Djibouti: East Africa’s Bridgehead in the Middle East and Asia
Located at the tip of the Horn of Africa, Djibouti has gained renewed political stability and taken up a key geostrategic role in the fight against international terrorism. H.E. Mohamed Goumaneh Guirreh, the Ambassador of Djibouti to France, speaks of his country’s desire to become a leading trade hub in Eastern Africa and its involvement in efforts to enhance regional stability.
The Diplomatic Letter: Mr. Ambassador, ten years after the launching of the drive to democratize your country, Djibouti is now endowed with a multiparty political system. The ruling party won a strong majority in the January 2003 legislative elections. Do you think the voting system ought to be changed to ensure all political parties are fairly represented in the Djiboutian parliament? Have the country’s Afar and Issa communities been fully reconciled?
H.E. Mohamed Goumaneh Guirreh: Yes, the various components of the Djiboutian population have struck a lasting peace. This is borne out by the fact that there is no longer an uprising in our country. Djibouti has emerged as a land of stability in the Horn of Africa, and now plays an important role as a regional mediator. We are, all the same, planning to overhaul the electoral lists before the 2005 presidential election.
T.D.L.: The Poverty Reduction and Growth Facility (PRGF) program, approved in October 1999 by the IMF, calls for implementing deep-reaching structural reforms. Could you describe the headway made with these reforms for our readers? With between 40 and 75% of your country’s people living below the poverty threshold, have specific measures been launched to turn this situation around? What is the Djiboutian government doing to improve its image, especially as concerns respect for human rights, the role of women in Djiboutian society, and the situation of the illegal refugees recently expelled from your country?
H.E.M.G.G.: Between 1996 and 1999 the government complied with a “standby” agreement concluded through the Bretton Woods accords. This agreement was followed by a second accord, called the Poverty Reduction and Growth Facility (PRGF) program, which ran from 1999 to 2002. These two accords helped put the Djiboutian economy back on solid ground. We have made deep-reaching structural reforms, thanks to the Djiboutian people’s willingness to make wide concessions in order to overcome this severe financial crisis.
There remains, however, a great deal to be done in order to lick our country’s weak economic growth and persistent poverty. We are working hard to shore up the advances made to date, and to move forward to build a third-millennium economy centered around the port in Doraleh and the free zone.
With regard to the Poverty Reduction and Growth Facility program, the Djiboutian economy has made real headway.
Estimated GDP growth for 2001 was 1.9%, but the real figure was even higher. Inflation has been curbed, and was held under 1.8% in 2001. The trade deficit was brought down to 30.7% of GDP (35.5% in 2000).
The key factors were brought back into balance, thus minimizing the anticipated worsening of the 2002 budgetary balance (-7.5 billion Djiboutian francs), brought on by the launching of a major public investment program and a rise in imports by foreign military contingents, among others.
Now that it has reestablished a certain degree of macroeconomic stability, the Republic of Djibouti is investing in becoming a regional trade hub and a redistribution center similar to the port of Dubai, which serves as our model. Our country has several assets that will help it meet this objective:
– a port equipped with modern facilities,
– an investment code that offers major tax breaks,
– the construction of a new port (Doraleh) that draws over 20 meters of water and can handle the world’s biggest ships,
– an expansion of the existing dry dock to meet the increase in traffic,
– an extremely modern telecommunications network, including an underwater cable that links Asia to Africa and to Western Europe,
– a reliable financial market: no exchange control or limits on capital redistribution or transfers, banks accounts that can be opened in any currency.
The high point of the economic reforms designed to fight poverty is clearly the concession contract for the port of Djibouti, which was won by the Dubai Port Authority, a UAE group. The government has launched drastic reforms aimed at opening up and privatizing the economy. Awarding the concession contract for the port to a private group is a good example of this.
Both the airport and the free zone will be managed by private groups as well. Dubai has been chosen for all three of these publicly-held companies.
The emirate was chosen because of its wide experience with managing public companies. And more importantly, it will benefit from outsourcing, as there are some 2,200 international distribution firms in Dubai.
We are winning the battle for equality between men and women, which has been guaranteed by our constitution since Djibouti claimed independence in 1977. The Republic of Djibouti has just drawn up a national strategy for including women directly in the country’s development, which should make their efforts to spur national development all the more visible.
The rights of Djiboutian women have been weighed down by social factors and traditions for long years, and hence neglected. Promoting women’s rights has become a top concern for President Ismail Omar Guelleh. On 10 July 2003, for the first time in the country’s political history, seven women were elected to serve as deputies.
