27 January 2003

Djibouti: Turning Strategic Location into Economic Advantage


Washington, DC — It's no mystery why Ismail Omar Guelleh, the leader of one of Africa's smallest nations, received red-carpet treatment during his visit to Washington last week. As the president of Djibouti is quick to acknowledge, the key to his country's popularity is its location.

"We are privileged to be in a strategic position where we can protect and defend the oil route," he told a meeting of American business executives on Thursday, two days after he spent half an hour with President George W. Bush in the Oval Office. Djibouti, which has a population of 700,000, is situated on the Gulf of Aden at the mouth of the Red Sea, the connecting link between the Indian Ocean and the Mediterranean Sea.

"We discussed ways the United States can contribute to our development," Guelleh said, describing his talks with Bush. Peace Corps volunteers are likely to be assigned to the country for the first time, and the U.S. Agency for International Development is opening an office to manage aid projects. U.S. aid has risen from $3 million in 2000 to about $9m, with much of the increase earmarked for upgrading the international airport.

Since the attacks on September 11, 2001, Djibouti has become a major U.S. staging area in the volatile region that includes northeast Africa and the Middle East. Some 900 American troops are now stationed at Camp Lemonier, a facility formerly used by the French armed forces adjacent to the airport.

In addition, the Central Intelligence Agency is widely reported to be using a Djibouti airfield to launch pilot-less Predator drones, which both conduct surveillance and attack selected targets using laser-guided Hellfire missiles. One Predator flying from Djibouti is credited with killing a suspected Al-Qaeda leader and five other occupants of a car traveling in a remote region of Yemen.

During a tour of the region in December, Defense Secretary Donald Rumsfeld met with Guelleh and visited the base to thank American troops for being willing to put their own lives at risk. "We need to be where the action is, and there is no question but that this part of the world is an area where there is action," he said.

An American task force assigned to oversee anti-terrorism operations in the Horn of Africa region is headquartered on a naval ship, the USS Mount Whitney, sailing off Djibouti with about 400 military personnel aboard. The commander of the task force - whose responsibility extends to Somalia, Eritrea, Ethiopia, Kenya and Sudan, as well as Djibouti and Yemen - announced this month that his units will be providing counter-terrorism training and sharing security equipment with armies in the region.

Last November, Marine Corps Expeditionary Units conducted full-blown exercises in Djibouti, using heavy weapons and live ammunition. Another military exercise was staged in the country earlier this month. Djibouti's full-tilt engagement in the global anti-terror campaign represents a "courageous decision" on the part of President Guelleh, the American ambassador to Djibouti, Donald Y. Yamamoto, told last week's business gathering in Washington, which was sponsored by the Corporate Council on Africa.

Guelleh, a former policeman, served for two decades as "chef de cabinet" to the country's first president, Hassan Gouled Aptidon, who took office at independence from France in 1977. Running as the ruling party's candidate in 1999, Guelleh won three-quarters of the vote in an election that was criticized by the opposition but certified by local international observers as generally fair. Calling Djibouti "an island of stability in a tough neighborhood," Yamamoto urged the business community to take a closer look.

Guelleh said he wants the solidarity that has developed between his country and the United States on security issues to be expanded into the economic arena. Although Djibouti is on the list of eligible countries under the African Growth and Opportunity Act (U.S. legislation designed to facilitate business with African nations) and the Djibouti franc is linked to the American dollar, "we have yet to make progress in attracting U.S. investors," Guelleh said.

Djibouti is seeking a free trade agreement with the United States to help spur development of a free trade port that could serve as a regional center, Guelleh said. The government also wants to attract foreign companies to prospect for oil and rehabilitate the country's transport infrastructure, including the railroad that runs across Ethiopia from the capital Addis Ababa and ends at the Djibouti port.

One former U.S. official who has had extensive dealings with Guelleh says he is viewed throughout the region as "smart and wily." With war against Iraq looming on the horizon, he has navigated cautiously, opposing an attack while seeking to remain on the best possible terms with Washington. Roble Olhaye, Djibouti's ambassador to the United States and dean of the African diplomatic corps, wins high marks for building good ties both in the administration and on Capitol Hill.

But Djibouti has not been able to attract the aid, trade or investment it needs to jump-start development. With an impoverished and largely illiterate population, Djibouti faces daunting economic challenges. Almost all the nation's food must be imported, and jobs are scarce. The recent reduction in the French troop presence has exacerbated unemployment and reduced foreign currency inflows.

Whether increased U.S. military presence can offset those losses remains unclear. Also uncertain is whether foreign companies will heed Guelleh's entreaties to invest. Some firms that have shown an interest in doing business there say they have been disappointed by the reception they have received.

But Guelleh sounds determined to keep trying. "We welcome all proposals," he told the business gathering. "We want you to come."


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