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The Rise Djibouti continues to keep great relations with major powers including the United States, EU, United Kingdom and China, ensuring its national security as well as its positive global economic ties. The government of Djibouti expands its trade development sector and is able to bring down the staggering near-60-percent unemployment rate with the creation of new jobs in the ports. Also, the government of Djibouti takes a strong stand and asserts that its domestic laborers will be involved in the construction projects funded by foreign FDI and tens of thousands of Djiboutians can find work in this area. The government receives help from the World Bank, as well as other global financial institutions, to cultivate its geothermal energy potential. This project will allow for a drastic decrease in the price of electricity from $0.24 kwh to $0.10 kwh, taking some budgetary strain off of businesses and citizens. This transition to geothermal power frees up $57 million, which does a great deal to ease the government’s budget deficit. Djibouti also continues to strengthen ties with Ethiopia and South Sudan, cementing its role as connection between their markets and the global economy. Trade financing companies from around the world open offices in Djibouti to take advantage of the influx of shipments from around the world. This influx of money benefits Djibouti’s already-growing financial sector (brought about by free circulation of capital, an absence of exchange rate controls and a now-higher amount of Djiboutians who have money to put into banks). Private shipping companies spring up to manage the transportation of goods from the ports to Ethiopia. All of this increased economic activity means a lowering of the unemployment rate (especially when the population is so small) and a creation of a middle class in Djibouti. There is also a rise in activity in the private sector from the creation of “finished product” manufacturing in the form of factories to process livestock products like meat and skins coming from Ethiopia, lumber mills for South Sudan’s lumber and refineries for South Sudan’s oil (presumably this will be some form of public-private joint venture given the scale of project required). With the creation of new infrastructure and the arrival of new businesses to the area, microfinance non-profits like Kiva and Accion start receiving requests from Djiboutians interested in starting their own businesses. The tide turns over from relief-based aid to microfinance, as the business environment is brought to life. Spillover Effects in the Region Djibouti’s rise will have a positive effect on South Sudan’s transition to a sovereign state. It provides a secure and relatively cheap way to get South Sudan’s oil and other commodities for export onto the world market. The rise of Djibouti will also increase the connection between South Sudan and Ethiopia, since South Sudanese goods will travel through Ethiopia and the two states will inevitably embark on co-managing infrastructure projects. Djibouti’s rise will be most beneficial for Ethiopia. The more trade that moves through Djibouti’s ports, the more streamlined and cheap the process will become, greatly reducing the time/cost of Ethiopia’s exports onto the world market. The better the processing of goods and services become in Djibouti, the more FDI will flow into Ethiopia in the form of capital investitures for businesses, as well as foreign workers bringing with them the skills and expertise that Ethiopia needs to become more competitive economically. The one downside for Ethiopia will be that Djibouti, with the new ventures into geothermal energy, will no longer need to import much of Ethiopia’s hydroelectricity, but this slight downside pales in comparison to the positives. Somalia will quickly become completely outmatched by Djibouti’s shipping industry and any shipping taking place from its ports will necessarily shift north. There will also be a major exodus of Somalis from Somalia, once the economies in Djibouti and Ethiopia start picking up. With better infrastructure, more jobs and a more secure living environment, the two countries to the north will offer undeniable opportunities for Somalis looking to better their situation. The one benefit for Somalia will be a drastic reduction in the number of pirates in Arabian Sea and Gulf of Aden shipping lanes, as countries with increasing investments in the region (China in particular) will step up their naval patrols to protect their ships. Similar to the effect on Somalia, Djibouti and Ethiopia will likely draw large numbers of immigrants from Somaliland. With Somaliland’s relative closeness to Djibouti, it could benefit from positive externalities in the form of increased business activity in the area and better transportation infrastructure, bringing in more FDI to tap into the country’s mineral deposits. Djibouti will also serve as a role model for Somaliland, showing it the necessary steps to become a successful export country. New Role in Africa By the year 2030 Djibouti will have taken the undeniable position as the leading port in East Africa, surpassing Mombasa, Kenya. The presence of a modern and efficient port in the region will greatly increase economic participation of East African countries and, in particular, South Sudan and Ethiopia. The creation of a manufacturing sector for processing raw goods coming from Ethiopia and South Sudan will provide much needed jobs to Djibouti’s largely unskilled labor force. With such a small population, Djibouti will see its per capita GDP rise quickly and it will provide a model of economic openness for other small, coastal African countries. Countries investing in this area will see increasing return on investment as they tap into previously unavailable markets and resources in the region. One thing the government of Djibouti must refrain from doing is forcing these new economic benefits to remain in the public sector with large, inefficient state-owned enterprises. Allowing private participation in this new marketplace will allow for a more widespread disbursement of economic benefits and will provide more room for job growth and a better management of investment funds. Also, the government should quickly remove any repressive appearance it may have because it does not want to let any sort of popular uprising ruin its ability to take full advantage of its perfect location and the economic benefits that come with it. Wikistrat Analysts Ron Gray, Brian Chao, Dr. Emanuele Canegrati and Keith Hilden contributed to this scenario.

