By Daniel Ooko

Djibouti may be one of the world's smallest states but it is located at one of the most strategically-important places on earth – no wonder therefore the United Sates has a major military presence in the country. Surrounded by nations at war, The Media Line's Daniel Ooko discovers why Djibouti is rapidly becoming the success story of the Horn of Africa.

Djibouti ’s shuttle diplomacy over the last decade has begun to pay dividends. From playing the mediator in Somalia’s political turmoil, to courting full economic integration with Ethiopia, Djibouti’s relations with its Horn of Africa neighbors has been on the thaw.

The country’s ties with the Arab states, notably Saudi Arabia, have led to economic cooperation following Djibouti’s effective use of the Red Sea as a transit destination. They have also been bolstered by its membership of the Arab League.

To achieve its goals, Djibouti has combined strong involvement in East African affairs, through its membership of the Intergovernmental Authority on Development (IGAD)—a six country regional development and security body—with its membership of the Arab League. Eritrea, Ethiopia, Djibouti, Kenya, Uganda, Somalia and Sudan are all IGAD members.

Djibouti President Isma’il ‘Umar Guelleh believes his country has the potential to become the region’s transport, telecommunication, and technology hub. This will happen if it can acquire the best wireless telecommunication technologies and give the population internet access.

“We need to install a secure fiber optic network to facilitate access to high speed world networks that would help us as African countries to increase our capacities to trade,” Guelleh told a recent African leader’s summit in Kigali, Rwanda.

The meeting, which outlined Djibouti’s growing interest in regional developmental issues, came amid a growing push for a continent-wide telecommunication cable running from South Africa to Djibouti, a project known as the East African Submarine Cable System (EASSy).

“We need to train our people to use wireless technologies. It is important to have users of these technologies,” he added.

Djibouti has high ambitions for developing trade and the growth of the region’s information, communication technologies (ICT). These are key issues for Djibouti’s industrial take-off to succeed in a rapidly globalizing economy.

The International Monetary Fund (IMF) sees Djibouti as a country lacking in human resources, limited in numbers of trained personnel, starved of natural resources, but with the massive potential to become the Horn of Africa’s financial capital.

President Guelleh, who became Djibouti’s second president in 1999, considers his country the top runner in the regional race to acquire the best ICT tools.

“ Djibouti understands the need for regional and national backbones and wants to position itself as integrating all forms of ICT, including voice and data,” he said.

The breakaway republic of Somaliland has been Djibouti’s most serious regional economic rival for port services. Djibouti does not recognize Somaliland’s independence, but the two nations have been locked in cut-throat competition for export-import cargo from Ethiopia and other landlocked countries in the Horn of Africa.

International economists say the rivalries between Djibouti and Somaliland stem from Djibouti’s involvement in the Somali dispute and its mediation in the Arta Conference, which created the Somali Transitional National Government (TNG).

Djibouti has hinged its economic success on the effective use of its port facilities, which are the source of its economic wealth and a lifeline for its infant manufacturing sector. Djibouti benefits from taxes paid by users of the port.

The country’s foreign relations are also heavily dependent on its economic interests, which is why President Guelleh is so keen to nurture an economic federation with the larger, more prosperous Ethiopia, which ships all its exports through the Port of Djibouti.

Ethiopia has been Djibouti’s source of wealth and has contributed most of the revenue earned from the transit trade at the Port of Djibouti. The Djibouti government has been investing in improving facilities at the port to handle millions of livestock exports to Saudi Arabia.

Djibouti ’s neutral stance on regional affairs, especially in Horn of Africa politics, saw it nominated to host the offices of IGAD, which was formed in 1985 to help solve the twin curse of drought and famine, which have bedeviled the Horn of Africa for the past two decades.

In the past, the country became caught up in the Horn of Africa quagmire, involving Ethiopia on one side and Somalia on the other.

Eritrea , Ethiopia’s arch enemy, suspended its membership of IGAD in April this year after Djibouti suggested that the Ethiopian troops, which had helped to place Somalia’s President Yusuf in full control of Mogadishu affairs, remain in Somalia until further notice.

The suggestion by Djibouti during this year’s IGAD ministerial conference on the Somali crisis infuriated Eritrea, which demanded an immediate Ethiopian pullout from Somalia.

Djibouti has been the main beneficiary of hostilities between Eritrea and Ethiopia. The country handles all Ethiopian exports and imports through its ports, which accounts for 70 percent of its annual earnings. Previously, Ethiopia exported its goods through Eritrea, however, this changed with the Ethiopia-Eritrea border war in the 1990s.

Saudi Arabia has been a key player in terms of Djibouti’s relations with the other Arabian Gulf states, most of which depend on livestock imports from the Horn of Africa region, which is mainly inhabited by nomadic pastoralists.

Muslim pilgrims visiting Mecca for the Hajj annual pilgrimage provide a rich source of income for the Port of Djibouti, which acts as a transit port for hundreds of thousands of live animal exports to Saudi Arabia and other Gulf states.

Djibouti regards its economic diplomacy as far more advanced than its neighbors and has taken credit in the past for the lifting of a live animals export ban imposed by Saudi Arabia in 2000, which affected all animals from the Horn of Africa region.

Ethiopian Foreign Minister Seyoum Mesfin says his country’s relations with Djibouti continues to be “very strong” and will be further strengthened through people to people relations, which would create a form of economic federation.

How far the two states have discussed economic integration is not clear. One thing is clear though, the Ethiopian authorities admit that relations with Djibouti are based on the understanding that Djibouti is Ethiopia’s international gateway.

Source: The Media Line