US embassy cable - 05DJIBOUTI989

C O N F I D E N T I A L SECTION 01 OF 02 DJIBOUTI 000989 
 
SIPDIS 
 
STATE FOR AF, AF/E 
LONDON/PARIS FOR AFRICA WATCHER 
NAIROBI ALSO FOR REDSO 
NSC FOR AFRICA DIRECTOR DR. CINDY COURVILLE 
 
E.O. 12958: DECL: 10/04/2015 
TAGS: PREL, PGOV, ASEC, ECON, ETRD, DJ 
SUBJECT: AMBASSADOR'S MEETING WITH DJIBOUTI FOREIGN MINISTER 
 
REF: DJIBOUTI 965 
 
Classified By: AMBASSADOR MARGUERITA D. RAGSDALE. 
REASONS 1.5 (B) AND (D). 
 
1. (c) SUMMARY:  Ambassador Ragsdale and DCM Ball called 
September 29 on Djibouti Foreign Minister Mahmoud Ali 
Youssouf.  Topics raised by the Ambassador included President 
Guelleh's trip to UNGA and Baltimore; Djibouti's national 
debt; renewable energy, including geothermal; strikes at the 
Port of Djibouti; the Prime Minister's visit to China; and 
trafficking in persons and human rights.  The Foreign 
Minister raised issues of Djibouti's qualification under the 
Millennium Challenge Corporation and the current USAID 
livestock project.  END SUMMARY. 
 
2. (C) Ambassador, accompanied by DCM, called September 29 on 
Foreign Minister (FM) Mahmoud Ali Youssouf to discuss the 
recent travel of President Guelleh and the Foreign Minister 
to New York for the United Nations General Assembly (UNGA) 
session and the President's subsequent dinner and meetings in 
Baltimore with the Corporate Council on Africa and potential 
partners for energy production.  The FM was asked, but did 
not know why, the President had not had meetings with 
Washington officials. He suggested that because President 
Guelleh had been in Washington in March for a meeting with 
the Secretary of State, and the large number of VIPs at UNGA, 
there was insufficient opportunity for a meeting on the 
margins of UNGA to go forward. 
 
3.  (C)  The FM noted that he and President Guelleh met in 
Baltimore, Maryland with the Corporate Council on Africa. 
The FM opined that the Council appeared to him not to know 
Africa really well.  He said he felt the Council took its 
lead from television, not from reality.  He expressed the 
view that the Council was searching for "safe" ways to invest 
and that its members were "not ready" for East Africa.  The 
FM noted nevertheless that the focus was on commerce and he 
avowed that Djibouti firms went to develop commercial links 
with U.S. companies. 
 
4. (C) Ambassador and the FM discussed Djibouti's 
non-inclusion in the World Bank/International Monetary Fund's 
program on forgiveness of African debt. Ambassador noted the 
inquiry by Ambassador Olhaye on possible forgiveness of 
Djibouti's debt, but said it had not been clear the breadth 
that the Ambassador intended when he raised this in 
Washington.  Embassy's understanding was that Olhaye was 
concerned about debt for geothermal energy production effots. 
Ambassador noted the lack of information on the actual amount 
of Djibouti's debt.  Embassy information placed the debt in 
the geo-thermal energy domain alone at around USD ten 
million.  The FM said he believed the amount was more in the 
region of USD twenty million.  He knew of borrowing several 
years ago for this research.  He said six wells were drilled, 
of which three were determined almost immediately to be 
useless and the other three problematic because of high 
corrosion from salt in the soil.  As to the total foreign 
debt, the FM promised to check and provide figures on both 
the original and remaining amounts.  He expressed certainty 
that debt payments were processed regularly. 
 
5. (C) Regarding geo-thermal energy, the Ambassador noted 
that a U.S. company was interested in developing this 
resource with Djibouti and was pleased that the President met 
with U.S. companies that might join Djibouti in developing 
wind, solar, and geo-thermal energy resources.  The FM noted 
the meetings and also said he understood that German 
companies were also active, especially in East Africa.  He 
said Kenya produces at least a hundred megawatts annually and 
that Ethiopia produces a small amount.  He believes small 
geo-thermal projects around the country would be viable, as 
would wind and solar energy.  The FM repeated that Djibouti 
needs currently some thirty megawatts of renewable energy and 
that national demands already exceed traditional production 
capacity. 
 