No; but I do appreciate beaches, greeneries and world unique geological places (the latters happen to cluster in Djibouti for geologists interest). Ayanleh Suleiman, Mo Farah friend and world class athlete, the most recent local distinguished on worldwide tracks (in the tradition of Ahmed Salah etc) Djibouti Among Most improved economies in the World Bank Doing Business 2014 rapport Category Lower middle income Population 859,652 GNI Per Capita (US$) 1,523 Change of Rank: 160 to 172; 12 Djibouti: Africa’s Next Trade Hub EDITOR’S NOTE: Wikistrat recently concluded a geostrategic simulation titled “The Rise of Africa”. In this crowdsourced simulation, Wikistrat asks its strategic community to tell the specific story of how one African nation represents a “Risen Africa” in the year 2038. Here’s the story of how Djibouti may represent a model Africa in the next 25 years. Backstory Djibouti has served as the main port that connects Ethiopia’s economy with that of the rest of the world since the Ethiopia/Eritrea war eliminated Eritrea as a port for Ethiopian goods. At the start of the 21st century, the vast majority of Ethiopian exports traveling through Djibouti were coffee, salt and animals, but that changed with the maturation of the Ethiopian economy in the 2010s. Chinese foreign direct investment (FDI) in Ethiopia had begun pouring in in the early 21st century, and by the 2010s, that aid began providing great dividends. In 2013, Ethio Telecom signed a major deal with Chinese mobile provider ZTE to upgrade the telecommunications infrastructure in Ethiopia. These advances in the telecommunications industry allow Ethiopia to become more active in the global economy, setting up web server hosting sites and call centers, taking advantage of cheap labor costs. This in turn brings about a strong middle class that demands imports of goods from around the world. Given Ethiopia’s landlocked position, these new imports/exports bring increased economic activity to the ports of Djibouti. Djibouti also begins constructing processing factories to prepare the largely unprocessed animal skins and hides coming out of Ethiopia, as well as factories to prepare the meat coming from Ethiopia so that it is ready for shipment. South Sudan has plenty of oil that it is itching to get onto the world market after its independence in 2011. Since it cannot export the oil out of Sudan’s ports, it needs to find another port of connection to the world market. South Sudan’s government decides that it will send its oil through Ethiopia to solidify connections with a strong military power and out through Djibouti, for its cheap cost of export. At the end of 2013, the three countries sign the deal. Djibouti not only benefits from increased economic activity, but its transportation infrastructure also gets a makeover from the South Sudanese government, which wants to make sure that its oil finds its way efficiently and safely to port. Djibouti also gets assistance from South Sudan to open oil refineries to take the place of those used in Sudan before South Sudan’s independence. This, in turn, creates more jobs for the people of Djibouti. This economic relationship will go beyond the realm of oil into all other products that South Sudan would like to export to the world market (Kenya’s export/import fees being higher than Djibouti’s and Somalia being much less of a secure shipping port). Djibouti has managed to stay out of any intergovernmental trouble in Africa and, aside from a small border dispute with Eritrea, enjoys favorable relations with the surrounding states in the area. As a hosting site of French, U.S., Spanish and Japanese military bases, and the EU Atlante Operation, it does not have to worry about any threats to its sovereignty from outside powers. In addition to hosting military bases, it is the entry point for humanitarian aid operations for all of eastern Africa. Its own government is relatively stable and, aside from demonstrations surrounding the elections by disgruntled opposition candidates, it sees very little internal political struggle. The International Monetary Fund has called Djibouti’s financial sector healthy and notes that it has great liquidity. The government also stays on top of bank regulation and, in 2011, set out a slate of bank requirements, which it is faithful in monitoring. The government is not perfect, however, as some criticize it for its repressive policies in the media realm, and it has some work to do on its current account deficit. Overall, these governmental factors give Djibouti a solid base for its rise to international importance in trade in the 2020s and ’30s. With Chinese FDI pouring into Ethiopia, China takes it upon itself to bolster its connections with Ethiopia in the form of building up the export/import capacity of Djibouti. In 2015, China begins a major investment program in trade infrastructure in Djibouti. This includes creating two new major ports in the Gulf of Tadjoura, as well as upgrading the roads that connect these ports to Addis Ababa. China also sets up a naval base in Djibouti in 2016 to protect its shipments from pirates in the nearby waters and to expand its influence on the African continent.

