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The Djibouti heist: Location, location, location

March 7, 2017

 

Djibouti, officially known as the Republic of Djibouti is located in the horn of Africa. It has had several names in its history, some of them being the French territory of Afar’s and Isa’s and French Somaliland.

 

Throughout the country’s history, it has had several influences. At one point, it was under the control of the Somali-Islamic Empire of Awdal and at another time it was ruled by the Christian-Abyssinian Empire. It also traded significantly with the Arabian Peninsula and Egypt across the red sea, most recently it has been a French colony, winning its independence in 1977.

 

The country has quite a small population with less than a million people and it is considered a micro-state. It is not industrialised, and has no economically lucrative exploitable natural resources. It borders several, some ‘less calm states’; one of which being Somalia, the other which incorporates a life time’s worth of military service, Eritrea. Then, there is its neighbour Ethiopia, a country which has several militant groups attempting to succeed. Djibouti is also not far from the Arab peninsula’s latest firing range, Yemen, were an Arab coalition is seeking to degrade and destroy Houthi rebels backed by Iran, this coalition want to place their man in power. 

 

Nonetheless despite the neighbourhood, the country is considered shockingly important in matters concerning trade, international geopolitics, and nonspecific, probably classified, military affairs….why? Well as any London, New York, or Vancouver estate agent would tell you, it is all about ‘location, location, location’ and there is no shortage of renters willing to pay premium rates. The country is located on the southern entrance to the red sea, on the way to the Suez Canal, a way point between the Middle East, India and Africa. Over the last 20 years Djibouti has taken advantage of its location as a hub of international trade investing significantly in its port and capacity centres.

 

The French, The American’s, The Japanese and now the Chinese all have military and or logistic hubs in the country. Apparently, the US headed off and dissuaded the authorities in Djibouti from accepting a recent enquiry by a would be Russian tenant, Mr Putin will have to rent elsewhere.  Now, the complex interplay of nation states aside, considering the state of infrastructure of the country, one wonders…where is all the money earned from the port, and these bases going?

 

The US pays $63 million annually; the Chinese $20 million (10-year lease) and there are contribution from the others. Let’s just assume it all adds up to £100 million annually, although it’s probably a lot more. With a GDP at $1.628billion, Djibouti should not be struggling.

 

Taking those none descript figures above into consideration anyone that has ventured into the city, not the low class major hotels that cater to international businessmen, spooks, and diplomats- there is actually a Yelp review that references them- I kid you not! Would ask you to consider the potholed streets, in the capital, some airport terminals, and the lack of adequate taxis in the city. All that cash clearly is not being spent on those things.

The money cannot be going on the defence budget, Djibouti is essentially protected by all the states that have bases there, even their AU contribution to Somalia is paid for by the EU so its not that!

 

Possibly it is major developmental work? Unlikely, they take loans and probably argue for fair repayment terms…even then, they make plenty of money from their tenants and the port money is clearly not spent on infrastructure.

 

President Guelleh recently spent $65 million - state money - in attempts to prosecute former friend and confidante Abdurrahman Boreh over alleged corruption, they tried to freeze Borah’s $100 million worth of global assets, Djibouti lost the case. They are evidently willing to spend millions if they get personally slighted.

 

With a population of less than 900k, debts paid back on favourable terms, trade via the port and the military base revenue on tap, one wonders why on earth Djibouti is not like Dubai. By that I mean why no high rises, generous packages for citizens, free health care, free education, etc,. Furthermore, considering the African continents emergence as a global market the future also looks for trans-hub states like Djibouti…

 

Perhaps Djibouti is a giant slush fund that launders money for the real elites (neo colonialist French bankers and politicians) money laundered from French interests in the Francophone. Or, maybe the political elites syphon off money to foreign bank accounts and properties, another theory commonly argued.

 

Either way there is obviously corruption going on in what is essentially a state that should be wealthy and influential as a consequence of its location alone, nonetheless, the process here should be Colombo-esk in the sense that it’s about unravelling the mystery of the corruption as opposed to the corruption itself (we know it’s there), not that the money is gone but efforts should be put into establishing where it’s going and what mechanisms support this heist.

 

The views of the writer does not necessarily reflect the views of Muslim Eye.

 

 

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