UPDATE 2-Ruler of cash-strapped Morocco plans Gulf Arab tour

* King had kept his distance from Gulf

* Euro crisis has hit Morocco hard

(Pvs KUWAIT; Adds quote, details, background, bylines)

By Sylvia Westall and Souhail Karam

KUWAIT/RABAT, Oct 11 (Reuters) - Morocco's King Mohammed isto make a rare official tour of Gulf Arab countries later thisyear as his cash-strapped government seeks alternatives to itscrisis-hit European trade partners.

Kuwait's Foreign Ministry Undersecretary Khaled al-Jarallahtold Reuters the monarch would discuss investment and bilateralrelations. "He is going on a tour in the Gulf countries," saidJarallah, noting that the king was expected to visit Kuwait inOctober or November.

The monarch will also travel to Saudi Arabia, the UnitedArab Emirates, Kuwait, Bahrain, Qatar and Oman, Jarallah said.

A Saudi official who declined to be named under briefingrules told Reuters King Mohammed planned to visit Saudi Arabiaafter the haj, the Muslim pilgrimage to Mecca which is expectedto run from from Oct. 24 to 29 this year.

A spokesman for the Moroccan king's cabinet declined tocomment.

A tour of fellow Gulf monarchies by King Mohammed would beimportant diplomatically and financially for Morocco, which isruled by the Arab world's longest-serving dynasty but lacks theoil riches of the younger Gulf monarchies.

Since his enthronement in 1999, King Mohammed has kept hisdistance from Gulf Arab monarchies, with far fewer officialvisits than under his late father King Hassan. Some of theGulf's most influential rulers, including Saudi King Abdullah,regularly visit Morocco but mostly for medical or other privatereasons.

EURO CRISIS

Morocco's $90-billion economy is heavily exposed to the eurozone, whose troubles have hit tourism revenues, migrantremittances and foreign investment this year.

The king urged his government in July to tap financing fromGulf sovereign wealth funds in what was widely seen as aninstruction to give Gulf investors more access to investmentopportunities traditionally dominated by European and localfirms.

An invitation last year for Arab kingdoms Morocco and Jordanto join the Gulf Cooperation Council (GCC) signalled thatmonarchies in the region were trying to strengthen links in theface of the "Arab Spring" uprisings.

Morocco largely escaped last year's Arab Spring unrest butit has little cash to improve living standards amid heavydomestic pressure for jobs and measures to cut poverty.

"It will be a roadshow ... an opportunity to market freshinvestment opportunities Moroccan has to offer," said anofficial Moroccan source.

Rabat hopes Gulf institutional investors will buy heavilyinto a $1-billion-plus sovereign bond later this year. KingMohammed is also expected to meet firms interested in theplanned sale by Vivendi of its majority stake in MarocTelecom .

Morocco is drafting a new banking law that should open thedoor to Islamic lenders. Rabat may also discuss partnershipsbetween its state-run airline Royal Air Maroc and a major Gulfairline, after low-cost carriers have reduced their business inMorocco due to lower European demand.

Rabat wants billions of dollars to fund ambitious solar andwind energy development plans as well as resort developments.

(Reporting by Sylvia Westall and Asma Alsharif in Cairo andSouhail Karam in Rabat; Editing by Andrew Roche)

(([e-mail])([phone])(ReutersMessaging: [e-mail]))

Keywords: MOROCCO GULF/KUWAIT