30% for a 20 years lease seems fair or standard given the sums to be invested and inherent risks; the productivity in Djibouti port post Dubai takeover rose markedly (discipline, transparency etc) but clan balance is more delicate in Somaliland and local politics more fragile (not yet as strong as state with virtual monopoly on force and foreign backers). The Berbera port and corridor represent almost half of the major infrastructure investment required in Somaliland and major towns are clustered around the corridor and few outside. Another advantage is that cheap Ethio hydroelectricity is easily available as well as top notch telecom links via cables through Djibouti which act as a regional hub in that area too. The remaining challenges would largely be to maintain the current anti-corruption drive that saw the Sland central budget grow fourfold within 3-4 years and raise fiscal pressure on the very lucrative remittances or telecoms companies as well as the traders, local elite and diaspora so to ensure equality, inclusive growth or access to public services for those unable to pay for private providers (not growth for the well-connected).

1. (SBU) At a September 16 dinner organized by the French Ambassador, representatives of the French firm Bollore Group briefed the British, EU, and U.S. heads of mission on a proposal to rehabilitate and operate the port of Berbera in Somaliland. The Bollore Group representatives reported that the proposal had been in development for months, and that a draft of their final proposal had been presented to Somaliland President H.E. Dahir Rayaale Kahin earlier that day. The company representatives and the French Ambassador also indicated that the proposal has the firm backing of the Ethiopian government, including PM Meles. 2. (SBU) In brief, the Bollore Group proposes substantial investment to rehabilitate Berbera,s port infrastructure including quays, storage, equipment, and organizational overhead and systems, with subsequent operations of the port to be handled by a new company with equity shares held by the Bollore Group, the Somaliland government through the Berbera Port Authority, and the Ethiopian government. While the company representatives were vague regarding specific shareholding arrangements, they indicated that the Bollore Group would hold a sufficient percentage as to assure management control and sound commercial practices. (Comment: The implication of the presentation was that negotiations remained regarding specific share interests. End comment.) The company indicated that their business plan was based on a goal of attracting 30 percent of the traffic in the area over 10 years, primarily consisting of imports to Ethiopia with some export traffic, in direct competition to the area,s current primary port in Djibouti. The Bollore Group already operates or supports a number of African ports, and through the new Berbera port company would help facilitate customs and transit procedures in Berbera and Ethiopia, the latter with support of a &dry port8 facility to be built at or near the border. As well, the Bollore Group will help develop a commercial and marketing strategy for the port and transit corridor. 3. (SBU) In response to questions, the company representatives were very firm that insurance rates had already been secured through Lloyds that would provide adequate coverage at competitive rates, and they appeared confident that they would be able to match or beat Djibouti port rates and services relative to Ethiopian traffic. Among other items, they noted a commitment to provide priority berthing to respond to Ethiopian Shipping Lines (a state-owned enterprise) recommendations to ensure good Ethiopian shipping services. 4. (SBU) Discussions suggested the two major risk considerations for the Bollore Group were adequate security conditions to be provided to the port, apparently largely to be supplied by the Somaliland government, and the road running to the Ethiopian border. The Bollore representatives reported they had undertaken an assessment of the road, and it would clearly need upgrading and reinforcement to handle effectively the anticipated traffic loads. Development of the road was not included in the Bollore proposal, with the suggestion that the Group was looking to potential donor funding, specifically European Union financing, for this project. 5. (SBU) The Bollore Group's proposals were supported by extensive documentation and plans. The group reported strong support in Somaliland and Addis Ababa, and they appealed for general support for the project by European and American governments. 6. (SBU) Comment: Obviously the idea of a viable second ocean port outlet would be appealing to the GOE. Enthusiasm in Addis for the project would be fairly easy to generate, particularly if such support came at low financial or other risk to the GOE, which would seem to be the case. Likewise, if successful the port operation would almost certainly become the primary source of revenue to the Somaliland government, presumably with attendant support from that quarter. It is unclear what significant commercial arrangements would remain to be negotiated beyond the specific share composition of the new port operating company, but the Bollore company representatives did not appear particularly concerned on that score. The major remaining variables clearly center on minimally acceptable security conditions, and the corridor road development. In fact, the ADDIS ABAB 00002285 002 OF 002 Managing Director of Ethiopian Shipping Lines recently expressed concerns about these two issues to Embassy officers. If the latter is assured by the EU and/or other donors, the major remaining factor would seem to be an assessment of security conditions. The Bollore Group reps indicated the Group is no stranger to questionable operating environments in Africa, including security issues, but the Group obviously still is keeping an eye on this area. No specific requests were addressed to the U.S. government during the presentation, although EU support for the road, and active British support were clearly desired. End comment. MEECE http://www.wikileaks.org/plusd/cables/09ADDISABABA2285_a.html

