Date: Monday, 01 October 2018
Image: Djibouti Independence Day military parade 2017 by Combined Joint Task Force Horn of Africa
In an interview with the Saudi government-linked Asharq al-Awsat earlier this week, Djibouti’s president Ismail Omar Guelleh credited Saudi Arabia’s King Salman for mediating the historic peace agreement between Djibouti’s long-warring neighbors Ethiopia and Eritrea. He also thanked for the Saudis for their role in his own country’s ongoing normalization of relations with Eritrea. Guelleh went so far as to call Riyadh “one of the pillars of peace, security and stability in the region and the world,” although many of the Yemeni refugees in Djibouti would likely disagree.
In reality, Guelleh himself is not nearly as pleased about the recent shifts in the Horn of Africa as the interview makes it seem. His government has spent much of the past several months making noises about obstructing the peace process taking shape between Ethiopia, Eritrea, and Somalia. Less than two months ago, Djibouti’s embassy in Somalia was “deeply shocked” by Somali president Mohamed Abdullahi Mohamed calling for UN Security Council sanctions on Eritrea to be lifted.
On paper, Djibouti framed these objections against the backdrop of its own border dispute with the “North Korea of Africa” over the Dumeira islands. More importantly, however, reconciliation between its neighbors completely upends Guelleh’s economic strategy.
Ethiopia, with a population of over 100 million people and a rapidly growing economy, has long been dependent on Djibouti for its global import and export needs after losing control over Eritrea in 1991. The standoff between the two sides meant Djibouti came to handle some 95 percent of its neighbor’s trade. Those economic links have brought considerable investment: the Djibouti-Addis Ababa railway was officially inaugurated in October of last year, cutting travel time for goods and passengers from three days over congested road routes to less than 12 hours by rail.
China has provided much of the funding for this recent development. The Addis Ababa-Djibouti Railway, for example, was built with Chinese money. Chinese firms currently fund approximately 40% of the country’s major investment projects. Chinese financiers now hold more than three quarters of Djibouti’s debt. Djibouti has been adamant in rejecting criticisms of its overreliance on with Beijing, with Finance Minister Ilyas Dawaleh asserting “Djibouti’s development needs all its friends and strategic partners…no one can dictate to us who we should deal with.”
China’s partnership with Djibouti, of course, has always played out with one eye on Ethiopia. Beijing is Ethiopia’s largest trading partner (with $6 billion in trade last year) and its firms are collectively Ethiopia’s largest foreign investor ($269.4 million in 2017). Ethiopia and its Chinese partners had been on the hunt for alternative seaports precisely because of Addis Ababa’s frozen conflict with Eritrea, but with that conflict now resolved, Eritrean ports are already preparing to compete with Djibouti in serving Ethiopia’s shipping needs.
While Djibouti once seemed intent on becoming the fly in the ointment, Guelleh ultimately ceded to the inevitable course of events and likely pressure from its outside backers. On September 6th, his government announced it would normalize its own relationship with Eritrea. This seemingly lifted the last roadblock standing in the way of regional peace.
While the diplomatic dance is over, Guelleh still has to figure out how to keep his country’s economic future intact. Djibouti’s entire development strategy has depended on two pillars. The first is, of course, is being Ethiopia’s only route to the Bab el-Mandeb strait and the global shipping lanes that run through it. The other pillar centers around security. Only 32 kilometers wide between Djibouti and Yemen, the Bab el-Mandeb strait is a critical chokepoint in global shipping routes. Eritrea’s isolation and Somalia’s instability allowed Djibouti to set itself up as the sole “secure” base of operations for major powers looking to safeguard their interests in the region, from the persistent global security concern of fighting piracy to counterterrorism operations against Islamist militants in both Africa and Somalia.
Djibouti’s leaders have capitalized on this fact by renting out territory to foreign militaries. Among the Western powers, first France and subsequently the US have maintained major bases in the country. More recently, however, Djibouti’s government has been ruffling American feathers by welcoming China’s first overseas military base amid heightened concerns over Beijing’s growing economic and political influence over the region and sub-Saharan Africa more broadly. China’s base in Djibouti opened in August of last year, coinciding with the 90th anniversary of the People’s Liberation Army (PLA).
Despite Chinese insistence that the PLA’s Djibouti base is meant to facilitate peacekeeping and humanitarian missions in the region, US General Thomas Waldhauser warned Congress earlier this year that “we have strategic interest there, and the Chinese have built a base just outside our gate.” India has its own concerns, with officials there viewing the base as part of a wider scheme to establish a new “string of pearls” that also involves Bangladesh, Myanmar and Sri Lanka.
Djibouti own actions have left it walking on eggshells with these partners as well. British courts have repeatedly ruled against the country’s seizure of the Doraleh Port Terminal from Emirates-based DP World this past February. Djibouti’s response to those rulings have forced the judges to threaten its leaders with contempt of court; the High Court of England and Wales has prevented Port de Djibouti (PDSA) from removing directors appointed by DP World for the terminal project, following a move by port authorities to terminate the existing contract amid reports of a planned handover to Chinese operators.
The controversy surrounding the Doraleh port seizure has further soured international investors on a country already seen as overly dependent on Chinese capital and credit, all while Djibouti’s neighbors pursue a new paradigm that makes it redundant. While the country puts a brave face on the new state of affairs, it’s hard to imagine Ismail Omar Guelleh’s development strategy survive his country becoming losing its importance to Addis Ababa (and by extension Beijing) while also antagonizing everyone else interested in doing business there.