US embassy cable - 05DJIBOUTI461

UNCLAS DJIBOUTI 000461 
 
SIPDIS 
 
STATE FOR AF AND AF/E 
STATE PASS USAID 
NAIROBI FOR REDSO 
 
E.O. 12958:  N/A 
TAGS: PREL, PGOV, EAID, SOCI, DJ 
SUBJECT:  REQUEST TO TRANSITION USAID PROGRAM IN DJIBOUTI 
 
1. U) This is an action message. 
 
2. (U) Embassy Djibouti requests State and USAID agreement 
to transition the USAID program in Djibouti from primary 
reliance on Economic Support Funds (ESF) to Development 
Assistance (DA) funding over the next two years with an 
initial modest DA program of two to three million dollars. 
A shift to a modest DA program, in addition to annual ESF 
allotments available, will help solidify relationships with 
the Government of the Republic of Djibouti (GORD), insure a 
more reliable and steady stream of funding and facilitate 
achievement of realistic development objectives. 
 
3. (U) Cooperation on the war on terrorism continues to be 
the foundation of the strong partnership between the U.S. 
and the Government of Djibouti. The USAID development 
program strengthens that partnership but the uncertainties 
of ESF levels from one year to the next raises doubts among 
GORD leadership about the durability of our partnership. 
Widely fluctuating ESF levels also make it difficult to 
plan and implement a coherent and effective program.  This 
year, for example, ESF levels were initially pegged at $8 
million, then reduced to $5 million and finally allocated 
at less than $2 million.  Post appreciates the pressures on 
ESF worldwide, but Djibouti's genuine needs, and the 
resulting benefits we derive from our close relationship, 
mandate a look at alternative sources of development 
assistance. 
 
4. (U) With its small population, proven stability, peace 
and seemingly decent per capita income by African 
standards, it is easy to overlook Djibouti's real needs. 
The truth is most of the population is desperately poor and 
social development indicators are among the worst in the 
world.  Unemployment is 60% and more than 60% of adults 
cannot read or write.  Infant and under-five child 
mortality is high at an estimated 114 and 165 per 1,000 
live births, respectively.  The rate of maternal mortality 
is one of the highest in the world.  Over 45% of the 
primary school age population does not attend school.  Life 
expectancy is only 46 years.  Djibouti is ranked 157 among 
174 countries on the United Nations Development Program's 
Human Development Index. 
 
5. (U) With no natural resources, and no agricultural land 
to speak of, Djibouti has only its people, strategic 
location and stability to form a foundation for economic 
development. National institutions are very weak with 
poorly educated staff and poor work habits. The country 
lacks a university to train graduates to fill key 
positions. The cost of living is very high as almost 
everything is imported.   USAID and the Embassy are working 
in partnership with the Government of Djibouti to overcome 
these obstacles and implement the government's vision of 
transforming the country into a hub for trade in the Horn 
of Africa and the Middle East.  USAID is supporting the 
government's reform efforts with its education, health and 
food security programs, with impressive results to date. 
However, the achievement of extended impact on the quality 
of the lives of people will take a long-term commitment of 
USG resources.  A transition to DA funding will help ensure 
such a commitment. 
 
6. (U) Assurance of DA funding would enable sound strategic 
planning over the medium term, which is valuable for making 
investment choices among Djibouti's many development needs. 
With limited funds it's impossible to meet all the GORD's 
myriad requests for assistance, but planning would enable 
us to select priorities where we can best promote USG 
interests and have the greatest impact. 
 
7. (U) For instance, it is clearly in the USG's interest to 
do more to support political stability and democratic 
development in Djibouti.  The government has already 
expressed an interest in judicial sector reform and in 
improving its human rights record with the United States. 
The recently completed IRI/IFES pre-election assessment 
points out the need for constitutional and electoral law 
reform to facilitate healthy dialogue between the ruling 
party and the opposition.  Djibouti needs to develop a 
culture of civil society participation in all areas.  While 
not possible to address all these needs, a DA-funded USAID 
program, with a longer-term development horizon, would 
permit appropriately planned and focused 
democracy/governance assistance in these critical areas. 
 
8. (U) Mission would appreciate Department and USAID's 
early feedback on this request. 
RAGSDALE