ASILAH (Morocco) The man raised the hood of his djellabah against the Atlantic breeze. As the sun crept over the ramparts, he reached for his brush and began to paint a dramatic swirl of colour on to the whitewashed medina wall. Passers-by stopped to watch, offering to hold his ladder.

He wasn't a Moroccan graffiti aritist, but one of many artists that flock to the white-cubed town of Asilah for its annual festival, the International Cultural Moussem.

Held every August, it draws an eclectic crowd with everyone from Sufi chanters to Japanese artists, along with thousands of spectators and a gaggle of economists, politicians and academics for satellite events - testament to the festival's socio-economic impact. As well as public art demonstrations, exhibitions and concerts, with a heavy Islamic and Spanish influence, it ends with a three-day horse festival, including a musket-firing cavalry charge.

Straddling the cliffs of Morocco's north Atlantic coast, Asilah was founded by the Phoenicians around 1500 BC. A prosperous trading town, it was invaded by the Carthaginians, Romans, Normans and Portuguese, among others; and it was Spanish territory before being returned to Morocco in 1956.

Its medina is bite-sized and impossibly picturesque. I strolled around the spotlessly clean warren of alleyways, where the brilliant-white buildings are punctuated with blue paintwork that matches the vibrancy of the sky. Through a half-open doorway I caught a glimpse of an electric-blue courtyard picked out by a shaft of sunlight. It was almost impossible to believe that, like neighbouring Tangier, Asilah had spent decades in a seemingly inexorable decline.

Its renaissance began in 1978, when two local friends, Mohammed Benaissa and Mohammed Melehi planned the first moussem under the banner Culture and Art for Development, inviting 11 artists from around the world to literally paint the town.

The local residents pitched in to scrub and whitewash the whole town in preparation for the event, and children were assigned to help the artists. Morocco's Ministry of Culture restored a section of the crumbling ramparts, and the Raissouli Palace (rue Ahmed el Monsour), a former pirate's home, was transformed into an opulent palace of culture.

When I met Benaissa - former minister of foreign affairs and Asilah's mayor since 1983 - he described the town in the 1970s “There was nothing no telephones, electricity was very poor, there was drinking water for just one hour a day. Living conditions were terrible sewage ran in the streets, garbage was everywhere.”

Every year, more and more artists came, leaving brightly-coloured murals on the whitewashed walls. The success of the festival engendered a sense of civic pride and bit by bit the infrastructure was improved, houses were renovated and historical buildings were restored. Teams of children competed to clean the beaches, adults to maintain their neighbourhoods.

Thirty years on, Benaissa's belief that art and culture can be used as a catalyst for change is unwavering “Look at what it has done. With art you cannot end poverty, but you can bring about the end of misery.”

When the moussem ends and the visitors return to Fez, Casablanca and Marrakech, and the artists to Paris, New York and Tokyo, Asilah returns to its tranquil self. But the art remains, and it is everywhere. Murals - replenished every year - adorn the buildings, enveloping windows and curling around drain pipes. Many of the children who helped at the first moussem are now artists and a new and enterprising generation is cashing in on the art boom, selling their naive crayon drawings from doorways. Workshops abound and the contemporary Gallery Aplanos (rue Tijara 89) wouldn't look out of place in London or New York.

Its medina may lack Marrakech's tangle of souks and panoply of shops, but it's also endearingly free from the hassle and hustle of other Moroccan cities. There was a fine selection of carpets on offer at Bazar Atlas (rue Tijara 25). Cream handiras, or wedding blankets, silver sequins glittering in the sun; shaggy Beni Ouarain, with their bold geometric markings, and vivid, tightly-woven kilims from the High Atlas hung outside. Inside, there was a dizzying array of babouches - pointed, rounded, sparkling and furry slippers - and tagines of every size and colour jostling for space.

Outside the medina, the call of the muezzin mingled with the strains of the Spice Girls. Villagers from the Rif Mountains -- their distinctive straw hats decorated with gaudy pom-poms -- led donkeys laden with bulging sacks through the traffic, trading gigantic yellow melons from makeshift stalls on the street.

I wandered through the covered market, past mounds of pungent saffron, succulent olives and plump figs bursting with ripeness; enveloped in the aroma of freshly-baked bread, the tang of mint and the sweet smell of dates.

Hungry, I made my way to the seafront and Casa Pepe (22 place Zallaka), where waiters squeezed between the heaving tables. A djellabah-clad fisherman appeared in the restaurant doorway. He pulled two enormous lobsters from his steel bucket, their claws tied together with string. Lunch had arrived for a gregarious Spanish family.

After dining on freshly caught sardines, I took a taxi to Paradise Beach a few miles out of town. When the tarmac ended we bumped along the rocky road, then over dunes and shrubs, passing more traditional taxis - donkey-drawn wooden carts with passengers hanging precariously off the side. Finally, we turned down the winding path to the beach. Before us, the sweeping bay glimmered in the heat haze miles of honey-coloured sand pounded by Atlantic rollers.

Beyond the row of ramshackle cafes, football matches were underway. Children played under parasols and women sunbathed in everything from bikinis to burkas. Grumbling camels plodded up and down the surf with their tourist cargo, while boys galloped bareback between the beach towels on scrawny mules.

Asilah's rehabilitation continues under Benaissa's watchful eye. When I remarked that the festival has fulfilled its objectives, he demured “Let us say it is fulfilling its objectives because there is no end to improvement.”

Apartments are springing up along the neglected coastline eastwards to Tangier. Boutiques are sure to follow. But Benaissa has allowed only limited development within the medina's ancient walls, determined that it won't lose its spirit, or become another Marrakech.—Dawn/The Guardian News Service