Sarah Phillips explores Somaliland’s approach to peacebuilding and asks if donors have overlooked the importance of secondary education in development. By: Sarah Phillips When Somalia’s government collapsed in 1991, violence engulfed much of the country for over two decades. But in Somaliland – a self-proclaimed republic in Somalia’s north-west – the story has been quite different. Its leaders managed, in fits and starts, to negotiate an end to large-scale violence within six years. Travelling through Somaliland now – something still impossible in most of Somalia – one is struck by the strength of popular pride in the achievement of peace and relative security. So how has Somaliland managed to establish and maintain its greater stability? My research on this question for DLP highlights three particularly important factors: a domestically-funded peace process that motivated cooperation among elites; Somalilanders’ conscious desire for an enclave of peace within the surrounding turmoil; and quality secondary education. Elite cooperation At the launch of the new $60 million Somaliland Development Fund (SDF), the Danish Ambassador noted the “leadership and ownership” demonstrated by Somaliland. Yet this ownership was partly fostered by an initial lack of international support: the Government of Somaliland’s unrecognised status made it largely ineligible for official international grants and loans, or political or military assistance. The lack of external funding motivated strong – though arguably collusive – cooperation between Somaliland’s politicians and business leaders to secure the money needed to disarm militias and bring greater stability to the country. This stood in obvious contrast to Somalia, where successive governments and peace processes have been substantially underwritten by external political and financial support. In Somaliland, President Mohamed Ibrahim Egal used loans from private businesses to demobilise the clan militias. In exchange for loans towards his state-building project, Egal gave business leaders not just a more stable environment in which to operate, but generous tax exemptions and opportunities for extraordinary profits. For example, in 1994 Egal used such loans to print a Somaliland Shilling, to underline Somaliland’s proclaimed independence. He then declared the old Somali Shillings illegal in Somaliland, selling them to his creditors at fire sale prices in exchange for hard currency. His creditors then resold them very profitably across the ‘border’ in Somalia. While such arrangements didn’t conform to ideals of inclusivity, they did foster ownership of Somaliland’s peacebuilding process among the business elite – who literally bought in to it. Looking forward, it will be interesting to see how the Somaliland Development Fund affects Somaliland’s future, and whether it succeeds in its aim of giving the Somaliland Government “ownership over how and where the funds are spent”. Peace above all else The loans that Egal received from the business elites were (and remain) widely accepted within Somaliland as legitimate. Part of the reason for this seems to be a powerful idea that continues to permeate society and shape political change in Somaliland: the value of peace above all else, something almost certainly underwritten by the trauma of war. For Somaliland, the maintenance of peace is the gravitational centre around which all other political and economic considerations orbit. On this basis, peace is exchanged for relatively exclusive access to the key drivers of economic growth. Despite their pride in Somaliland’s achievements, Somalilanders fear its internal combustion. Somaliland’s dominant political narratives revolve consistently around the notion that peace is fragile, that its maintenance requires a continual effort from everyone, and that its maintenance is a reflection of the Somalilanders’ exceptional nature. During my research I often heard people comment that Somaliland “works because Somalilanders want it to work” and that it “runs on trust”. Rituals of trust are an important component of peace and security in Somaliland: if people don’t trust that others are as invested in maintaining peace as they are, it can quickly collapse. I watched one such ritual unfold when I asked to enter the grounds of Sheekh School to do some interviews. Behind the school fence sat a couple of guards who would not allow us to enter until we could demonstrate that there was a personal connection linking us, on one side of the fence, to them on the other. My Somalilander friends began calling person after person, moving through a chain of acquaintances and then strangers, until they found someone who knew one of the guards personally, at which time the gate was opened. It was a theatrical display, revealing a very constructed idea of security. The people on the other end of the phone clearly did not know me (or my friends) and so could vouch for neither my integrity nor my purpose. Presumably, they could not actually be held accountable for my actions once inside either. In fact, what seemed to be happening was that my friends and the guards were acting out the ‘discovery’ of a previously unknown personal connection between me (the outsider) and the local community. However obviously strained this discovery was to all observing, it was nevertheless vital to perform it in exchange for entry. The role of secondary education The reason for my visit to Sheekh Secondary School was the striking influence of its graduates – as highlighted in my research – on Somaliland. I found that a disproportionate number of the politicians, activists and technocrats who helped establish Somaliland’s stability had attended it. Among Sheekh alumni are all but one of its four presidents and all three of its vice-presidents. When I asked why Somaliland had leaders who were relatively effective at negotiating and maintaining peace, the answers often included Sheekh School. My findings suggest the significant role of quality secondary education in forming leaders who promote development. Sheekh School was a privately funded boarding school that gave free tuition to the top students in Somaliland. On the basis of merit, it offered students from different backgrounds training in critical thought and leadership, networks of trust outside the clan, and pathways to higher education abroad. One of its graduates lamented that foreign development practitioners overlook its importance: “We used to say to the international community [that] all we need is three Sheekh Schools… The international community is fixated on primary education and on literacy, which is obviously important but there is no focus on educating the elite… We all know what they think is important, and that that is short-term training programs, and these are not futile but they also are lacking in many areas.” Somaliland’s Minister of Planning noted that while donors have funded some buildings for secondary schools in the territory, investment in the quality of the education provided has been lacking: “We have quantity but not quality.” These comments are timely in the light of what seems to be growing interest among donors in expanding the current, MDG-oriented, focus on primary education – to include higher education, for example. Findings from both Somaliland and from forthcoming DLP research in Ghana suggest the value of investment in quality secondary education and tertiary scholarships. Secondary education didn’t make the list of initial priorities for the Somaliland Development Fund – unsurprising, perhaps, given the pressing needs elsewhere. But in the long-term, investment in secondary education would play a significant role in increasing government capacity to achieve development objectives: it could be more relevant than at first appears to the SDF’s aim of enhancing core state functions. About the author Sarah Phillips Sarah PhilipsSarah Phillips is a Senior Lecturer at the University of Sydney. Her work focuses on politics, development and security in the Middle East and the Horn of Africa, particularly Yemen and Somalia/Somaliland, and on the politics of state-building. Somaliland Road to Peace