On 26 July 2003, the government publicly announced its decision resolving the problem of illegal immigration. Various administrative and security measures have been taken in cooperation with the UNHCR and the National Office for Assistance to Refugees and Disasters (ONARS), as well as with the diplomatic representatives of neighboring countries. This organizational work has led to wide-scale voluntary repatriations and reunions of asylum seekers and refugees in Aouraoussa. This process is designed to turn around the problems in Djibouti, and deserves all the more credit in that it focuses on respect for human rights as well as maintaining order and security.
T.D.L.: Your country hopes to take advantage of its key geographic location to become a major player in the trade between Africa and Asia. With Dubai’s clinching of the concession contract to manage the international port of Djibouti and the start of construction on a new port in Doraleh, is your country hoping to become the United Arab Emirates’ bridge to Africa?
H.E.M.G.G.: World events have heightened our country's geostrategic role. Djibouti is bent on becoming a key player in the trade between Africa and Asia. As the transit trade turns away from Ethiopia, our country’s political and macroeconomic stability have enabled it to take advantage of transshipments initially bound for the port of Aden.
Transhipments through Djibouti rose 69% between February 2002 and February 2003. What’s more, aircraft traffic also grew 117% in the space of one year.
The management of the port has been turned over to Dubai, as big international firms are now using this Arab port as the back base for their operations in East Africa and neighboring regions. Over 2,000 international companies are doing business from its free zone, using it to send out their merchandise and equipment to adjacent regions in Asia as well as Africa.
By turning over the management of its infrastructure to the economic authorities that run the emirate’s port, the Djiboutian government has clearly indicated the direction in which it intends to move. It is now making investments in both its container handling capacity and the handling and storage of bulk merchandise. The management of the Ambouli Airport was turned over to the Dubai Airport Authority in 2002, with the thought that a new airport would be built in the coming years. A few months later, the free zone was entrusted to the same authorities. These concessions were granted with the aim of drawing in some of the thousands of firms already working in Dubai that are looking to break into the African market. It is a subcontract, of sorts, with the port of Djibouti, Ethiopia, and Somalia, with all of East Africa as its hinterland.
T.D.L.: As COMESA’s natural outlet to the Indian Ocean, what is your country doing to strengthen this regional cooperation space? Are you gearing up for the implementation of the regional competition law COMESA is poised to enact?
H.E.M.G.G.: Let me start by recalling that COMESA is a common market created to bring together the countries of Eastern and Southern Africa. It has 22 member countries, including the Republic of Djibouti. Economic integration with COMESA would require us to align our tax system with those of our partners. In late December 2002, this process should lead to the implementation of a VAT that will eventually replace the consumption tax. This will also safeguard our resources through the application of a common external rate, and also standardize customs tariffs in countries that join the accord. In like manner, regional integration, through COMESA membership, has made us part of a dynamic common market with 22 member countries and over 400 million potential consumers. This move requires the implementation of standards that will have a positive impact on our economy.
The Republic of Djibouti is determined to help strengthen COMESA by creating the conditions necessary for building real integration among member States. Djibouti’s goal is to find an outlet that will enable it to develop its service economy. Another of its goals is to spur growth and to help other COMESA member countries achieve their full potential.
The Republic of Djibouti has also asked that the COMESA court of justice be housed in our country. Djibouti and three other countries (Kenya, Malawi and Sudan) have put in bids. At the last summit, a commission was created to ensure the candidate countries met the preset criteria. The commission’s members determined that all the candidate countries did indeed meet the selection criteria.
In our opinion, however, Djibouti has an added advantage: it is the geographic center of the COMESA countries. What’s more, it is a bridge between the countries of the Middle East and Africa. Djibouti is thus in an excellent position to house the court of justice.
In view of the implementation of the competition law, the following measures are being taken: the creation of a compensation and cooperation fund, with the primary goal of compensating revenue losses in countries that will be involved in COMESA development projects; economic integration, which will mean tearing down trade barriers, free trade and the free circulation of both goods and peoples. We will obviously lose certain advantages, but they will be offset by the fund set up just recently.
T.D.L.: Given Djibouti’s involvement in the adoption of the Arta Peace Accords, is your country’s withdrawal from the IGAD Technical Committee a sign it has rejected the Somalia Peace Process? Somaliland held its own presidential elections on 14 April 2003. Is the recent visit by a Somaliland delegation a sign that Djibouti has recognized this self-declared republic and accepted that the division of Somalia is irreversible?
