1. (C) Chinese development activity in Djibouti has been
robust, with major projects as well as feasibility studies,
minor projects and assistance for renovation of existing
facilities. Major projects include a sports stadium built in
between 1991 and 1993 at a cost of USD 11 million (loan) and
another stadium project to begin later this year.



2. (C) Based on information post has been able to compile,
following is list of major Chinese assistance programs in
Djibouti:

-- 1983/85 Construction of the Palais du Peuple (People's
Palace) USD 10 million (loan).

-- 1991/93 Construction of Djibouti City Stadium, USD 11
million (loan)

-- 1994 Food Aid, USD 0.5 million (grant)

-- 1996/98 Construction of 55 homes, USD 2.6 million (loan)

-- 1997 Construction of wing of Peltier Public Hospital,
USD 0.45 million (loan)

-- 1981/2000 Provision of Equipment (military, sports,
computers, etc.), USD 5 million (grant)

-- 2001/2 Construction of Ministry of Foreign Affairs, USD
2.41 million (grant)

-- 2003 Provision of sanitation trucks and equipment,
USD 0.678 million (grant)

-- c2004 Construction of Omnisport Center (Dikhil), USD
0.91 million (grant)

-- c2004 Art Center (Girls' orphanage), USD 0.622 million
(grant)



3. (C) Cooperation between China and Djibouti has been widely
covered in "La Nation" over the ensuing years, and has been
described as "exemplary." In Ambassador's meeting earlier
this week with Mohamoud Youssef Ali, Minister of Cooperation
in the Ministry of Foreign Affairs, Ali touted Chinese
participation in the development of Djibouti. He has
commented previously that he believes that a cooperation
mechanism between major donors on economic assistance to
Djibouti would be extremely beneficial.



4. (C) Comment: Post notes that China is providing on
occasion a kind of economic assistance, through grants, that
Djibouti's government favors over loans. According to Ali,
Djibouti has "limited capacity" to service loans. In his
meeting with Ambassador, he cited Gulf states that in the
past gave bilateral assistance to Djibouti but who now prefer
multilateral assistance via loans. He admits that those
states have been deeply affected economically by the first
Gulf war in 1990 and want better control over how aid money
is ultimately used. End comment.

RAGSDALE