The small nation is an increasingly vital economic and strategic hub. But political reform is still missing in action.
Tight political choreography ensured that Djibouti's presidential polls on 8 April resulted in the re-election of Ismael Omar Guelleh for his fourth five-year term. The vote highlighted both the enhanced strategic importance of the tiny state and the choices facing its ruling elite. Revenues from foreign military bases and transit trade are rising fast; and Guelleh's legitimacy in the eyes of key overseas allies and neighbouring Ethiopia appears assured.
What is less certain is whether the president, now 68, has either the will or capacity to transform his considerable diplomatic and economic capital into tangible improvements in welfare, education and employment for the many Djiboutians facing acute poverty.
Djibouti sits on the Bab el Mandeb Straits, where a significant proportion of world shipping passes between the Gulf of Aden, the Red Sea and the Suez Canal. Devoid of natural resources, its leaders are expanding its lucrative roles as both a logistical hub for the world's naval and military powers and Ethiopia's trade gateway to the world. Djiboutians' foreign military guests play a central role in international efforts to fight piracy, protect shipping and counter Islamist violence in the region.
Marrying strategic and economic ambitions
Djibouti earns substantial long-term finance from the lease of military facilities to both France (the colonial power to 1977) and the United States' AFRICOM force. For Paris and Washington, the Red Sea state serves as a base for missions in East Africa and Arabia, and a link between their facilities in the Sahel and Gulf.
Since 2008 the European Union has operated anti-piracy patrols from Djibouti and in 2011 Japan opened its first post-war overseas military facility there. A 2013 Chatham House paper argued Djibouti was fast becoming an 'international maritime and military laboratory', spawning new networks of naval, military and surveillance cooperation, both between NATO forces and with Asian powers.
This trend has deepened in 2016 with the arrival of Chinese naval and military contingents, a logical counterpart to their large investments in civil construction and infrastructure projects in the Horn of Africa.
Work is advancing on China's first permanent overseas naval facility, sitting alongside the new Chinese funded and constructed multi-purpose port and associated free trade zone to the west of the capital and Doraleh. To the south, work has also begun on a Sino-Djiboutian Liquid Natural Gas terminal, highlighting potential hydrocarbon development in Somaliland and Eastern Ethiopia.
The centre-piece of China's role is the renovated Djibouti-Ethiopia rail-link. Formally opening later this year, the 756 kilometre, $3.5 billion railway is poised to enhance regional economic integration in the Horn.
It directly links Djibouti's Doraleh Container Port, and the adjacent petroleum and bulk-cargo facilities, to Addis Ababa's burgeoning industrial zones. Beijing's long-term commercial ambitions are accelerating; a Chinese company has a stake in Djibouti's Port Authority and in mid-April a "strategic partnership" with the Qingdao, China's third largest port, was announced.
Chinese vessels have long participated in multilateral anti-piracy patrols in the Gulf and Indian Ocean. In Djibouti, Beijing's presence is likely to prompt increasing cooperation rather than competition between Asian and Western forces, notably in ensuring the safe passage of commercial vessels through the region's shipping lanes.
Connecting the Horn of Africa and the Gulf
Djibouti has also sought to strengthen its regional links to both the Gulf and the wider Horn of Africa. It is more active within both the African Union (AU) and Arab League than its poverty and small size would suggest. Backed by EU and US forces, it contributes almost 2,000 troops to the AU mission in Somalia.
Despite previous close ties to the Saleh government in neighbouring Yemen, Djibouti supports the Saudi Arabian-led coalition in its war against the Houthi rebels, providing the military alliance with landing rights. It also shelters Yemeni refugees in the northern port of Obock.
Prior to April's elections President Guelleh visited both Riyad and Doha, Saudi Arabia subsequently expressing its intention to establish a military base in Djibouti. In March Qatar's government obtained the release of four Djiboutian prisoners of war from Eritrea; Doha's government has acted as mediator since an Eritrea incursion across Djibouti's northern border in 2008.
Relations with Dubai and the United Arab Emirates are at a critical juncture. Diplomatic ties ruptured in 2015 after arguments with a UAE pilot participating in the Yemen campaign. But relations were already strained, with legal disputes over Dubai Ports World's management contract of Djibouti's principal economic asset, the $400m Doraleh Container Terminal. Fully normalizing relations with Dubai and DPW may now be a priority for Guelleh.
Likewise, periodic friction with Ethiopia over logistics should be relieved by the opening of the railway, further consolidating bilateral interdependence; Addis also now supplies both electricity and water to Djibouti.
Lack of internal reforms
Djibouti's regional ambition and activism is yet to be matched by either internal political reforms or domestic employment policies. Almost half the labour force is unemployed and estimates of extreme poverty varied between between 25 and 45 per cent in 2015.
Without the political will to create jobs, tackling acute poverty and inequality remains a pipe-dream. Practical economics rarely featured in the set-piece rallies and formal political theatre of the recent presidential elections. The incumbent has controlled the state and its revenues since 1999; patronage ensures control of the minuscule electorate, even if it doesn't deliver jobs. Surveillance is tight and political opposition is both personalized and fragmented, making a policy of 'divide and rule' relatively straightforward.
A semblance of unity among an opposition alliance was shattered after security forces raided a meeting of its leaders in December; several key critics then spent the electoral period in hospital or in jail. Two rival opposition candidates campaigned ineffectually, while others called for a boycott.
The result was uncannily similar to previous polls, Guelleh winning 87 per cent of the 135,000 votes cast. A political accord, brokered by donors in 2014, has been quietly forgotten. It is far from clear that the emergence of a younger generation of politicians will either improve domestic political legitimacy or ensure that the benefits from increased trade and foreign investments are shared more widely.
Ahmed Soliman Research Associate, Horn of Africa, Africa Programme and Ahmed Soliman David Styan Lecturer in Politics, Birkbeck, University of London