Mandela’s Socialist Failure Interesting; it's true that S African companies huge wealth mostly gets invested overseas and little changed for the masses... His universal glory is also a sign that he really didn’t disturb the global order of power http://opinionator.blogs.nytimes.com/2013/12/06/mandelas-socialist-failure/?src=recg

N.O.R.F;990799 wrote: Good news. Let's hope this happens as it would make SL strategically important for the Ethiopia-China trade corridor. There was the usual suspect Bollore but it seems confirmed now by the bilingual regional intelligence network; let's hope those French monopolising African assets will build/lease to at least similar standards and environmental norms as Dubai Ports in Djibouti: 08/11/2013 The Indian Ocean Newsletter N°1367 SOMALILAND Bolloré pushes for port deal before 2015 The French group is keen to sign the contract for operation of the port of Berbera before Somaliland’s presidential elections in two years’ time. [187 words] [€5,2] MENTIONED IN THIS ARTICLE: Bolloré Africa Logistics | Ahmed “Silanyo” Mohamed Mahamud | Ali Ismaël Hassan | Eric | Melet | Jason Reynard | Richard Mugni | Simon Minkowks africaintelligence.com Why the eagerness before Silanyo end of term though and what about Chinese numerous stakes in the heavily upgraded Djibouti-Addis corridor (ports shareholding, huge rail project etc)? Would the Ethios supply cheap hydroelectricity too as in Djibouti? Surely, such a milestone towards infrastructure and local economy should be as public as possible even though the current team in Sland seem more transparent...

Arta Resort Town, on fresher altitude:

Kaluun;988447 wrote: Samale did amazing job on the budget as the minister of finance and has huge support in SL. The question remains, will Ethiopia support him? Personally I was part responsible for campaign against him (supporting al Shabab and so forth). I think the damage has been done. I have to admit he is more productive than Bihi but I don't think party leadership suits him. He is better for the nation as a minister. Are you saying Samale is one of the decent public figures but can not be the top leader because of alleged "terror" links and Addis? Any proof of links with Al Shabab? And is there any point in or real independence if leaders get first Addis approval stamp?

Rwanda, despite very high density (arable land per capita is much more limited) and challenging geography (enclaved), as well as an overextended military, is now one of the world fastest growing economy as well as one of the top emerging Business spots (even beyond Africa). It is progressing faster because of their better management and leaders with a vision and lower tolerance for corruption, that also partly compensated the difficult circumstances: "Moreover, literacy rates for the 15-24 year olds, a proxy for the efficiency and quality of the education system, have improved from 76.8% in 2005/06 to 83.7% in 2010/11. Vocational education has benefited from an increase in the number of training centres from 98 in 2011 to 116 in 2012. As a result, enrolment increased by 15% to 13 303 students. Health: The share of public spending on health (including donor support) has increased from 10.2% in 2009/10 to 16% in both 2010/11 and 2011/12. The successful implementation of the Community-Based Health Insurance scheme introduced in 1999 has improved access to health services. The scheme covered 91% of the population in 2011/12, 1 percentage point above the target and a substantial increase from the 35% recorded in 2006." africaneconomicoutlook.org This clearly shows that by focusing on equality and access to basics such as healthcare, water and litteracy, tremendous progress within a short time is possible (eg, Rwanda GDP per capita almost quadrupled since the genocide in 1994); a vision and quality leaders are essential for the local masses's quality of life to metamorphose from very difficult to semi-decent (firmly on track into the middle-income club). PS It seems Ethiopia and Rwanda have both relatively low levels of corruption at the admin level, Eritrea seems to share this aspect too, with Asmara being very clean and well organised in comparison to many other African cities (this plays a role in East Africa record levels of growth on par or higher than Asian levels).

