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European Parliament EUROPEAN PARLIAMENT 1999 2004 Committee on Development and Cooperation 26 April 2004 REPORT of the ad hoc delegation of the Committee on Development and Cooperation on its mission to Djibouti from 20 to 23 February 2004 Rapporteurs: Karin Junker (head of delegation), Michel-Ange Scarbonchi and Fodé Sylla CR\533785EN.doc PE 326.825 EN EN Introduction On 17 December 2003 the Conference of Political Group Chairmen of the European Parliament authorised an ad hoc delegation from the Committee on Development and Cooperation to visit Djibouti from 20 to 23 February 2004, immediately after the seventh session of the ACP-EU Joint Parliamentary Assembly in Addis Ababa, Ethiopia. The political groups appointed the following members to take part in the delegation: Karin Junker (head of delegation), Michel-Ange Scarbonchi and Fodé Sylla. The delegation, a fact-finding and study mission, had the primary objective of establishing closer links with an ACP country which occupies a key strategic position in the area and which has shown a willingness to contribute to the stability of the region. The delegation also examined progress in the implementation of the peace agreement signed in February 2000. The delegation met with the Head of Delegation of the European Commission of Djibouti, the government authorities, including the President of the Republic, the political opposition (not represented in the Parliament), representatives of international forces present in the region, representatives of all United Nations agencies present in the country, representatives of the local NGOs and several members of the Parliament. The delegation also visited the city of Obock, severely affected by the consequences of the civil war. The delegation would like to express particular thanks to the Commission staff in Djibouti, the Ambassador of Djibouti in Belgium, Mr Mohamed Moussa Chehem, and the Vice- president of the ACP-EU JPA, Mr Youssouf Moussa Dawaleh, for their assistance. This report is focused on the main points the delegation would like to highlight. The detailed programme of meetings and visits made by the delegation in chronological order can be found in the annex. Detailed hand-written records of each meeting are available upon request from the Secretariat. 1. Economic and social situation 1.1. Evolution of the economic and social indicators Djibouti is a small country with very few natural resources which suffers from a series of structural handicaps such as limited human and natural resources and frequent droughts. Problems of access to water and energy are generalised all over the country and severely hamper further economic development. The main economic asset of Djibouti is the location, and this fact is reflected in the structure of its economy. Agricultural production is limited to 3.5 % of the GDP, while manufacturing represents just 16 % of GDP1. Djibouti therefore operates a predominantly service-based economy (80.5 % of GDP in 2002), relying almost entirely on two areas: transport facilities and foreign military activity. The presence of French and US troops contributes directly and indirectly to more 1 Official estimates, 2002 (EIU, Country report March 2004) PE 326.825 2/15 CR\533785EN.doc EN than half the country's income and the improved performance of the port and transport sector (mainly railway) accounts directly for one third2. According to the Djibouti Chamber of Commerce of , there are 2 300 registered SMEs, although their contribution to GDP is minimal. Fish export (mainly tuna and seafood) is a sector with some potential but hampered by lack of food processing facilities and access restrictions to European markets based on phytosanitary regulations. Tourism and export of salt are also promising sectors for the future. The economy has experienced two decades of political crisis (regional wars and civil war) and natural disasters (mainly droughts) which have led to a 25 % reduction in GDP in comparison with 19843, while the main human development indicators show the steady deterioration in the social situation. The structural adjustment programmes followed since 1996 in the framework of IMF stand-by agreements and supported by an IMF Poverty Reduction and Growth Facility (1999-2002) have given some encouraging macro-economic results in terms of budget and commercial deficits. However these results have not been able to stop a deterioration of the social situation. According to the 2002 household survey4, about three-quarters of the population now live in a situation of relative poverty, and around 40 percent live in extreme poverty5. The marked deterioration in poverty indicators between 1996 and 2002 was accompanied by an increase in unemployment from an estimated 45 to 60 percent. Social indicators in education, health and access to water remain very low: Djibouti ranks 153 on the Human Development Index (out of 175 countries). To face this worrying situation, the Government of Djibouti elaborated (through a relatively broad participative process) a draft Poverty Reduction Strategy Paper (PRSP), finalised in December 2003, which offers a realistic assessment of the general poverty situation in Djibouti and identifies vulnerable groups that lack access to essential social services. International donors (including the IMF6) have broadly welcomed the analysis and strategy of the PRSP, which shows the determination of the government of Djibouti to fight against poverty with a realistic plan fully owned by the government. All the Ministers met by the EP delegation referred to the PRSP as the basis for government strategies and decisions. The Finance Minister confirmed that the main part of the national expenditure will be devoted, in the following order of priority, to education (30%), health, development of energy resources and security. 