," p. 15.
29 Congressional Budget Presentation: Fiscal Year 1987, p. 213. Annual Budget Submission, FY 1992, Morocco, p. 131.
30 Congressional Budget Presentation, Fiscal Year 1985, p.105.
31 As of September 1995, Morocco had received $450 million in various loans, of which $447 million have been utilized, $229 million repaid, and $199 million outstanding with interest collections of $319 million. See U.S. Department of State, "Status of Loans by Country as of September 30, 1995," p. 542.
32 See USAID, "Country Development Strategy Statement, Morocco, Fiscal Year 1986" (January 1984), p. 21.
33 Africa Research Bulletin, "Morocco: Meeting with Creditors," December 15, 1984 - January 14, 1985, p. 7559.
34 On an explanation of this paradox of orthodoxy sec Miles Kahler, "Orthodoxy and its Alternatives" in J. Nelson ed. Economic Crisis and Policy Choice (Princeton: Princeton University, 1990), pp. 33-61. Karl Polanyi, The Great Transformation (Boston: Beacon Press, 1957).
35 See Peter Evans, Embedded Autonomy: States and Industrial Transformation (Princeton: Princeton University Press, 1995).
36 Among the projects are the Economic Policy Analysis Support project (1985-92, $8.2 million), the 1989 Price Deregulation program ($20 million), the Planning, Economics and Statistics for Agriculture ($12.3 million, 1983-93), the Cereals Marketing Reform project and the Training for Development project ($21.5 million). Sec Congressional Presentation, Fiscal Year 1991.
37 Congressional Budget Presentation, Fiscal Year 1986, p. 115.
38 These USAID projects include the Private Sector and Export Promotion project ($36 million, 1986-88), the Agribusiness Promotion project (1991-98, $18.3 million), the New Enterprise Development project (1991-97, $14 million), and the MicroEnterprise Development project ( 1993-98, $14 million).
39 Congressional Budget Presentation, Fiscal Year 1990, p. 179.
40 USAID, "Country Development Strategy Statement, Fiscal Year 1988," p. 1.
41 The USAID projects include the Population and Family Planning Support projects (1-111) (1970-91, $38.5 million), the Population and Child Survival project (IV}(1989-96, $21.3 million), and the Family Planning/Maternal Child Health project (V) (1993-99, $8 million).
42 USAID, "Action Plan: 1991," p. 21.
43 International Monetary Fund, International Financial Statistics Yearbook 1995; I.M.F., Resilience and Growth through Structural Adjustment: The Moroccan Experience (Washington: IMF, 1995), pp. 4, 5, 19.
44 In 1989, USAID commented on strained IMF Morocco relations as IMF conditionality specified a budget deficit of only 4.5 percent of GDP, in part to boost public investment from 3.1 percent in 1989 to 3.7 percent in 1993.
45 Department of Defense, "Foreign Military Sales, Foreign Military Construction Sales and Military Assistance Facts as of September 30, 1994," Washington D.C.), pp. 32-33.
46 Net foreign assets climbed from 453 million DH at the end of 1989 to some 14,836 million DH at the end of 1990 and total international liquidity rose from $488 million to $2,066 million in the same period!
47 See "Economic Freedom: Of Liberty and Prosperity," The Economist vol. 338, no. 7948 (January 13, 1996), 21-23.
48 For in-depth discussions of civil society, sec Michael Bratton, "Beyond the State: Civil Society and Associational Life in Africa," World Politics 41, no. 3 (April 1989) 407-430; Adam Seligman, The Idea o/Civil Society (New York: The Free Press, 1992).
49 Robert H. Jackson and Carl G. Rosberg,: Personal Rule in Black Africa (Berkeley University of California Press, 1982), p. 40.
50 Ibid., 40.
51 Susan E. Waltz, Human Rights and Reform: Changing the Face of North African Politics (Berkeley: University of California Press, 1995).
52 Peter Ekeh, "Historical and Cross-Cultural Contexts of Civil Society in Africa," in USAID, "Civil Society, Democracy and Development in Africa," workshop proceedings, Washington D.C. (June 9-10, 1994), pp. A21-A45, citing Reinhard Bendix, John Bendix and Norman Furniss, "Reflections on Modern Western States and Civil Societies," in R. Braugard ed. Research in Political Sociology, vol.3 (Greenwich Conn.: JAI Press, 1987).
53 The presidents of these associations include Bou Regreg (June, 1986) Mohammed Aouad, King Hassan's counsel; Mohammed Ben Aissa, Morocco's ambassador to the United States; Grand Atlas (Marrakesh), Mohamed Mediouri, King Hassan's chamberlain; Angad al-Maghrib al-Sharqi, Ahmed Osman, King Hassan's former brother-in-law, Casablanca Carriere Centrale, Haj Belyout Bouchentouf, Princess Asma's Father-in-Law.
54 See Dale F. Eickelman, "Reimagining Religion and Politics: Moroccan Elections in the 1990s," pp. 253-273; I. William Zartman, "The Challenge of Democratic Alternatives in the Maghrib," pp. 201- 218 in J. Ruedy ed., Islamism and Secularism in North Africa (New York: St. Martin's Press, 1994).
55 See Susan Waltz, op.cit. pp. 114-115.
56 Mohamed Mekouar, the former director of Royal Air Maroc was not punished for embezzling some 1 billion DH (approximately $111 million; 5 US=9DH), much as former Finance minister Rheghaye was not severely punished for sums taken from the public purse during his tenure in office during the 1970s. The Mekouar case is mentioned in Beatrice Hibou, "Les enjeux de l'ouverture au Maroc," unpublished working paper, no. IS (April 1996), Fondation nationale des sciences politiques (Paris. France).
