Djibouti: City Dubai's involvement in developing Djibouti's port infrastructure, customs regime and a free zone is whetting the East African nation's appetite for more foreign investment. Dubai is estimated to be working on projects worth $800 million in Djibouti, changing the country's economic landscape.
And the country now appears more ready to attract foreign investment in industries and vital infrastructure. Talking to a group of visiting UAE journalists, the country's president welcomed Dubai's role in major projects which include management of sea and air transport facilities, customs, development of an oil terminal and Djibouti's first five-star hotel.
"Since our partnership with Dubai our country has become open. We see people coming to invest in banking, insurance and free zone companies," President Ismail Omar Guelleh said.
With scarce arable land, investments made by DP World, Dubai Customs International, Jebel Ali Free Zone Authority and Nakheel are significant for Djibouti's service sector-led economy. "We are looking forward to enhancing our economy" by strengthening relations with Dubai," Guelleh said.
Location is the most strategic asset that this nation of about 700,000 people aims to use as the government tries to create jobs for its citizens and earn revenues for itself.
Sitting at the mouth of the Red Sea, Djibouti is a crucial point for landlocked Ethiopia's trade with the outside world.
When a war broke out between Ethiopia and Eritrea in May 1998, the Ethiopians were forced to use Djibouti ports.
"We neither had the technology nor the infrastructure to handle this huge traffic," said Abdourahman Mohammad Boreh, chairman of Djibouti Ports and Free Zone Authority, recalling his earlier contacts with Dubai that resulted in DP World's predecessor Dubai Ports International signing a port management contract in 2000. Djibouti now aims to establish itself as a transshipment hub in the region.
A bulk petroleum, LPG, chemicals and edible oil terminal, in which Enoc subsidiary Horizon has a major stake, was formally inaugurated last month.
As economic activity increases, creating support infrastructure has become crucial.
Prime Minister Dileita Mohammad Dileita told the UAE journalists the country needs to boost its electricity generation. He said Djibouti would welcome investments from Arab countries to overcome energy shortage.
According to Said Omar Moussa, president of Djibouti's International Chamber of Commerce and Industry, the relationship with Dubai has made "our dream of becoming a commercial centre more real. We are looking at our Arab partners to see if they have the expertise we require. We are no longer looking at Hong Kong and Singapore but at Dubai," he said.
Aboubaker Omar Hadi, commercial director of Djibouti port, sums up Dubai's contribution. "Dubai has done in five years what the French did not do (to help Djibouti) during 115 years of colonisation. And Dubai is doing it without showing any arrogance. That is the difference."
