Djibouti is the former French colony known as the Territory of the Afars and Issas, a reference to the two dominant tribes. It sits on one side of the Bab-el-Mandeb straight, separated from Yemen by a 25km shipping channel. There is virtually no agriculture and water resources are limited. Temperatures frequently exceed 50C. The economy is based on ports and transport – a free zone, storage, and port facilities which include import and export traffic for landlocked Ethiopia. It hosts a large US base, a French base and smaller bases from Japan and Germany. The population is approximately 800,000. There are an estimated 150,000 to 200,000 refugees in the country, mainly from Somalia and Ethiopia.
Djibouti is bordered by Eritrea, Ethiopia and Somalia (Somaliland), with Yemen just across the Bab-el-Mandeb.
Social indicators in Djibouti
Infant and maternal mortality are extremely high. Infant mortality is 86 per 1000 live births (2006) and maternal mortality is 74 per 1000 births. Child mortality up to 5 years is 130 (2006). Life expectancy at birth actually fell during the period 1985 to 2003 from 46 to 44. These are among the very worst welfare indicators in the entire world – particularly tragic when one considers the relatively substantial per capita government income.
There is one doctor for every 6,722 people and one pharmacist for every 75,442 people. 55% of morbidity causes are from curable respiratory infections, diarrhoeal disorders, and ‘unknown’ fevers. The ICRC reports that despite revenues per inhabitant estimated at USD 890, the country occupies the 153rd position among the 175 countries classified.
Nominal GDP in Djibouti is $1.1bn (2009), and nominal per capita GDP is $1,260. External debt is 60% of GDP. The currency is fixed to the US$ in a currency board type arrangement.
The state dominates the economy with its financial interests in the key free zone and ports sector and the high state expenditures. 70% of formal employment is in the state sector. Unemployment is estimated at between 65% and 70%. Over 70% of the population live in absolute poverty and 42% live below the official poverty line.
The economic position of the general population declined significantly in the 2000-2010 decade, despite rises in nominal and PPP (purchasing power parity) GDP. Between 1999 and 2006 per capita spending on consumption declined by 35%.
Djibouti has a large balance of payments deficit, which means, given the fixed exchange rate, that the Djibouti Franc leans towards being overvalued.
The banking sector in Djibouti is not yet regulated to international norms, following the withdrawal of the two main French banks. Ten new bank licenses have been issued in the last two years, despite warnings from the IMF that the Djibouti banking oversight system is not suited to the issuance of new licenses. Non-performing loans in the Djibouti banking sector are at 17% (2009).
Djibouti is allegedly a centre for international money laundering for the region.
Djibouti’s security and foreign relations
In 2008 Djibouti was engaged in a border war with Eritrea. A fragile peace was arrived at and a peace agreement was signed in June 2010. Tensions persist, exacerbated by tribal tensions between the Afars and the Djiboutian government on the Eritrean border.
Relations with Ethiopia have soured in recent years due to economic disputes, and the perception in Ethiopia that Djibouti is unduly exploiting its maritime import/export monopoly of Ethiopian goods. Ethiopia has consequently been seeking alternative transport and port facilities via Somaliland.
Relations with Yemen are complex, partly due to tribal links and smuggling routes between the two countries, but also due to the use of the US base in Djibouti for military and intelligence operations in Yemen.
Djibouti has sent troops to Southern Somalia in relation to the fighting around Mogadishu. In addition, the US and others have trained soldiers fighting against the ‘insurgent’ Al Shabaab in Southern Somalia. For these reasons, there have been threats from Al Shabaab against the Djibouti state and the US bases in Djibouti.
There have been long standing tensions between the Afars and Somali Issas in Djibouti.
A civil war raged between 1991 and 1993. A moderate faction of FRUD (Front for the Restoration of Unity and Democracy) signed a peace accord with the government on December 26, 1994, effectively ending the conflict.
A radical faction continued small-scale armed resistance, eventually signing its own peace agreement in 2001.
Ethnic tensions surfaced again from 2008 onwards, with the government effecting a food blockade against the Afar area in the North in 2010. There has been a resurgence of armed rebellion in 2010.
Afars are generally not employed in government. This is a source of tension given the fact that 70% of jobs are in government in Djibouti.
Tourism in Djibouti
There are beautiful beaches and unique tribal customs.
There are regular flights to Dubai, Addis Ababa, Sanaa, Amman, Mombasa, Nairobi, Hargeisa, Aden and Paris – and other regional locations.