57 Liberation no. 1912 (June 1994), p. 1.
58 Berrada writes: "The State, failing to succeed in negotiating a comprehensive social compromise able to create a climate of confidence favorable for the recovery of business, limits itself to concluding agreements with 'active forces' (of interest (zaouias] groups) often in disarray, in search of new budgetary policy measures, quarrels among clans and conflicts of competence without end." See Abdelkadcr Berrada, "L'Etat et l'enjeu budgetaire au maroc," Annales Maroccaines d'Economie no. 10 (1994), p. 37.
59 See Prince Hisham Ben Abdallah cl Alaoui, "La monarchie marocaine tentee par la reforme," le Monde Diplomatique (September 1996), p. 6.
60 See Jurgen Habcrmas, The Structural Transformation of the Public Sphere (Cambridge Mass.: MIT Press, 1990) pp. 11-12; Chalmers Johnson, MITI and the Japanese Miracle (Stanford: Stanford University, 1982) esp. ch. 2, pp. 35-82.
61 For histories of ONA and its PARIBAS roots, see M'hamed Sagou, PARIBAS: Anatomie d'une puissance (Paris: Presse de la FNSP, 1981); Mohamed Said Saadi, Les groupes financiers au Maroc (Rabat: Editions OKAD, 1989); Zakya Daoud, "Privatisations a la marocainc," MaghrebMashrek (April-June, 1990), pp. 84-10 I; Michel Laurent, le Maroc de l'Espoir (Rabat: Editions La Porte, 1994), esp. pp. 282-315.
62 With golf courses and seaside villas, these luxury resorts include the large Caho-Negro resort, the Marrakesh Amclki resort and a proposed 600-hectare resort with two golf courses on the Dahomey beach between Casablanca and Rabat. The Caisse de Dept ct de Gcstion (CDG) and ONA each provide 50 percent of the financing with management handled by ONA. Sec Michel Laurent, op.cit, pp. 282-301.
63 "L'Association du citoyen au developpement de l'ONA," Le Matin (May 10, 1994), p.3.
64 Since there is no state independent of King Hassan, and assets are being transferred to him, the case for state withdrawal is not yet evident by a nominal divestiture.
65 These state mining companies arc: CTI, Somifer, Samine, Saeem, SMI, FPZ, of which the state is the majority shareholder (at 69 percent) only in the SMI. Because minority shareholding is precarious, potential buyers were believed to be minimal. ONA's stated mining interest is viewed favorably by Privatization Minister Sa'adi, who foresaw sales by year's end. Sec Jamal Bcrraoui. "Les futures privatisables, une a une," La Tribune du Maroc (June 30, 1994), p. 14.
66 "Al-Billionaire Soros yastathmir fi sharika 'Diwan' al-Maghribiya," no.5602 (March 31, 1994), p. 11.
67 Pharaon was also implicated in a deal to take over the BCM bank much as he took over the National Bank of Georgia in the United States. See Asharq Al-Awsat, no.5520 (January 8, 1994), p. 11.
68 Le Matin du Sahara, "C.I.H.: Volonte de renforcer le role joue dans le secteur bancaire," (January 5, 1994), p.5; Asharq al-Awsat, no.6420 (June 26, 1996), p. 9.
69 See Douglass North, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990), p. 123; Clifford Geertz. "Suq: The Bazaar Economy" in Sefrou in C. Geertz, H. Geertz and L. Rosen ed. Meaning and Order in Moroccan Society (Cambridge University Press, 1979).
70 King Hassan's investment monitoring committee (CISI) revealed in 1994 that 80 percent of all investment projects went uncompleted in Morocco. Le Matin du Sahara, "Institution d'un Comite d'impulsion et de suivi des investissements," no.8394 (January 11, 1994), p. 3.
71 Of the firms listed on the stock exchange, the banks had previously occupied an important place, with the BCM (1943), UNIBAN (1969), the BMCI (1972), the BMCE (1975) and the COM (1976) and WAFA (ex-CMCB)( 1980). Berrada, 1991, fn. 310, p.462.
72 Rachid Belkahia, "Les Entreprises et la Bourse," Ph.D. dissertation, January 1994, (Mohammed V University, Casablanca), p. 241.
73 IMF, Resilience through Growth, p. 23.
74 Jugement severe sur la concurrence bancaire," L'Economiste (May 19, 1994), p. 36.
75 World Bank, The Kingdom of Morocco: Sustained Growth for the Nineties (1989), p. 7.
76 Alain Demaynadier, "Un marche financier..." op.cit. (July 22, 1993) p. 48.
77 Abderrahim EI-Badaoui, "A Bon Desencadreur, Salut!" Le Liberale, November 15, 1993, no. 69, p. 24.
78 See David Wilcock and Lynn Salinger, "Moroccan Cereals Policy Reform at the Crossroads," CMR Project Report #20, U.S. Agency for International Development (September 1994), p. 28.
79 Ibid., p. 26.
80 Ibid., p. 43.
81 Ibid., p. xiii.
82 Samuel Huntington, Political Order in Changing Societies (New Haven: Yale University Press, 1968).
83 Frank Parkin. Class Inequality and Political Order: Social Stratification in Capitalist and Socialist Societies (New York: Praeger, 1971 ), pp. 84-85.
84 Many are working on these issues from liberal and Islamic perspectives. See M. Umer Chapra, Islam and the Economic Challenge (Herndon, VA: The Islamic Foundation/The International Institute of Islamic Thought, 1992); Deborah Stone, Policy Paradox and Political Reason (New York: Harper Collins, 1988); John Horton, Political Obligation (Atlantic Highlands, N.J.: Humanities Press International, 1992); Barry Bluestone and Bennett Harrison, The Deindustrialization of America. Plant Closings. Community Abandonment and the Dismantling of Basic Industry (New York: Basic Books, 1982).