6. (C) Ambassador raised the matter of recent strikes at 
Djibouti port and the suggestion in some government circles 
that the U.S. Embassy was active in inciting port workers to 
strike, ostensibly because embassy-plated vehicles had been 
observed at the port prior to the  strikes.  She disavowed 
these rumors but noted that the U.S. embassy and government 
does have legitimate interests in some port functions.  U.S. 
Navy vessels frequent the port for ship visits and U.S. food 
aid enters Africa via Djibouti port.  The FM said he had 
heard the rumors but did not believe embassy personnel were 
in any way involved.  He further pointed out regional 
competition from other ports and said strikes could drive 
port business elsewhere, to the detriment of Djibouti's 
economy.  He also said the strikes were against the port's 
manager, Dubai Ports International (DPI), and not against the 
government.  He opined that the strikes vocalized 
dissatisfaction with management changes DPI was trying to 
implement, including hours of work and fringe benefits, to 
make the port more efficient. 
 
7. (C) In response to Ambassador's inquiry on the Prime 
Minister's just-concluded China trip, the FM commented that 
the Prime Minister's visit was official and long-planned. 
Djibouti wishes to develop its infrastructure -- roads, 
buildings and so forth -- and has worked several years with 
China on these issues.  A major plus to Djibouti is that 
China largely provides funds as grants/gifts, not as loans. 
Several Chinese projects in recent years have focused on the 
capital region.  The FM continued that the Prime Minister is 
seeking assistance to develop the Obock-Tadjoura road and 
other infrastructure projects in the northern part of 
Djibouti.  He said there is no military cooperation with 
China.  (Comment:  Though not mentioned during this session, 
the Chief of Djiboutian Armed Forces has had multiple 
discussions with Chinese officials.  Moreover, Djiboutian 
military personnel have just completed two visits to China in 
the past two months.  It is believed that Djibouti is seeking 
specialized equipment, such as Chinese night vision goggles. 
Djibouti has long requested this type of equipment from the 
U.S. End comment) 
 
8. (C) The Ambassador raised Trafficking in Persons 
protocols, which Djibouti has signed.  Other Government of 
Djibouti officials believed that merely signing the protocols 
could be seen as satisfying compliance.  She pointed out that 
while the signing is a good base, Djibouti needs to enact 
laws implementing the protocols.  The Ambassador also 
informed the FM that embassy staff were meeting with 
government and other personnel in preparation for 
transmission of the Human Rights Report. 
 
9. (C) FM Youssouf raised the issue of Millennium Challenge 
eligibility and queried Kenya's proximate acceptance when it 
had started at the same grade as Djibouti, which remains 
outside eligibility.  The Ambassador suggested that 
Djibouti's lack of infrastructure might be the reason 
Djibouti sees limited or no progress in the MCC domain.  She 
informed the FM that, regardless of some recent success in 
fighting corruption, Djibouti's lack of clear, permanent 
formulas for forward movement on governance issues was 
inhibiting progress, and she encouraged the FM to seek USG 
assistance as it works to meet MCA objectives. 
 
10. (C) The FM asked about USAID's Regional Agricultural 
Trade Expansion Support Program (RATES), that is now 
developing the mission's livestock project.  The Ambassador 
responded that RATES is moving forward and that there is hope 
for shipments to the Saudi Arabian peninsula during the Hajj. 
 She noted, however, that the involvement of several 
different ministries and entities at the working phase of the 
project might impede progress.  The FM said that different 
ministries had clear roles to play but not at the same time, 
and that  program managers should sequentially schedule 
inspections, licensing applications and other requirements to 
enable the program to move forward smoothly.  The Ambassador 
assured the FM that the project will work and also that 
remaining unpaid salaries owed to Djiboutians by earlier 
contractors in the project would be paid. 
RAGSDALE