Meeting the challenge of promoting pro-poor investment in Somaliland ((theguardian)) [...]A small but growing number of investors, mainly from the diaspora but also numbering amongst them those from further afield, are making their first, tentative moves. Early in 2012 a Djibouti-based firm (Somaliland Beverages Industry, part of the Osman Guelle Farah Group) invested $17 million in a Coca-Cola franchise and bottling plant – the largest single investment in Somaliland since 1991. UK-based investment fund Invicta Capital and Jacka Resources, an Australian firm, are currently preparing an investment in oil exploration and development. Two further investment funds, based in the UK and Kenya respectively, are considering their options, and Chinese ICT giant Huawei is actively involved in the expanding mobile market. [...]Thirdly, the bulk of economic activity is concentrated in a small number of sectors and dominated by a handful of large and well-connected players. The Indhadeero Group, for example, is not only the largest animal trader in Somaliland but also has businesses in light manufacturing, food retail and hospitality, whilst the group behind Daallo Airlines, an international airline based in Hargeysa, also owns firms in livestock and logistics. Such monopolistic tendencies hamper competition and new market entrants and weaken market governance." ................................................................... Q&A: Unpacking Somaliland’s business potential(howwemadeitinafrica.com) Len Tiahlo is the co-founder, co-director and secretary of the Somaliland Development Corporation (SDC), a UK-based organisation dedicated to facilitating international investment into Somaliland (howwemadeitinafrica.com): [...]The SDC is working to build up new business in this sector, initially through the exporting of hides and skins from Somaliland to Ethiopia, with a British leather goods company being a potential buyer. Building a trading link between Somaliland and Ethiopia is potentially [the] most attractive agenda. Ethiopia has a population of about 90 million, with a GDP [growth] of 10%+. Major infrastructure developments (including the availability of hydroelectric generated power) are underpinning local economic growth that is placing the region towards the top of the economic power houses of Africa. [...]The potential to trade livestock slaughtered for chilled or frozen sale opens up major new markets in Ethiopia and beyond, to Malaysia and Asian markets. This potential is best realised initially as with the SDC approach of operating via Jigjiga, where electrical power is in cents per kWh versus Somaliland cost of power presently in the range of US$1.3 to $1.5 per kWh. Somaliland does of course have potential oil and gas resources, though these have yet to be proven. This investment sector has in the past attracted the less established oil companies and, as elsewhere, the reality of oil and gas exploration is that it is a long term highly capital intensive investment, with high risk that typically is the reserve of major corporations, which in turn have the technical capacity to do the work as well as the asset spread to diversify risk. In this regard, the SDC is on record as having the agenda to open up dialogue with the major oil companies that have held concessions in the region and to develop good relationships with the local communities where future oil and gas exploration and hopefully development activity is likely to take place. Presently economic growth is coming from local and diaspora Somali investment. The investment into the extension of the optical fibre system from Djibouti through to Somaliland is a good example. You may be surprised to know that just 10 minutes from Djibouti lie offshore islands that offer unique boutique resorts potential, so eventually there is the potential for the establishment of high end tourism." PS It looks like, indeed, good old tomatoes horticulture (green pepper seems extremely lucrative) holds massive returns very quickly with drip irrigation ect.

OdaySomali;984535 wrote: Ive managed to obtain a copy of the budget and, as I suspected, its a hot mess and fraught with error. As with the rest, it's a work in progress; however, they used the sudden, huge increase in revenues to double salaries and proclaim free primary school for all. Whether it is the optimal use of scarce resources is open to debate as school vouchers, low fees private schools, or focus on subsidising vocational training, esp. in priorities rural needs such as irrigation are all well-researched fields. It can be the worst of both worlds, very low quality public schools that monopolise public funds in the same way as the vastly oversized security and administration costs. Again, this would fail in promoting equality as the elite or better-off can pay for private lessons (law of the jungle or only the stronger having access to basic necessities). The other issue about other countries experiences, in particular those diabolised but with well-known achievements in equality, health or education, is that much of it is glossed over. Eritrea, albeit crippled in many ways, atill seem well run for a sub sahara African country and commended for its healthcare or education achievements (among others) despite almost no aid, harsh environment and very short existence. In the case of Djibouti, there are lessons too; taxes are very low for investors actually and it's trying to collect taxes more efficiently (with some progress). They manage to get high spending per capita for an African country but there is still plenty of scope to tax further the local elite or businesses (those non priorities sectors that get high margins without major investments). The country just gained 12 places in the World Bank Doing Business report within a year, so very quick gains are realised again just through better management and simplification: Doing Business 2014 data for Djibouti. It's funny how a country can almost overnight metamorphose into a middle-income country with respectable infant mortality and litteracy rates, all with minimal investments if public will is present (just better water access and hygiene change a lot instantaneously). .................................................................. Message from the Minister of Trade and Investment [...]Somaliland has deepened its economic engagement with foreign governments, both within the region and beyond. With Ethiopia, Somaliland is engaging in negotiations to finalize their first official bilateral strategic cooperation agreement. Djibouti has invested heavily in Somaliland’s economy, including investing roughly $15 million in a Coca Cola factory last year. Somaliland has used diplomacy to help facilitate FDI from Turkey, the UAE, Egypt and China into Somaliland’s key sectors such as livestock and fishery. Thanks to stringent public financial management, increased tax revenue and more safeguards against corruption, Somaliland’s 2013 budget is the largest and most balanced in its history. Moreover the government has no debt. Our children receive free primary education; we are expanding medical services and water distribution in urban and rural areas; and our mobile banking and money transfer industries have allowed for commerce to flourish.[...] (Dr. Mohamed A Omar) .

