Djibouti's foreign policy targets developing ties with neighbours and global economic powers

Djibouti is a small country in an often turbulent neighbourhood. Much of its foreign policy since independence has been based on the dual goals of maintaining sovereignty and promoting development within its borders. However, over the past decade, the country has played an increasingly central role in regional diplomacy, not only for its strategic location – which has allowed it develop close ties with neighbouring Ethiopia and a host of other large global economic powers – but also for its comparative stability, which has allowed it to play an important part in helping reduce regional instability and violence.

Djibouti’s relative quiet is a notable contrast to the surrounding area. The challenges of the Somali state bring the risk of instability and the threat of terrorism to the south of the country, which also sits between Ethiopia and Eritrea, two neighbours with a history of feuds. Djibouti’s 300-km coastline presents its own challenges. The Gulf of Aden has been afflicted by piracy. This poses a threat to shipping, trade and Djibouti’s main economic contributor, the Port of Djibouti, and to the revenue and services it provides.

Global Partners

The Horn of Africa has increasingly become a priority for the international community. As such, the state has been willing to play host to an international military presence. France and Japan both lease land for military installations at a cost of $30m per year each, for example. The US has also established a military presence. The 500-acre Camp Lemonnier is the only permanent US military base in Africa. For housing as many as 4000 soldiers in Djibouti, the US pays $67m annually to the government.

Italy and Pakistan also have a military presence in the country, and in November 2015 it was announced that they would be joined by China. The new facility will be China’s first on the continent and one of its first permanent installations overseas. Wu Qian, a spokesman for China’s ministry of national defence, told a press conference that the new base will “provide better logistics and safeguard Chinese peacekeeping forces in the Gulf of Aden, offshore Somalia and other humanitarian assistance tasks of the UN”.

The benefits of Djibouti for China are clear. According to Wu, “China has sent a total of 21 escort fleets – more than 60 ships – to carry out escort missions in the Gulf of Aden and off Somalia since 2008 in accordance with UN Security Council resolutions. The fleets are facing practical difficulties, such as places for soldiers to rest and supplies of food and fuel, so it is really necessary to find a nearby place to provide efficient logistics.” Press reports indicated that China would pay an annual fee of $100m for the base.

Positive Externalities

However, the presence of foreign operations should also support the local economy. The US, for example, has implemented a “Djibouti First” policy, under which procurement and spending for military installations should benefit the host nation. Indeed, the strategy of the Guelleh administration helps Djibouti to develop relationships and garner support in terms of direct aid and broader investment. Official development assistance represented 10.1% of GDP between 2010 and 2013. The US was the biggest donor, providing $45m. China provided an additional $10m, while a multitude of other countries and multi-lateral donors provided $522m in assistance, according to the OECD.

Djibouti’s ties to foreign powers also bring in other financial flows. Indeed, in the same period, 2010 to 2013, China contributed other official flows worth $134m. The announcement of a Chinese military base in Djibouti is the culmination of growing bilateral relations between the countries. President Ismaïl Omar Guelleh announced that he had signed three other agreements with the Chinese, including a deal for a free trade zone and new regulations allowing for the operation of Chinese banks in Djibouti. Although it remains a difficult balancing act, such moves illustrate the efficacy of the government’s foreign policy.