2 idem 3 Poverty Reduction Strategy Paper of Djibouti, December 2003 4 idem 5 In 1996 less than half of the population lived in relative poverty, with 10% living in extreme poverty. The relative and extreme poverty thresholds in Djibouti were estimated at USD 3.3 and USD 1.8 per capita and per day, respectively. 6 IMF Country Report No.04/73, March 2004 CR\533785EN.doc 3/15 PE 326.825 EN 1.2. The port of Djibouti: enormous potential Djibouti is successfully exploiting the strategic position of its port. As the main harbour of the region, it has seen a dramatic increase of import/export goods processed, mainly as a result of the border conflict between Ethiopia and Eritrea (overall Ethiopian cargo has risen from 30 % of Djibouti's total traffic to 70 %). In June 2000 the Djibouti authorities decided to delegate the management of the port to a private company, Dubai Port International (DPI), which has proven so far to be a wise decision The volume handled has increased from around 100,000 TEUs7 a year in 2000 to 242 705 TEUs in 2003. DPI is investing in new handling equipment to increase the port's capacity to 400 000 TEUs a year, as well as in a master plan to develop Djibouti Container Terminal, Free Zone and Logistics Centre and an Oil Terminal in Doraleh. Despite an evident improvement of handling capacity, there are two remaining obstacles to efficient management of the port terminal: long customs procedures by Ethiopian authorities (the main client), which on average keep lorries waiting for two weeks, and the lack of modern transport infrastructure (railway and road connections). 2. Djibouti in the international context 2.1. Massive presence of foreign military troops The strategic position of Djibouti, close to many of the key "battlefields" of the war on terror, has resulted in a deepening of relations with the US and other Western countries. In addition to the traditional presence of French troops, Djibouti has received massive numbers of forces coming from other Western countries, mostly from the US in the framework of Operation Enduring Freedom. International troops are grouped under three commands: French forces, United Sates Combined Joint Task Force - Horn of Africa (CJTF- HOA), and the international Task Force 150 (TF-150) which gathers naval forces from six countries (UK, France, Germany, Italy, Spain, United States) under rotating command (every three months). The mission statement of the US Combined Joint Task Force - Horn of Africa (CJTF- HOA), as described to the EP delegation by its Commander Brigadier General Mastin M. Robeson and as recalled in its official homepage8 is "to disrupt and defeat international terrorist groups in the (Horn of Africa) region posing an imminent threat to the U.S., its allies, or their interests". The region covered by the US mandate "officially" includes Kenya, Somalia, Ethiopia, Sudan, Eritrea, Djibouti and Yemen and "non officially" Uganda, Tanzania, Seychelles and the Comoros. US troops deliberately distance themselves from Djibouti internal politics, as well as from regional conflicts unless there is a direct link to war against terror. However, they assume that their presence is, on its own, a powerful deterrent, preventing both internal and regional conflicts (i.e. Ethiopia-Eritrea). As regards Somalia, Brigadier General Robeson qualified the situation as very complex, since the territory is a paradise for terrorists. The mission of the US CJTF-HOA troops in Somalia is to capture or kill terrorists without endangering the problem 7 Twenty foot equivalent units 8 http://www.cjtfhoa.centcom.mil/default.asp PE 326.825 4/15 CR\533785EN.doc EN of Somalis. Robeson expressed his belief that the US intervention in Somalia will not follow Afghanistan' or Iraq' patterns. The EP Delegation visited the US base in Camp Lemonier, a former French Foreign Legion post owned by the government of Djibouti and rented to the US authorities, after complete renovation, for a not disclosed annual rent9. The total CJTF-HOA contingent at Camp Lemonier now numbers more than 1 800, representing all branches of the US armed services, coalition military members and civilian personnel. Regarding the French army, 2 800 troops representing land, air and naval forces are currently based in Djibouti, constituting France's largest overseas military base.
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