There are many caveats, eg rural production (at their market value) such as milk are overlooked, but the GDP per capita will probably be very similar to that of Kenya, Eritrea (roughly $700) etc. Of course, given that much of the production is discounted, those figures are somewhat arbitrary but they are a rough guide to what can be more easily taxed, or potential state revenue. In final analysis, one guess is an interval of $750-1500 (without rural incomes); which means that a very moderate taxation rate of 15% could potentially yield annual state spendings of around $100-225 per capita (some countries in the region have much higher taxation rates: eg at 30%). And Djibouti has an annual state spending of roughly $700 per capita, again with all the caveats and minor tax collection; there is thus absolutely no reason to attain a level similar to that of eritrea at roughly $200-250 or a third of the Djib level within a ten years period (the least ambitious scenario). Also, Eritrea generates steady state revenue through diaspora taxation, which helps in the face of minimal foreign aid but impressive records for an African recent country. As anyone well acquainted with the region know, there is no very high disparity between the economic activity levels of djibouti and that in the Western Somaliland region in particular, as Djibouti advantages of higher port and foreign rents revenues is compensated by its less free entreprise system of monopolies or higher costs. Thus, an upgrade of irrigation & beekeeping or construction (low-cost, appropriate technology), the major foreign currencies earner of cattle export resumed, linked meat and hides processing etc as well as better tax collection with increasing rates will easily match the current high growth on the other side in both the GDP and state budget. The importance of all that is not just the figures or even growth, already very high in Ethiopia and East Africa in general, but the potential to lower transport, water and power costs through public-private partnership, multiply rural incomes through irrigation etc, but above all, to deliver basic nutrition and public services in primary care or essential skills to those that can not afford the booming private sector. PS there is this interesting Somalilandinvest.net under the direction of the other forward looking minister of trade, Dr. Mohamed A Omar. No politics please, it's all about budgets and how best to ensure basic services to the masses or equality.

OdaySomali;983843 wrote: Have the accounts been audited? Are the figures which are published to the public figures that give a true and fair account of the financial position? I highly doubt it. The figures from 2010 onwards are much more credible given the credentials of M. Hashi and his successor Abdiaziz Samale (better collection and less corruption doubled the state budget within a year). An average annual growth of 4% since 2000 and a GDP per capita of $500 seems the minimal limits, to have a guess, but statistics and taxation capability are still low.

Somaliland Budget Growth & Statistics It is now common to revise GDP and other figures in the African context, leading to gains of 40% in some cases (Nigeria, Ghana ect) but even at their current level there seems to be serious discrepancies. If we consider the current figure of Hargeysa central State budget of $152 millions (not including local, regional or other revenues), which has markedly increased since 2010 thanks to a major anti-corruption drive and better management (spearheaded by eng Mohamed Hashi), this level of income seems surprising on many counts. First of all all, it's very hard to believe that the relevant taxation level, with all its exemptions and remaining inefficiencies, can represent more than 5-7% of the total GDP (all the consumption or production within the country). It's expected that the central state taxation level in Somaliland will increase from 11 to 15% (in theory, since collected revenue has been much lower in practice). So does that means that Somaliland, or parts of it, are already or well on track to becoming "middle-income" zones (Djibouti with estimates of roughly $1600 GDP per capita has already became a lower middle-income country in the relevant jargon). Of course, there is also plenty of scope in raising further the state revenues while the economy is still at infancy stage in some ways: eg, Eritrea collect contributions from its diaspora (a major source of revenues for the state) etc. The interesting issue is that, theoritically, it's now largely possible to fiannce primary healthcare, basic litteracy, water & irrigation schemes and even some infrastructure out of central revenues, which is much more sustainable and accountability inducing. Budget Growth from 2010 to 2014 ($US millions) 2010: 47; 2011: 88; 2012: 108; 2013: 126; 2014: 152

Djib-Somali Mo Farah Trip and Unprecedented Welcome by All sectors of Society Almost a week of meeting with Pres Guelleh (who gifted him with the highest honor national medal), university students, local fellow athletes of international stature etc.

