- The Washington Times - Thursday, January 25, 2001

DJIBOUTI Brightly painted wooden dhows and huge Iranian freighters jostle for berthing space in the main port of this tiny African city-state that, until recently, seemed forgotten by time and ignored by the outside world.
But now, Djibouti hopes to make a name for itself, not only as landlocked Ethiopia's main lifeline to the Indian Ocean, but also as a transshipment hub for all of East Africa.
In June, the former French colony signed an agreement with Dubai Ports International of the United Arab Emirates. Under the 20-year concession, DPI will boost efficiency and vastly expand container-handling operations here at the entrance to the Red Sea. The port accounts for 75 percent of Djibouti's economy.
There was no competitive bidding, and terms of the deal are unclear. Djibouti's president, Ismail Omar Guelleh, said in an interview that his government is investing $50 million in the project, and DPI will get $400,000 a year for its role in managing the port.
"They want to help us," said Mr. Guelleh, who was inaugurated in April 1999 for a five-year term as president of this desert country two-thirds the size of Maryland.
Mr. Guelleh, 52, a lawyer, became active in the Rassemblement Populaire pour le Progres (RPP) in the 1970s. In 1977 with independence, he was named chief of Cabinet of the presidency in charge of internal and external security a post he held for 22 years.

Magnet for refugees

Wedged among Eritrea, Ethiopia and Somalia, the Republic of Djibouti has nearly 700,000 inhabitants. They include the majority Issa, the country's dominant Somali clan, as well as the less-numerous Afars, some 3,000 French soldiers and a large number of refugees from neighboring countries.
"We have more people living in the streets than in houses," said Ismail Tani, chief of the presidential Cabinet. While this may be an exaggeration, it's not by much, as a visit to any of a half-dozen squalid refugee camps ringing the capital city attests.
"These people are here because they think Djibouti is at peace, and that they can get something to eat," said Mr. Tani, the country's former government spokesman. "Some were nomadic, and some were peasants. They hope to use Djibouti as a transit point to go to Europe or America."
Since the end of a 1995 civil war between the Afars and Issas, Djibouti has been a relative oasis of calm on the Horn of Africa, and the few tourists who pass through appear to be warmly welcomed.

No anti-Americanism seen

"I have yet to perceive any anti-American sentiment here," said one of the 50 or so Americans living in Djibouti.
The Place du 27 Juin 1977, a shady square commemorating the day France its colonial master from 1884 until 1977 gave Djibouti its independence, is the focus of life in the city of Djibouti, home to half the country's population. Restaurants, hotels, clothing shops and shoeshine men cluster around the plaza, where taxi drivers honk their horns and peasant women sell qat a semi-narcotic leaf chewed by nearly everybody.
About two blocks from the plaza, young Djiboutians check their e-mail at NubiaNet the country's only functioning Internet cafe. On Friday afternoons, loudspeakers atop mosques call the faithful to prayer.
Djibouti, which is 99 percent Muslim, belongs to the Organization for African Unity as well as the Arab League, though some observers suggest this is economically rather than ideologically motivated.
"Djibouti is on the outskirts of the Arab world," said Amer Daoudi of Jordan, a U.N. official who travels here often as regional logistics coordinator for the World Food Program. "The people barely speak Arabic."

Average income is low

They do, however, get substantial aid from Saudi Arabia, which recently built a modern highway between the capital and Lac Assal, an inland desert lake that is the source of Djibouti's only real industry salt extraction.
The country's only major U.S. investor is Mobil Oil, which has a petroleum storage facility, although Nevada-based Geothermal Development Associates has just completed a feasibility study for construction of a $117 million power plant at Lac Assal.
"When you remove all the Europeans, the per capita GDP here is pretty low," said the American resident, estimating the gross domestic product at no more than $400 about the same as Nicaragua's.
Asked about Djibouti's tourism potential, the American chuckled. "It's got the resources, but not the infrastructure. And it's beastly hot," he said.
That leaves the port as Djibouti's main economic hope for the future.
Luc Deruyver, director-general of the Port of Djibouti, politely refused to discuss the Dubai management deal or say how much revenue the port generated last year, insisting that such details are "strictly confidential."
He did, however, say that since his Dubai-based team took over six months ago, "we have almost doubled the performance of the gantry cranes, jumping from 10.2 container moves an hour to 19.7. We hope to be at 23 by early 2001."

Port working nonstop

The four brightly painted blue-and-orange cranes, imported from Italy and China, are about the only signs of modernity in this otherwise dingy port complex.
"The ships are working twice as fast as they used to, so they're in port only half the time," said the Belgian-born Mr. Deruyver, estimating that the port handled 126,000 20-foot equivalents (TEUs) of cargo in 1999, with Ethiopia accounting for 95,000 TEUs and Djibouti itself for another 10,000. The remaining 21,000 TEUs represented transshipments to Dar es Salaam and Mombassa.
"We hope to become a major transshipment port for East Africa," he said. "By improving our performance, other ports will have to start competing against Djibouti."
In May 1998, a fierce border war erupted between Ethiopia and Eritrea, and the Eritrean government declared the ports of Assab and Massawa off-limits to Ethiopian importers and exporters. As a result, Ethiopia a nation of 60 million people has become totally dependent on Djibouti for everything from weapons to wheat.
The port is working 24 hours a day to handle the increased business, which in 2000 consisted of roughly 2 million tons of bulk cargo, 1.6 million tons of containerized cargo, 1.5 million tons of oil products and 150,000 tons of miscellaneous goods everything from soap to steel to automobiles.

Exporters are pleased

"Since we're using Djibouti, we've seen a lot of improvement," said Abdulrezak Sherif, chairman of the Ethiopian Coffee Exporters Association, which exports 100 percent of its coffee through here.
"Everything is going smoothly. Before, we used Assab and we had a lot of problems shortages of cranes, delays of shipments and theft," Mr. Sherif said.
About 60 percent of all food aid destined for Ethiopia comes from the United States, where Midwest grain is loaded onto barges, floated down the Mississippi River to New Orleans, and then shipped to Djibouti. From there, the grain is loaded onto trucks for the grueling, 10-hour road trip to Addis Ababa, the Ethiopian capital.
In mid-December, Ethiopia and Eritrea signed a peace treaty, which paves the way for renewed use of Eritrean ports by Ethiopia. But Mr. Guelleh said Djibouti already has carved out a market niche for itself that is unlikely to disappear with the end of hostilities.

Port employment critical

Meanwhile, the port provides direct and indirect work to more than 3,000 Djiboutians, making it the country's single largest employer. Some of the laborers work for the government, while others are under contract with DPI.
Walking around the docks, it's easy to spot port employees lounging around. An official who asked not to be named said the payroll includes stevedores who are blind, crippled or otherwise unemployable.
"It's a fact that Djibouti is in the midst of a severe economic crisis. There are no natural resources here except for the salt industry," said Mr. Deruyver, who is under pressure not to fire unneeded laborers in a country already suffering 35 percent unemployment.
"We are trying to better utilize our workers. We're trying to avoid any social conflicts."
One thing no longer seen at the port are dockworkers with their mouths full of qat. Among the first things DPI did upon winning the management contract was to prohibit qat-chewing.
Said Mr. Deruyver: "Any substance that diverts you from your job cuts down on efficiency."

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