US embassy cable - 04DJIBOUTI23

UNCLAS SECTION 01 OF 03 DJIBOUTI 000023 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREL, ECON, EFIN, KPAO, DJ 
SUBJECT: SUMMARY OF DECEMBER ACTIVITIES AT U.S. 
EMBASSY DJIBOUTI 
 
1. (U) A review of items of interest in 
Djibouti for the month of December follows. 
 
DJIBOUTI-SOMALIA RELATIONS 
-------------------------- 
 
2. (SBU) Ministry of Foreign Affairs Secretary for 
Bilateral Relations Miriam Goumaneh updated visiting AF/E 
Deputy Director Phil Carter and Political Officer Erinn 
Reed on Djibouti-Somalia relations, as well as the 
Djiboutian Foreign Ministry perspective on relations with 
the U.S. on December 9.  Goumaneh described recent 
actions by the Djiboutian government -- such as 
withdrawing from then almost immediately returning to 
Somali peace talks in Kenya -- as consistent with the 
long-term goal of establishing a peaceful Somalia. Carter 
agreed that Djibouti had played an important role and was 
well placed to continue being a positive influence on the 
process. Goumaneh stressed that Somalis needed to reach 
their own agreement and that it could not be imposed from 
the outside, but she believes Djibouti can act as a good- 
faith facilitator among the many factions. 
 
3. (SBU) Carter assured Goumaneh that the U.S. shared the 
same goals for Somalia but questioned the feasibility of 
a process without TNG participation.  He added that if 
the present peace conference failed, the U.S. would have 
to rethink the policy on engagement with Somaliland.  In 
any case, the U.S. would continue to follow the lead of 
the African Union policy in recognizing a secession if 
and when all sides directly concerned agreed to separate 
amicably. 
 
IMF TEAM VISIT 
-------------- 
 
4. (SBU) An International Monetary Fund team headed by 
Ugo Fasano, Deputy Division Chief, ended its visit with a 
donors' meeting on December 13, 2003.  POLOFF Erinn Reed 
and Econ Assistant Abdi Mahmoud attended the meeting 
which focused on the implementation of a Staff-Monitored 
Program (SMP) following the failure to fully implement 
economic reforms that accompanied the three-year poverty 
reduction and growth facility (PRGF) which expired in 
January 2003.  The team reviewed the Djiboutian 2003 and 
2004 budget and economic model and also focused on 
international competitiveness. 
 
5. (SBU) During an earlier meeting with CDA Smith on 
December 10, 2003, the team inquired about the monies 
given to the Djiboutian government by the U.S. They found 
it hard to reconcile amounts in the 2003 and 2004 
Djiboutian budgets with the amounts reported by the USG 
and other donors. The group believes Djibouti has a ways 
to go before it has a strong enough track record to merit 
another formal IMF program.  If they choose to, the 
Djiboutians can use the SMP as an opportunity to prove to 
the IMF they are sufficiently dedicated to policy reform 
to receive a new agreement. The permanent representative 
from the IMF in Djibouti and several follow-on Article IV 
consultations will show whether the political will is 
really there. 
 
6. (SBU) The IMF and other donors are critical of 
increased U.S. and French payments for military services. 
They believe these increases in funds available to the 
government of Djibouti have relieved the pressure to 
reduce government expenditures, especially the need to 
reduce public employees.  During the two formal meetings 
as well as during two informal meals, the IMF team had 
the opportunity to review (and defend) some of their 
stock policy recommendations, particularly currency 
devaluation.  The critique was that removing the 176.95 
Djiboutian Franc to the U.S. dollar peg that has held 
since 1947 would not increase productivity.  With no 
agriculture and no manufactures, Djibouti has only port 
and military services as foreign exchange earners. 
Neither of these is price sensitive.  Some argued that 
with Djibouti's totally non-elastic productive center, a 
devaluation would only increase poverty and suffering. 
 
DJIBOUTIAN OFFICIALS VISIT IRAN 
------------------------------- 
 
7. (U) President Ismail Omar Guelleh and several cabinet 
officials made a state visit to the Islamic Republic of 
Iran (IRI).  Subsequent public announcement stressed 
increased cooperation between the two governments, 
including a number of agreements in the economic, 
industrial and mining sectors. Specific aid to Djibouti 
included a loan for building a new office for the 
Djiboutian National Assembly and a commercial center. 
The Iranian Red Crescent promised to help in Djibouti's 
health program and in the education domain.  Iran also 
promised scholarships to students majoring in computer 
science. 
 