OdaySomali;982161 wrote: Thanks Abu Salman, I do have a few questions. 1. How would you avert land speculation? 2. How would training a civil service make the money go further? We are not seeking to play or replace government or directly provide public services per se. What do you think about investing the in reproductive assets i.e. assets from which a financial return is made? 3. In reference to water resource management, could you provide some examples/links of Public Private partnerships? This sounds very interesting. 1. Land speculation could be countered via public land ownership (as per Islamic Law), it could be leased for definite period of time and ideally rationed as done in other places; yet another very efficient remedy would be Land Taxation, a most equitable form of taxation that would adress the speculation scourge hindering business and quality of life: The Henry George Foundation is promoting that now rediscovered old idea as advocated by Henry george in his seminal work Progress and Poverty. This is because we pay many times over the real price of coffee, lunch or life in general when the workers are slaving away and commuting costly from long distances to pay the landlord very high rents, constantly spiralling out of control; life and business are thus hindered while unearned, rising incomes are going to a privuiledged elite. But land speculation also divert savings, cause bubbles and instability as shown widely etc. 2. Of course, it is the state and ultimately the wider society responsibility to foster a core, patriotic and competent civil service elite; but maybe affordable and flexible private sector courses in taxation, skills upgrade ect would help. 3. In key areas of Irrigation & Water access, there were indeed successful initiatives done in partnership with the private sector through appropriate technology as with Kenya Approtec which was instrumental in doubling the income of many small-scale farmers. There are also appropriate technologies in water well drilling & pumping ranging from human powered to wind energy (water pumping seems the ideal use of this form of energy through ages and in many places): PRIVATE SECTOR PARTICIPATION IN LOW COST WATER WELL DRILLING IN AFRICA.

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SomaliPhilosopher;981467 wrote: Merci Abu. What is the business scene like and job opportunities in Djibouti for 'diaspora' folk The most obvious sectors are the build to rent as hinted in the threads but also english or skills teaching; of course, fishing & aquaculture or the processing of Ethiopian raw exports are also very promising, interesting to foreign investors. There are countless niche areas too such as tutoring, hi-tech car repairs, vehicles rental (for those with regular customers), services for the elite etc

I guess I'm not that bright but there would be no need to reinvent the wheel for the most crucial and productive priorities do not necessarily cost much or can even save money: averting land speculation, urban planning and public parks or open spaces, basic litteracy campaign and encouraging public reading or libraries (there is some local precedent in the latter area and Somalis are fond of learning or teaching on a volunteer basis). For the limited yet significant cash to go further, spending on civil service training (patriotic and competent core elite would be crucial to public service efficiency) would need to be prioritised alongside health prevention, hygiene and sanitation (hand washing, child and maternal nutrition ect) which will litterally transform the prospects of future generations. By then, the health or HDI indicators, for what those numbers are worth, would have shifted very much (already done in minimal resources settings such as India Kerala ect). The linked sector of water & irrigation is another natural priorities and schemes (some excellent public-private cooperation done in African countries could be used as templates to be adapted to local conditions): appropriate technology irrigation to boost farming, aquifers mapping, regulation, villagers training and public clean water points (keys to health indicators). The other bulk of the cash should go to strenghten the training of healthcare workers in partnership with private providers as well as construction skills (key to inflation prevention and long-term recovery). An interesting and very promising way to boost rural incomes equitably is local honey, at a high premium everywhere and ideally suited to local conditions (well established in Yemen, requiring minimal individual investment) and of course conservation to protect the ecology and prevent deforestation (often done alongside each other). Then, maybe some remaining scraps could be used to bring down power generation costs and encouraging sustainable fishing. But then again, a well-trained public service minded core elite would be key to all that; standing up against elite greed or land speculation and prioritising equality through health prevention, urban planning and parks, litteracy and rural/low-income sectors would be even more vital than anything else... PS: I don't subscribe to communism albeit world admired Cuba and other places succeeded in providing very high quality public healthcare or education at low cost to their masses but basic human needs and the less powerful should always remain the priorities or what really matters.

Is there deterioration in Somali language in Djibouti in terms of its quality and use among the newer generations? Is nomadic life in Djibouti still prevalent and to what degree has it been urbanized? Do the 'Somali' Djiboutians engage in clubbing and drinking? How prevalent are dugsis/madrasaas in the city and are they urban in infrastructure ? Do djiboutians claim this 'collective' history and identity of 'africanism', or do they view themselves as exclusive? There is an ongoing linguistic revival in schools alongside Islamic Studies or the more established Arabic but also in publishing (Somali Pen, linguistic units at the CERD research centre etc). Nomadism is waning but it is virtually impossible to stop cross borders nomadism as ethnic groups span accross countries. Western norms such as drinking and clubbing are frowned upon and limited to hidden activities and mostly few priviledged youth. There are dugsis or madrasahs everywhere of course as no Arab, Afar or Somali family go without it, albeit some hire macalins or teachers at home too (and both local Afars and Arabs tend to be even more conservative than Somalis socially speaking). We view ourselves as Muslims first, then Somalis etc.