VZCZCXYZ0003
RR RUEHWEB

DE RUEHDJ #0066/01 0251028
ZNR UUUUU ZZH
R 251027Z JAN 10
FM AMEMBASSY DJIBOUTI
TO RUEHC/SECSTATE WASHDC 1289
INFO RUEHDJ/AMEMBASSY DJIBOUTI
RUEHDS/AMEMBASSY ADDIS ABABA 0087
RUEHNR/AMEMBASSY NAIROBI

UNCLAS DJIBOUTI 000066 
 
SIPDIS 
STATE FOR EEB/CBA D. WINSTEAD 
NAIROBI FOR FCS 
KTBD 
EWMN 
 
E.O. 12958: N/A 
TAGS: BEXP BTIO EINV ETRD ECON DJ
SUBJECT: DJIBOUTI: FY10 BFIF PROGRAM PROPOSAL 
 
REF: 10 STATE 126674; 09 DJIBOUTI 1508 
 
¶1. SUMMARY AND ACTION REQUEST.  Embassy Djibouti, a non-Commercial 
Service post, requests USD 3,500 in FY10 BFIF funds (ref A) to 
organize a three-day workshop on entrepreneurship in Djibouti before 
October 2010.  The proposed workshop--to be executed in collaboration 
with the Djiboutian National Investment Promotion Agency (NIPA)--will 
include sessions on legal framework, transparency and best practices 
in accounting, and female entrepreneurship.  Post will invite several 
U.S. companies working in Djibouti to participate in the workshop, 
and key sessions will focus on best practices for working with U.S. 
business.  By providing a forum for interaction with U.S. business in 
Djibouti, post hopes to better equip young Djiboutian entrepreneurs 
to partner with U.S. and other foreign companies in Djibouti. 
Several U.S. companies work in Djibouti as contractors for the U.S. 
military at Djibouti's Camp Lemonnier, the only U.S. military base in 
sub-Saharan Africa.  Targeted participants will include university 
students, entrepreneurs, selected ministries and government agencies, 
the Djibouti Chamber of Commerce, and the banking community.  The 
proposed workshop would support several core Mission Strategic Plan 
goals, including Investing in People, Economic Growth, and Governing 
Justly and Democratically. 
END SUMMARY AND ACTION REQUEST. 
 
------------- 
JUSTIFICATION 
------------- 
 
¶2. Djibouti continues to combat serious challenges of poverty, food 
insecurity, and unemployment.  However, its vibrant service-based 
economy has registered positive growth rates for several years (ref 
B).  Absent cultivable land or a strong industrial sector, Djibouti 
imports most basic goods, and has developed a service-based economy 
centered around the world-class Port of Djibouti, managed by Dubai 
Ports World.  Djibouti's assets include a strategic geographic 
location, an open trade regime, a stable currency, and substantial 
tax breaks for investors.  The GODJ has actively and successfully 
courted foreign direct investment, and growing investment inflows 
have the potential to create jobs and reduce Djibouti's 59 percent 
unemployment rate.  To help ordinary Djiboutians benefit from the 
country's growing economy, the GODJ has begun promoting 
entrepreneurship, including through innovative micro-credit programs, 
and also by allowing for significant growth in the credit markets of 
the private banking sector.  Djibouti has a young population, with 
over 75 percent of Djiboutians under 25 years of age.  This new 
generation needs training, resources, and encouragement to build a 
future based on private entrepreneurship, rather than dated ideas of 
security in a government job, or the bleak alternative of poverty and 
unemployment.  Djiboutian women, long very active in the informal 
sector, also need training and resources to shift and grow their 
business into the formal sector. 
 
¶3. The Djibouti Chamber of Commerce's Business Directory lists over 
600 local businesses in Djibouti.  The vast majority of these 
enterprises use rudimentary management and accounting tools. 
Djibouti's unemployment rate is estimated at over 59 percent in urban 
settings, and is even higher in rural areas.  The University of 
Djibouti counts more than 3,000 registered students, all of whom will 
be looking for a job in the coming two to three years. The Government 
of Djibouti is currently the country's main employer, followed by the 
port, public firms, and foreign military forces.  Government and 
public sectors cannot be expected to absorb a large influx of new 
graduates.  Entrepreneurship must become a key tool to combat 
Djibouti's staggering unemployment rates.  The purpose of the 
proposed workshop is to help introduce current and future 
entrepreneurs to the tools that can help them professionalize, 
sustain, and expand their businesses.  A further objective of this 
workshop is to take a closer look at Djibouti's laws and regulations 
governing entrepreneurship, encourage women entrepreneurs, and create 
conditions favorable to future partnerships between U.S. and 
Djiboutian business. 
 
--------------- 
EXPECTED IMPACT 
--------------- 
 
¶4. One of the major expected impacts of the proposed workshop would 
be to plant and encourage a culture of entrepreneurship among young 
Djiboutian college graduates.  In the past, some U.S. companies 
working in Djibouti have reported a lack of professionalism among 
local companies.  The proposed workshop will help remedy this 
situation by raising awareness among local entrepreneurs on best 
practices, transparency, and expected standards when dealing with 
 
U.S. companies.  Djiboutian business leaders have repeatedly 
expressed a strong interest in commercial relationships with U.S. 
businesses.  Post anticipates that this workshop will allow for 
fruitful contacts between U.S. businesses and their Djiboutian 
counterparts. In addition, post anticipates that this workshop will 
shed some light on the constraints facing local enterprises, and fuel 
momentum toward institutional solutions.  Finally, post anticipates 
that the proposed workshop will begin the ground work for a future 
"Guide for the Djiboutian Entrepreneur."  Post has received positive 
feedback from several possible collaborators and invitees in the 
Djiboutian business community and Djiboutian government on the 
proposed workshop concept, and anticipates that the event would draw 
strong participation and high-level support. 
 
--------------------------- 
MILESTONES AND COST DETAILS 
--------------------------- 
 
¶5. The three-day workshop is tentatively planned for October, 2010. 
The first day will begin with a presentation by a business lawyer and 
a senior representative of the Ministry of Commerce on the judicial 
and legal framework governing the activities of entrepreneurs in 
Djibouti.  It will be followed by a session about the opportunities 
and constraints facing entrepreneurs, led by a panel of 
representatives from the National Investment Promotion Agency, the 
commercial banking community, the Djibouti Economic Development Fund, 
and the private sector.  The second day will focus on accounting and 
auditing, addressed by a panel comprised of an accounting firm, the 
Chamber of Commerce, and a representative of the GODJ Tax Department. 
 Each session will be followed by questions and discussions.  The 
last and flagship day will be devoted to U.S. business experience in 
Djibouti, and advice from U.S. companies on how to work with U.S. 
business.  The workshop will conclude with a set of recommendations 
compiled from the presentations and discussions of the previous two 
days. 
 
¶6. The cost details are as follows: 
 
Advertisement: USD 500 
Coffee Breaks (3 days): USD 1,000 
Conference Room Rental (3 days): USD 1,500 
Publication of Conference Follow-Up Materials: USD 500 
 
Total: USD 3,500 
 
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POINTS OF CONTACT 
----------------- 
 
¶7. Post points of contact for this proposal are: Political/Economic 
Officer Rebecca Hunter (HunterRK@state.gov) and Economic/Commercial 
Specialist Abdi Mahamoud (mahamouda@state.gov) 
SWAN