8. (U) Political discussions covered the African 
continent's conflicts and crises.  President Khatami 
complimented Guelleh's effort to restore peace and 
stability in Somalia while the two parties condemned the 
atrocities and violence of the "Zionist government of 
Sharon" against the Palestinian people.  They also 
condemned those who try to distort the image of Islam and 
lashed out against all acts of terrorism.  On Iraq 
issues, the two countries reaffirmed the need to preserve 
Iraq's territorial integrity, national unity and called 
for withdrawal of "occupiers" to allow the people of Iraq 
to govern their own country.   The two leaders called for 
peaceful application of nuclear technology for all 
members of the Non-Proliferation Treaty. 
 
EXXON MOBIL'S CLAIM AGAINST THE DJIBOUTIAN JUDICIARY 
--------------------------------------------- ------- 
 
9.  (SBU) The three major Western oil companies operating 
in Djibouti - ExxonMobil, Shell and Total - are defending 
themselves in several lawsuits brought forth by the 
Government of Djibouti. ExxonMobil has written to the 
Embassy complaining that fines have been tallied against 
them based on blatantly altered documents overturning 
previous appeals. Evidence to support this charge was 
given to the Charge in a meeting with ExxonMobil 
representative Alain Adam on December 10, 2003.  The 
Charge visited the Minister of Justice and was promised 
immediate action but since a follow-up visit with the 
Minister of the Presidency in charge of Foreign 
Investment on December 22, we have heard nothing. 
 
10.  (SBU) As soon as we receive a reaction on this 
issue, we will incorporate it in our National Trade 
Estimate reporting cable.  Depending on the response, 
this incident might severely affect Djibouti's reputation 
with the international business community.  We expect the 
Government will respond within the next several days, but 
we are not heartened by Minister of the Presidency 
Osman's plea we "not punish the entire country for the 
actions of a few individuals." 
 
JOINT CHIEFS/ROBIN WILLIAMS' VISIT TO CAMP LEMONIER ON 
RTD 
--------------------------------------------- --------- 
 
11. (SBU) Embassy Djibouti's PAO Tiffany Bartish provided 
footage, photos and a press release to Radio-TV Djibouti 
(RTD) of the Robin Williams USO Christmas visit to Camp 
Lemonier. RTD aired a full three minutes of footage that 
included the American Flag and a presentation to Williams 
of a man-skirt and a cow skull (a symbol of the Horn of 
Africa). Response has been positive from the Djiboutian 
public who might not have enjoyed some of William's 
comments about the locale -- "Not the end of the earth, 
but you can see it from here!"   PAO Bartish ensured 
neither these nor Mr. Williams' bluer comments were on 
the tape. 
 
OBO NEW EMBASSY COMPOUND SITE SELECTION TEAM FINDS THREE 
POSSIBILITIES 
--------------------------------------------- ------------ 
 
12. (U) Post hosted an OBO site selection committee 
headed by Thomas Grubb December 14 through 18.  Three 
possible sites were found.  All are within a kilometer of 
each other about half way between the present site in 
downtown Djibouti and the airport and Camp Lemonier. 
 
FOOD AID CUT TO DJIBOUTI-BASED REFUGEES TO FORCE REFORMS 
--------------------------------------------- ----------- 
 
13. (SBU) USAID's REDSO office out of Nairobi has 
temporarily cut off U.S. food assistance for refugees to 
force the Djiboutian refugee offices to reform their 
operations, stop diversion of food assistance to security 
forces and kick start the almost moribund program of 
repatriation of Somalis from Somaliland.  Following up on 
03 Nairobi 5355, we believe that the cancellation of 
shipments for December and January will result in a re- 
organization of the Djiboutian refugee office ONARS. 
 
14. (SBU) This coordinated tough love for the Djiboutian 
government seems to be working.  First put in place in 
September when the U.S. and UN provided a common front on 
not supporting a new refugee camp made of formerly 
clandestine workers, the new step initiated by World Food 
Program officer Robert Gillenwater has already helped 
focus GoDj attention at the highest levels on the need to 
reform the refugee program.  Gillenwater and UNHCR 
representative Collins Asare expect a new proposal from 
the Djiboutians in mid-January which will allow USAID to 
resume shipments.  These would arrive in March or April 
and not effect actual food distribution to the refugees. 
 
SMITH