H.E.M.G.G.: The Republic of Djibouti withdrew from the IGAD Technical Committee in charge of the Somalia Reconciliation Conference in Nairobi.
This decision was sparked by the IGAD Technical Committee’s failure to help the Somalis resolve their differences.
The Technical Committee was comprised of Djibouti, Ethiopia and Kenya. At the IGAD Ministerial Conference held in January 2002 in Khartoum, Sudan, the committee was mandated to facilitate the discussions between Somalis by creating a climate that encouraged dialogue and reconciliation with the aim of forming a government with a wider base.
In our opinion, the Technical Committee, and its chairman in particular, quickly took on the role of negotiator. This body was hence no longer a neutral entity.
The process veered even further from its initial objectives when Kenyan envoy Mr. Kiplagat, who is running the inter-Somali talks, disbanded the Advisory Committee. This body was made up of neutral Somali figures like Abdirazak Haji Hussein, Abdilkader Aden and Mohamed Sheikh, and was doing outstanding work that won praise from the Technical Committee as well as the international community.
Somali intellectuals ready to donate their time and energy to ensure the success of this process were also pushed aside.
An Arbitration Committee comprised of leading Somali thinkers was charged with helping resolve these problems, but its conclusions were also ignored. Appeals from the Republic of Djibouti and foreign actors concerned by events in Somalia fell on deaf ears. We hence decided to withdraw from the IGAD Technical Committee.
As concerns the visit to Djibouti by a Somaliland delegation on Thursday 25 September 2003, this trip was part of our efforts to build friendly ties and strengthen bilateral cooperation. The many points discussed during this visit included the situation on the borders of both countries, notably the Djibouti Republic’s program to expel people who entered the country illegally.
T.D.L.: As the host country for the three-way meetings of the UN Mission in Ethiopia and Eritrea (UNMEE), what does Djibouti think of the continued dispute over the delineation of the Ethiopia-Eritrea border? Could we see new flare-ups between these two countries?
H.E.M.G.G.: According to the UN Mission in Ethiopia and Eritrea, the process to lay out the borders in line with the global peace accord between Ethiopia and Eritrea – which should have got underway in October 2003 – has been postponed sine die. This is the result of Ethiopia’s rejection of the recommendations put forward by the Commission in charge of laying out the new borders, despite the fact that both parties are normally required to comply with the commission’s decisions. We hope to see the two parties sit back down at the negotiating table very soon.
T.D.L.: The United States opened a second front in its war on terrorism by setting up a military base at Camp Lenonier. Could you summarize the terms of American-Djiboutian military cooperation? Will this strategic decision lead to greater financial assistance for your country?
H.E.M.G.G.: The presence of U.S. troops is an undeniable asset for the Djiboutian economy. A good many jobs have been created since the Americans arrived. For instance, they are currently building new infrastructures at both the port and the airport. In early November 2003, the Djiboutian Minister of Foreign Affairs and International Cooperation and the USAID administrator signed a partnership protocol that sets aside $US 20 million for the Republic of Djibouti. This assistance is earmarked primarily for the health and education sectors. The United States thus furnished us and is continuing to furnish us with important assistance in terms of military logistics and the training of human resources.
T.D.L.: As a member of the Arab League, Djibouti has displayed a desire to reenergize its relations with Arab countries in recent years, and has already stepped up relations with Qatar, Yemen, and recently Libya. With what other Arab countries is Djibouti looking to build closer ties?
H.E.M.G.G.: In recent years we have stepped up our cooperation with the United Arab Emirates, first and foremost. The UAE believes that Djibouti has a very promising future and is ready to invest in our country and cooperate with us in a constructive manner.
TD.L.: Djibouti has also opened its arms to brand-new partners like China, Japan and India. Is Asia a promising zone for your country, in terms of cooperation and economic development? What do you hope to see accomplished through the TICAD III summit, held in Tokyo in September 2003?
H.E.M.G.G.: Asia is indeed a very promising zone for our country in terms of cooperation and economic development. As for China, the Republic of Djibouti established diplomatic relations with this country almost as soon as it declared independence. The President of the Republic of Djibouti, H.E. Ismail Omar Guelleh, made a state visit to the People’s Republic of China from 20-26 March 2001. Three cooperation agreements of great importance were signed during this visit.
-The first concerned a grant of 30 million yen (690 million Djiboutian francs) for cooperation projects in the economic and technical arenas.
-The second agreement concerned a low-cost loan of 100 million yen (2.3 billion Djiboutian francs) for cooperation projects in the private sector, in partnership with Chinese firms.
