VZCZCXRO5842
RR RUEHLMC RUEHROV
DE RUEHDJ #0755/01 1731231
ZNR UUUUU ZZH
R 221233Z JUN 09
FM AMEMBASSY DJIBOUTI
TO RUEHC/SECSTATE WASHDC 0543
INFO IGAD COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHDJ/AMEMBASSY DJIBOUTI
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC

UNCLAS SECTION 01 OF 02 DJIBOUTI 000755 
 
SIPDIS 
STATE FOR AF/E 
E/EEB 
AND AF/EPS 
NAIROBI FOR FCS 
ADDIS ABABA FOR REO 
DOC FOR BERKUL 
LONDON 
PARIS 
ROME FOR AFRICA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON EINV EFIN EAIR EMIN ENRG ELTN EWWT SENV DJ
SUBJECT: DJIBOUTI: APRIL-MAY ECON-ESTH ROUNDUP 
 
-------------- 
IN THIS ISSUE: 
-------------- 
 
¶1. This April-May 2009 Djibouti Economic-ESTH roundup 
includes: 
 
--Chinese company to build rail spur to Djiboutis new port 
--Fund grants first loans to local entrepreneurs 
--New airline serving Djibouti and Yemen 
--Indian firm evaluating potential Djibouti gold deposits 
--New road links key northern regional capitals 
--New policy pushes civil servants into formal banking sector 
--Some relief on electricity prices 
--Djibouti hosts regional trainees at state-of-the-art port 
--Endangered wildlife brought back to Djibouti 
 
----------------------------- 
CHINESE COMPANY TO BUILD RAIL 
SPUR TO DJIBOUTIS NEW PORT 
----------------------------- 
 
¶2. GODJ Minister of Transport Ali Hassan Bahdon signed an 
agreement April 15 with China Railway International for the 
construction of a 12 km rail link joining Djiboutis new USD 
300 million Doraleh Container Terminal (DCT) to the Djibouti- 
Ethiopia rail line.  The cost of the project, which also 
includes a truck depot, is estimated at more than USD 36 
million, and will allow for rail transport of goods between 
the new port and Ethiopia.  The French Agency for Cooperation 
funded feasibility studies for the project in 2008. 
Construction is planned to take place over two years.  (NOTE: 
The Ethiopia-Djibouti rail link is not fully functional and 
will require rehabilitation if the Chinese-built rail link is 
to have its intended economic impact.  END NOTE.) 
 
----------------------- 
FUND GRANTS FIRST LOANS 
TO LOCAL ENTREPRENEURS 
------------------------ 
 
¶3. On April 16, the Djibouti Economic Development Fund (DEDF) 
gave its first loans--totaling over DJF 65 million 
(approximately USD 367,000)--to four local entrepreneurs.  A 
second, larger group of local entrepreneurs are next slated to 
receive loans totaling more than USD 847,000.  DEFD has 
received approximately USD 5 million in loan financing from 
the Kuwait Fund for Arab Economic Development.  DEFDs mandate 
is to offer low interest rate loans to small- and medium-size 
companies, boosting private sector growth and job creation. 
In collaboration with the Djibouti Social Development Agency 
(ADDS), DEDF also aims to assist to young, unemployed 
university graduates interested in starting their own 
businesses.  In a recent Gallup Poll on attitudes toward 
entrepreneurship among Arab youth, 58 percent of Djibouti 
respondents said that they agreed that entrepreneurs help 
create jobs, while 39 percent said they planned to start 
their own business within the next year. 
 
------------------- 
NEW AIRLINE SERVING 
DJIBOUTI AND YEMEN 
------------------- 
 
¶4. Felix Airways began serving Djibouti April 26.  Felix 
Airways, the second-largest airline in Yemen, is beginning 
Djibouti operations with three weekly flights between Djibouti 
and Yemen, with plans to move toward a daily service.  Felix 
Airways joins carriers including Air France, Air Kenya, 
Ethiopian Airlines, Daallo Airlines, and Djibouti Airlines in 
offering regular service to Djiboutis Dubai Ports World- 
managed Ambouli International Airport. 
 
-------------------------------- 
INDIAN FIRM EVALUATING POTENTIAL 
DJIBOUTI GOLD DEPOSITS 
--------------------------------- 
 
DJIBOUTI 00000755  002 OF 002 
 
 
¶5. JB Djibouti Mining, a subsidiary of Indian JB Group, has 
completed the first in a series of preliminary studies on 
potential gold deposits in Djiboutis southern region of 
Dikhil.  These studies, begun in early 2008, primarily focused 
on evaluating surface-level samples.  On the strength of more 
than 1,000 samples sent to Australia for testing, the company 
has reported positive results.  President Guelleh visited the 
site April 16 to officially launch the second testing phase, 
which will focus on evaluating underground samples.  If this 
second phase shows positive results, JB Djibouti Mining is 
expected to proceed with exploration. 
 
------------------------- 
NEW ROAD LINKS KEY 
NORTHERN REGIONAL CAPITALS 
-------------------------- 
 
¶6. On April 25, President Guelleh inaugurated a new road 
linking the two northern regional capitals of Tadjourah and 
Obock.  The Kuwait Fund for Arab Economic Development financed 
the USD 26.5 million, 71 km road.  The road, which 
significantly reduces travel time between the two cities, is 
intended to help boost economic growth in Obock and Tadjourah, 
both by easing regional travel, and reducing travel time to 
Djibouti Citys markets. 
 
-------------------------------- 
NEW POLICY PUSHES CIVIL SERVANTS 
INTO FORMAL BANKING SECTOR 
-------------------------------- 
 
¶7. The Central Bank of Djibouti convened government agencies 
April 1 to raise awareness of a new presidential decree 
limiting cash payments to public and private sector employees. 
The new guideline requires wages equal to or greater than DJF 
40,000 (approximately USD 226) to be electronically 
transferred into the recipients bank account.  The new policy 
aims to encourage salaried employees to open bank accounts, as 
only an estimated 8 percent of Djiboutians currently hold a 
formal bank account. 
 
--------------------------------- 
SOME RELIEF ON ELECTRICITY PRICES 
--------------------------------- 
 
¶8. On April 7, the government-owned monopoly utility company 
EDD (Electricity of Djibouti) reduced its electricity rates by 
9 percent.  Officials from EDD indicated that the decision 
came as a result of the decrease in oil prices.  EDD currently 
uses diesel generators; as in previous summers, equipment 
breakdowns have led to periodic power cuts as summer heat 
prompts a surge in electricity demand. 
 
--------------------------------- 
DJIBOUTI HOSTS REGIONAL 
TRAINEES AT STATE-OF-THE-ART PORT 
--------------------------------- 
 
¶9. In May, ten Senegalese and two Algerian nationals were sent 
by their respective home ports to participate in a month-long 
training course at Djiboutis Doraleh Container Terminal 
(DCT).  The Dubai Ports World-managed DCT posted a record 
handling of 70 containers per hour in April.  The French 
shipping line CGM-CMA has recently chosen DCT as its main port 
for transshipment. 
 
-------------------------- 
ENDANGERED WILDLIFE BROUGHT 
BACK TO DJIBOUTI 
-------------------------- 
 
¶10. The Ministry of Habitat, Urbanism, and Environment 
received seven wild donkeys, two Beisa oryx, and two Grevys 
zebras from a zoo in France April 2.  The animals were 
entrusted to the center of the DECAN association, which 
operates a small wildlife refuge near Djibouti City.  These 
species were once represented among Djiboutis fauna, but 
disappeared several decades ago. 
SWAN