US embassy cable - 04DJIBOUTI1562

C O N F I D E N T I A L SECTION 01 OF 02 DJIBOUTI 001562 
 
SIPDIS 
 
LONDON, PARIS FOR AFRICA WATCHER 
 
E.O. 12958: DECL: 12/08/2014 
TAGS: ECON, EFIN, PGOV, PREL, EPET, PHUM, DJ 
SUBJECT: BUDGETARY SESSION OPENING INDICATIVE OF FRICTION 
BETWEEN PARLIAMENT AND GOVERNMENT 
 
 
Classified By: Pol/Econ Erinn C. Reed for reasons 1.4 (b) and (d). 
 
1. (U) Summary: On November 29th, the Djibouti National 
Assembly officially opened its second session, known as the 
budgetary session, for 2004 in a ceremony presided over by 
Prime Minister Dileita Mohamed Dileita. The ceremony, in 
which PM Dileita and National Assembly President Idriss 
Arnaoud Ali spoke, was attended by government officials, 
members of the Diplomatic corps, and UN agencies. The PM's 
speech highlighted the accomplishments of the 2004 budget and 
enumerated several significant line items for fiscal year 
2005. He also commented on current economic and political 
events in Djibouti, regional issues, and international 
concerns. President of the National Assembly, Idriss Around 
Ali's speech was slightly critical, lamenting the small 
amount of time given by the government to study the 2005 
budget. Ali also touched on upcoming reforms to invigorate 
the work of the National Assembly. End Summary. 
 
2. (U) On the opening of the budgetary session of the 
National Assembly, November 29th, Prime Minister Dileita 
Mohamed Dileita's commentary on the performance of the 
Djiboutian economy was positive. He said despite climbing oil 
prices and the dollar's slump compared to the Euro, 
Djibouti's economy sustained its current level during 2004. 
Inflation was kept to three percent. Dileita also enumerated 
the government's hopes for the 2005 budget, citing four major 
projects that will be started during the fiscal year. 
Consolidating macroeconomic stability, launching economic 
growth, improving of human resources in education and health, 
and developing of socioeconomic infrastructures were named as 
key priorities for the Government. 
 
3. (U) According to Dileita, the 2005 budget is 43 billion DF 
(approx. 243 million USD). He also projected national growth 
to climb to as high as 3.5 percent. Dileita commented that 
projected budget savings will be reinvested in improving the 
capital-city through a clean-up campaign with a budget of 700 
million DF (3.9 million USD). Rehabilitation of urban 
infrastructures will comprise 315 million DF (1.8 million 
USD). Finalizing the Ali Sabieh cement factory through 
self-investment will take 1 billion DF (5.7 million USD). 
Social spending is also expected to rise substantially due to 
education, health and labor measures. 
 
4. (U) An 18 billion DF (101 million USD) program to 
construct schools and hospitals will be financed by foreign 
funding, including a new hospital for Balbala. The Cite Hodan 
housing project began by the Abu Dhabi Fund will be expanded 
from 842 units to 1842 units. Industrial projects such as the 
cement and ceramic factories in Ali Sabieh will also be 
launched. Rehabilitation of the road between Tadjourah and 
Obock is also slated for 2005 funding. Dileita also stated 
that planned rehabilitation of roads inside the city's 
commercial center has just begun and the Arta- Dikhil road 
construction has just been completed. 
 
5. (U) Dileita stated that due to the trust of international 
partners, public investments are growing. He cited examples 
of public projects to be done in 2005 including the 
construction of the Doraleh oil terminal, the regional 
livestock exportation center, the commercial center and 
housing development in Haramous, and construction of new 
international hotels. According to Dileita, these ventures 
would also lead to road improvements around the projects. 
 
6. (U) The speech of Idriss Arnaoud Ali, the President of the 
National Assembly, was somewhat critical towards the 
government, specifically mentioning the late passage of the 
budget to the Parliament. He lamented that budget discussions 
would not have sufficient time due to time constraints before 
the end of the years. (Note: The government had previously 
said that the budget proposal would not be delivered on time 
because it had to be approved by IMF specialists. The budget 
was not approved until the night before the opening ceremony 
of the session. End Note.) Ali requested the government stop 
the habit of delaying important proposals like the budget 
because the MP's needed to discuss it thoroughly before 
expediting it. 
 
7. (U) Ali, who seems to have the will to make changes, 
openly stated his regret for the dilapidated state of the 
National Assembly's building. He took the opportunity to 
announce that Parliament will move to the "Palais du Peuple" 
(the government convention center) until the new parliament 
building is completed. (Note: This project is being financed 
by a loan from Iran and is expected to take one year to 
complete. End Note.) Ali also announced  establishment of an 
Ad Hoc commission backed by an international expert to 
examine ways to improve the functioning of the parliament. 
 
8. (C) Comment: The Ad Hoc commission Ali refers to is part 
of a project financed by the UN Program for Development 
(UNDP). As part of this project, the National Assembly has 
brought in a former French MP, who used to be a 
constitutional professor, to serve as a consultant. 
Reportedly, he threw out almost every article of interior 
house rules and said that the work of a parliament was not 
understood at all in Djibouti. The MPs were doing merely a 
minute-by-minute record of the government's laws and this is 
not what their work should entail. He said among the 65 MPs, 
only 15 would stand as good parliamentarians in western 
standards. He also commented even in the French parliament 
only 55 out of 577 are considered truly effective. 
 
9. (C) Comment cont. On December 6th, the Minister of Finance 
reportedly told UNDP Country Representative that the French 
consultant was requested to leave Djibouti within 24 hours. 
This request came after the consultant criticized the 
government's habit of giving the Parliament only bureaucratic 
tasks, such as approving the budget, while neglecting the 
more important aspects of Parliamentary duties. The 
consultant is reportedly not being asked to leave after 
UNDP's Country Representative told the Minister of Finance 
that the National Assembly would first need to be consulted, 
as the consultant works now for the National Assembly. End 
Comment. 
RAGSDALE