-The third agreement concerned the partial cancellation of the Chinese debt to Djibouti, for a total of 35.91 million yen (825 million Djiboutian francs).
Japan is making an equally important contribution to the development of Djibouti. The great number of projects completed between 1999 and 2001 offers clear proof of the vitality of Djibouti-Japan cooperation, which has focused on promoting the social, health, and education sectors:
-renovating the medical facilities at the Dar el Hanan maternity hospital,
-repairing sewers and pipe works at the Paul Faure Tuberculosis Center,
-furnishing 251 million Djiboutian francs worth of medical equipment,
-furnishing vaccines and equipment to improve the health of mothers and children (165 million DF),
-building the Fukuzawa Middle School in Djibouti City, along with three schools in the countryside,
-repairing road infrastructures in the capital and in Dikhil,
-expanding Djibouti Radio Television,
-carrying out agricultural projects,
-the « NERICA » or new African rice project.
After President Ismail Omar Guelleh’s May 2003 visit, the Republic of Djibouti opened diplomatic relations with India. They will soon take more concrete shape, in the form of a diplomatic mission. A series of cooperation agreements were also signed during this visit. In one, India will give us a ten-million-$US line of credit to build a cemetery in Ali-Sabieh. In another, we will get $1 million in humanitarian assistance to further the fight against drought. In these conditions, Asian cooperation has become much more active.
We also have very high expectations for TICAD III. We hope the exchanges of views at this conference will spur renewed foreign investments and strengthen the mutual assistance and solidarity between the North and the South, so that we can start moving down the path towards truly sustainable development.
T.D.L.: The first Euromarfor mission within the framework of the “Enduring Freedom” antiterrorist operation was launched on 18 September 2003, under French command. What are your views on French and European policy towards fighting terrorism in the Horn of Africa? On a broader level, could we see closer relations between your country and the European Union in the future?
H.E.M.G.G.: European policy towards the fight against terrorism has been well coordinated, at least in Djibouti. The missions are being carried out in a positive climate. The international situation has enabled us to develop a forward-looking approach, along with the Federal Republic of Germany and Spain.
We could be cooperating even more closely with Europe if a good number of European companies moved into the Djiboutian free zone, for instance. They could ship out their merchandise and equipment to all the neighboring regions from the free zone.
T.D.L.: As a former French colony, Djibouti has worked hard to maintain good relations with Paris since claiming independence. These ties were further bolstered by President Ismail Omar Guelleh’s state visit to France in October 2002. In what specific areas could cooperation between our two countries be enhanced?
H.E.M.G.G.: France and Djibouti are in the process of strengthening their ties, for instance at the university level.
The Minister of Basic and Higher Education of the Republic of Djibouti, Mr. Abdi Ibrahim Absieh, and Mr. Patrick Roussel, the Ambassador of France to Djibouti, signed an important agreement on 2 November 2003, establishing a partnership protocol between the University of Amiens and the Djiboutian Ministry of Education. This partnership agreement followed upon the heels of the President of the Republic of Djibouti’s state visit to France in October 2002.
The signing of this accord bears witness to a shared desire by both countries to expand and bolster their cooperation in the areas of general and higher education. This partnership should lead, first and foremost, to: increased exchanges of experts, stronger pedagogic documentation, the training of Djiboutian executives, and better support for and the reenergizing of our country’s educational and university life.
Partnerships are also in the works in the health sector: pairing up hospitals, and sending specialists to Djibouti on periodic missions.
T.D.L.: Given the French military’s economic importance in Djibouti, what was the goal behind revising the taxes and financial contributions of the French Forces in Djibouti (FFDJ)? Was this meant to compensate for the reduction of French military troops in your country? Does your country feel strongly attached to the French-speaking community? Is the Francophonie helping spur the development of Djibouti?
H.E.M.G.G.: The revision of the taxes and financial contribution of the French Forces in Djibouti is obviously tied to the redeployment of the French military contingent stationed there – which has dropped from 4,000 to 2,800 troops – and its negative impact on the local economy.
During his state visit to France, the President of the Republic of Djibouti asked France to come up with a way to offset this loss of income as much as possible. A new agreement concerning the financial and tax status of the French forces stationed in Djibouti was signed after this visit.
The Republic of Djibouti obviously remains very attached to the Francophone community, since it is a French-speaking island in the middle of the English-speaking ocean encompassed by East Africa. Nonetheless, globalization has forced our country to expand the breadth of its economic and political partnerships.
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