20 March 2019
by TINTSWALO BALOYI
Djibouti President Ismaïl Omar Guelleh with Chinese counterpart Xi Jinping
DJIBOUTI is destroying itself in its quest for development
In its quest for development, Djibouti has enlisted China’s help. The African country sees itself as the tail wagging the dog, but nothing could be further from the truth. China has its eyes set on Africa as a means to enrich itself, not Africa.
In 1980, Chinese trade with Africa stood at $1 billion, by 2014 it was $200 billion. In 2013, Xi Jinping announced his “One Belt, One Road” (OBOR) initiative. It is comprised of the Silk Road Economic Belt and the Maritime Silk Road, linking Asia and Europe much like the original Silk Road that was established 2,100 years ago. Only three African countries are directly involved in OBOR: Kenya, Egypt, and Djibouti. The latter two countries owe their place in the scheme to their strategic locations, as 30% of world trade passes through the Suez Canal, from the Indian Ocean through the Red Sea and then onwards to Europe.
Djibouti has a population of less than 1 million people and a GDP of only $1.8 billion, as well as having no natural strategic resources. The reason China is interested in it is because Djibouti is located at the southern tip of the Red Sea. The Bad al-Mandab strait on which it sits sees around 4.8 million barrels of oil pass through it every day and between 10 and 20% of global trade every year. Situated opposite Yemen and Somalia, it is also a nerve centre for Western and regional anti-terror operations.
To this end, China is funding 14 mega projects in Djibouti worth almost $10 billion. It has also lent the country almost $1 billion and funds 40% of its infrastructure projects. One such project is a 63-mile water pipeline to transport drinking water from Ethiopia to Djibouti, with China footing a bill of over $300 million.
DEBTS MUST BE PAID
Djibouti is paying a high price for China’s assistance – literally. In 2014, Djibouti’s debt was roughly 50% of GDP, by 2018 that had jumped to over 105%, with much of it owed to China. If the African country thinks the East is any more forgiving than the West, then it needs to think again. When Sri Lanka was unable to pay back Chinese loans, it was forced to give China a 99-year lease and 70% stake in the Hambantota port that Beijing had built for them. There is no such thing as free money.
Blinded by dollar signs, Djibouti has also been unwilling to see that the price it will pay is not just financial. China’s “corrupting influence” on the small African country is already being reported on in world media.
One international case exemplifies this perfectly. In 2004, a deal between the UAE and Djibouti effectively meant that the former would run all the latter’s ports for a 30-year period. Djibouti’s Doraleh port was built under this agreement, only for the host country to nationalise it in February 2008. This was a strident breach of international business norms.
Djibouti claimed the UAE reached the deal through bribery, and that it was intentionally retarding the progress of its ports to defend the status of UAE ports. The London Court of International Arbitration dismissed these claims and said the deal was still valid and had to be respected.
The UAE then took the state-backed China Merchants Port Holdings to court – accusing China of turning Djibouti against it. Djibouti had broken the deal by selling shares in ports to China Merchants, and agreeing to build and develop other ports with Chinese help. Both Djibouti and China have simply ignored the court order and carried on business as usual. If Djibouti thinks anyone other than China will want to do business with it after this affair, then it is sorely mistaken.
A key figure in this chain of corruption is Ismail Ibrahim Houmed, one of Djibouti President Ismail Omar Guelleh’s most senior and trusted advisors. Housed plays a key role in both internal politicking and foreign trade. He is attached to the Foreign Affairs Ministry and directly advises the president on foreign policy, and has previously held a string of low-level ministerial portfolios including transport and justice.
Houmed has had links since with China since at least 2007 when he minister of transport and oversaw the $4 billion deal for the Djibouti-Ethiopia electric railway – a Chinese venture. He helped China Merchants’ subsidiary company acquire the controversial stake in the Doraleh port.
Djibouti is not developing with Chinese assistance, its economy is being crushed by debt while its elite are being enriched through corruption.
IN THE CROSSHAIRS
Djibouti likes to think of itself as invincible on the world stage. This is due to it housing the largest number of foreign military bases in the world. These bases are from the US, Japan, Italy, and France, the latter of which is also used by German and Spanish forces. Djibouti’s location at the Bar al-mandeb strait is near Somalia where piracy is rife, giving world powers an excuse to send military forces to the area.
On 1 August 2017 China opened its first-ever foreign military base in Djibouti. It calls it a support base, but within two months of its opening China was conducting live fire exercises. The heavily fortified Chinese base was accused by the US of firing lasers at US military planes, injuring US pilots. China says the naval base has four functions: intelligence collection, non-combat evacuations, peacekeeping support, and counter-terrorism. It is widely seen however as a testing ground for future naval and military bases to protect OBOR.
Camp Lemonnier, the US base, houses thousands of troops and was set up after the September 11 attacks to coordinate US military activity in the region. China’s base is located less than 10 miles away, next to Doraleh port that China allegedly nudged Djibouti to seize, and where China now also has exclusive use of one of the port’s berths.
Djibouti’s infidelity has not gone unnoticed in the West. European news websites have raised alarm bells, with one saying: “China’s overseas military expansion will eventually manifest in the contest between the new world order that China advocates and the liberal international order that Europe both cherishes and wishes to advance.” US defence websites have also called for “a much more aggressive plant to beat China” and US senators have sent letters to their secretaries of state and defence about how China might squeeze US troops’ supply lines there. Israel has asked the US to deploy more troops to Djibouti to counter China.
The Council on Foreign Relations has said that China’s strategy in Djibouti was to mix commercial and military interests. What this means is that Djibouti is playing a geopolitical game much larger than itself, and placed itself in the crosshairs. There is simply no way it will come out on top in the event of a political, let alone military, escalation.
NO END IN SIGHT
If Djibouti thinks it can maintain the status quo where it is playing all sides to its benefit, then it is mistaken. This is not over. In fact, the West is already squaring up against China.
In March 2019, Macron visited Djibouti, Ethiopia, and Kenya to beat back rising Chinese influence.
“China is a great world power and has expanded its presence in many countries, especially in Africa, in recent years,” he said alongside the Djibouti president. “But what can look good in the short term… can often end up being bad over the medium to long term. I wouldn’t want a new generation of international investments to encroach on our historical partners’ sovereignty or weaken their economies.”
The warning went over the heads of the Djiboutis, who still cannot see the danger they are in. One Djibouti government official said: “Business is business. The Chinese invest here, while the French aren’t competitive. The French are late, very late. And they have no money.”
The Djibouti president himself had accused France previously of abandoning their former colony and not investing enough. He most likely thinks he has now found a solution to that problem. If so, he is wrong.
China is intent on eating Djibouti “like groceries.” Djibouti needs to stop chewing khat, and start smelling the coffee.