VZCZCXRO8723
RR RUEHROV
DE RUEHDJ #0684/01 2391122
ZNR UUUUU ZZH
R 261122Z AUG 08
FM AMEMBASSY DJIBOUTI
TO RUEHC/SECSTATE WASHDC 9467
INFO RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC
RUCNIAD/IGAD COLLECTIVE
RHMFIUU/CJTF HOA

UNCLAS SECTION 01 OF 02 DJIBOUTI 000684 
 
DEPARTMENT FOR AF/E AND AF/EPS 
LONDON, PARIS, ROME FOR AFRICA WATCHER 
CJTF-HOA FOR POLAD 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON PHUM SOCI SENV KCOR KMCA KWMN
SUBJECT: DJIBOUTI MCC ROUNDUP: SUBSTANTIAL FY2008 PROGRESS 
 
DJIBOUTI 00000684  001.2 OF 002 
 
 
¶1. SUMMARY: In FY2008, Djibouti made significant strides in several 
areas measured by the Millennium Challenge Corporation (MCC) 
indicators.  Some of Djibouti's achievements--such as holding free 
and fair legislative elections that brought two more women into 
parliament, organizing a national seminar on human rights, and 
actively promoting renewable energy development--may not be fully 
captured in this year's indicator data.  Few of the independent 
third-party institutions MCC uses for indicator data have a robust, 
recent, or frequent in-country presence.  Therefore, there may be a 
significant time lag before these institutions can accurately 
capture Djibouti's latest progress.  This cable aims to provide a 
more comprehensive on-the-ground summary of Djibouti's improvement 
in several MCC indicator areas.  END SUMMARY. 
 
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RULING JUSTLY 
------------- 
 
¶2. POLITICAL RIGHTS; VOICE AND ACCOUNTABILITY 
 
--In February 2008, Djibouti held successful legislative elections. 
Although three opposition parties boycotted the race, the winning 
coalition, the "Union for a Presidential Majority," included five 
parties, including former opposition groups.  Two more women were 
elected to the National Assembly, bringing the total number of 
female parliamentarians in the 65-seat body up to nine. 
International observers--including from the African Union and the 
Arab League--considered the election generally free and fair, and 
there was a reported voter turnout rate of over 72 percent. 
 
--As part of its ongoing project to decentralize governmental 
functions and empower local and regional leadership, the central 
GODJ finished transferring responsibility for civil documents such 
as birth certificates to the regional authorities in 2008.  This 
transfer adds to the authority and credibility of the newly elected 
regional councils and the Mayor of Djibouti City.  In June 2008, the 
GODJ collaborated with the United Nations Development Program (UNDP) 
and the European Union (EU) to hold a national workshop on 
decentralization and local development. 
 
¶3. CIVIL LIBERTIES 
 
--In May 2008, the GODJ held a National Human Rights Workshop in 
cooperation with the United Nations High Commissioner for Human 
Rights (UNHCR).  Government officials, local NGO representatives, 
the head of the National Police, local legal advocates, and the 
international community participated in the two-day program, which 
featured lively and open discussions on a variety of human rights 
issues. 
 
--In May 2008, Djibouti's First Lady and the United Nations 
Population Fund launched a five-year, $400,000 campaign against 
female genital mutilation (FGM).  In continuation of the GODJ's 
active advocacy against FGM, the new campaign kicked off with a 
series of workshops throughout the spring and summer of 2008, 
including sessions targeting community religious leaders and legal 
experts. 
 
¶4. CONTROL OF CORRUPTION 
 
--Two institutions--the Chamber of Accounts and Fiscal Discipline, 
and the State Inspectorate General--continued to monitor and audit 
government finances.  In May 2008, representatives from both these 
bodies joined several dozen newly-elected parliamentarians, civil 
servants, and business community leaders in a week-long series of 
workshops on fighting corruption moderated by Africa Regional 
Services speaker Robert Smolik. 
 
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INVESTING IN PEOPLE 
------------------- 
 
¶5. INVESTING IN PEOPLE 
 
--During 2008, the GODJ created both a new agency and a new 
cabinet-level position to better coordinate its national poverty 
reduction program.  In January 2008, the GODJ formally launched the 
Djiboutian Agency for Social Development (ADDS).  ADDS is charged 
with administering the National Social Development Initiative 
(INDS), a $9 million -plus comprehensive poverty reduction strategy. 
 The INDS aims to create jobs, provide improved social services and 
infrastructure, and target the most vulnerable groups for 
assistance.  In March 2008, President Guelleh created the new 
position of Secretary of State in charge of National Solidarity, to 
be responsible for coordinating poverty reduction measures.  In 
April 2008, the new Secretary of State launched the National Fund 
for Savings and Credit, designed to provide accessible finance 
 
DJIBOUTI 00000684  002.2 OF 002 
 
 
options to previously underserved groups. 
 
¶6. NATURAL RESOURCE MANAGEMENT 
 
--In 2008, the GODJ continued to actively pursue development of 
renewable energy alternatives, including wind, solar, and geothermal 
sources.  In April 2008, the GODJ signed agreements with Iceland to 
begin cooperative development of Djibouti's considerable geothermal 
potential.  By supplementing or replacing current diesel-generated 
power and unsustainably harvested wood fuel with cleaner 
alternatives, the GODJ seeks to improve air and water quality and 
substantially lower the cost of electricity.  This will improve 
health conditions for Djibouti's population and its fragile 
ecosystems, as well as expand access to basic power and water. 
 
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ECONOMIC FREEDOM 
---------------- 
 
¶7. REGULATORY QUALITY; TRADE POLICY 
 
--In 2008, Djibouti continued to attract foreign investment with a 
liberal and transparent investment code.  Dubai Ports World (DP 
World) professionally managed the Free Zone, port, airport, and 
customs service.  In July 2008, the Al Noor Holding Group officially 
launched a project to build a bridge between Djibouti and Yemen and 
construct a new city on both sides of the bridge.  The GODJ welcomed 
the estimated $200 billion project and conceded a parcel of land for 
the construction of the new city.  The Al Noor Alliance includes 
several well-known U.S. companies, such as AIG, Honeywell, L3, 
PricewaterhouseCoopers, and SAIC. 
 
--Djibouti's open regulatory environment continued to spur growth in 
the financial services sector.  In February 2008, President Guelleh 
officially opened Djibouti's fifth private bank, the Banque de Depot 
et de Credit de Djibouti. 
 
¶8. BUSINESS START-UP 
 
--In February 2008, the Ministry of Commerce held a series of 
national meetings on trade and business.  The meetings drew together 
public and private sector actors, and focused, among other topics, 
on how to improve Djibouti's evaluation in the annual "Doing 
Business" report. 
 
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COME A LONG WAY, AND A LONG WAY TO GO 
------------------------------------- 
 
¶9. COMMENT: Djibouti still has many deficits to overcome, and much 
room to improve on MCC indicators.  However, while grappling with 
unemployment rates of nearly 60 percent, persistent drought and 
resulting high malnutrition levels, overall regional security 
threats, and an ongoing border dispute with Eritrea, Djibouti has 
still managed to make important strides in several key indicator 
areas.  Recognition of Djibouti's accomplishments--and especially of 
achievements not captured by third-party institutions without the 
ability to consistently gauge recent ground truth--will likely help 
spur redoubled GODJ efforts to improve governance, better the lot of 
ordinary Djiboutians, and keep cementing Djibouti's status as a 
regional oasis of economic freedom.  END COMMENT. 
 
WONG