1. (U) Summary: Staff Members of the House International
Relations Committee Malik Chaka and Pearl Alice Marsh met 31
March with Director of Bilateral Relations at the Ministry of
Foreign Affairs, Mohamed Ali Hassan, to discuss Djibouti's
relations with the United States, the counter-terrorism
effort and possibilities for economic development. Hassan was
very receptive to the Staff delegation and said the Ministry
considers U.S.-Djibouti relations to be excellent overall.
Military-to-military relations were very strong and Djibouti
was willing to expand them further. Hassan also noted that
since the re-opening of the USAID office in Djibouti, the
civil cooperation aspect of relations had grown. He added the
government hopes to have greater knowledge, understanding and
cooperation with the U.S. to encourage U.S investment in
Djibouti. Hassan expressed concern about the slow pace of
Foreign Military Financing (FMF) programs, noting that only a
few of the 12 proposed programs had been completed to date.
End Summary.



2. (C) Director of Bilateral Affairs at the Ministry of
Foreign Affairs, Mohamed Ali Hassan, told Staff Members of
the House International Relations Committee Malik Chaka and
Pearl Alice Marsh the Ministry considers U.S.-Djibouti
relations to be excellent. Hassan said he was certain the
staff members had followed the cooperation over the last four
years and noted the cooperation is much stronger today. He
added the Government of Djibouti was willing to deepen
cooperation with the U.S. militarily, including the expansion
of Camp Lemonier, and economically. Chaka replied he was
pleased to hear the Ministry has such an opinion on
U.S.-Djibouti relations. He said the current cooperation was
important to the U.S. because Djibouti is a Muslim country
and the two countries work well together militarily in the
counter-terrorism effort. Chaka asked Hassan, in terms of
deepening the relationship, which areas needed to be
strengthened?



3. (C) In response to Chaka's question on which areas of the
relationship Hassan thought needed to be strengthened when he
spoke of deepening the two countries' cooperation, Hassan
stated that from the military aspect Djibouti is a base for
counter-terrorism operations and is willing to expand its
role. He continued Djibouti would like to see greater
implementation of programs proposed under the East Africa
Counter-Terrorism Initiative (EACTI). Under EACTI Djibouti is
slated to receive 25 million USD in assistance to reinforce
security capabilities with the main program focus being
border and coastal security. However, Hassan said, many of
the programs proposed in 2002 had not yet been implemented
and were necessary to improve the military's ability to
secure Djibouti. He added he understood that Foreign Military
Financing (FMF) was a very slow process and Djibouti was
working to get all programs done. (Note: While many of the
programs include equipment and supplies that have not yet
reached Djibouti, 14 Foreign Military Sales (FMS) cases have
been established in the FMF system. End Note.) He said
training programs had been going very well but other programs
had not yet started. Hassan noted that border security along
the Djibouti-Somaliland border was a serious issue for them
since it lies only 16 kilometers from the capital and there
is a large contraband problem in that area. He also explained
that many of the programs were slated for fiscal year 2004,
2005 or 2006 funding but only a few of the 12 proposed had
been started.



4. (C) Marsh asked how Hassan would assess the coastal
security, whether it was a function of the navy, police, or
coast guard, and what was Djibouti's security strategy?
Hassan said when the U.S. military arrived in 2002, it made
an assessment of Djibouti's capabilities. He said the
findings of the survey indicated good potential with the
present resources, but the coastal security program needed
improvement. Some of the ideas the Djiboutian government put
forward was a naval station in Tadjourah and high-speed small
boats for interdiction. Hassan noted that Djibouti has some
natural security features. He said compared to Yemen, whose
port lies directly on the Red Sea and thus is more
vulnerable, Djibouti's port was naturally protected by the
fact that a boat must go into the gulf in order to reach
Djiboutian waters. He added that this allowed Djibouti to
control its waters better because they were more confined.
Hassan also commented that a new portion of the U.S.
cooperation was the provision of a maritime expert who would
be stationed in Djibouti for a period of two years and could
act as a liaison.



5. (C) Hassan said in response to Marsh' follow-up on whether
Djibouti had an interdiction strategy, that Djibouti was in
process of implementing the ISPS code but qualifications for
programs that supply surplus coastal security boats had been
implemented by the Djiboutian coast guard. He noted that
Djibouti, with the assistance of the U.S. military, were
working on getting small boats for interdiction and expected
them in the coming months. Chaka commented that it was very
important that Djibouti implement the ISPS code since many
countries that were non-compliant have had trade negatively
affected. Hassan said since Ethiopia uses Djibouti's port for
100 percent of its import/export trade, bilateral talks had
addressed the need for ISPS compliance for several years.



6. (C) On economic cooperation, Hassan said there was not a
long history with the U.S. because Djibouti has always been a
country with French presence. He said because the context for
economic cooperation was not favorable, the relationship with
the U.S. had not been developed since independence. In his
opinion, this had contributed to a loss of time to understand
the other country , especially in the thirteen years the
USAID office was closed. Hassan noted that since USAID
re-opened in 2003 and had started education, health, and
livestock programs the cooperation has been good. He added
the benefit of having USAID programs was the population could
see the good things the U.S. was doing and have become more
interested in the U.S. Hassan explained that many times if an
African is asked about U.S. involvement the response is
usually that the U.S. only goes to places that serve its
interests. He continued that because the programs in Djibouti
allow the population to see the benefit, the Government can
say that yes, the U.S. is here for its interests, but it is
also in our interest to work towards common goals. Hassan
said the programs' implementation has been very quick, but
total impact could not yet be judged as the programs span
three years.



7. (C) In response to the question on how the U.S. can
support Djibouti's economic development, Hassan said English
language programs would be the priority for the Government.
He explained that because Djibouti's goal for the new port
was to specialize in being a service provider, it would be
necessary for the workers to speak English. Hassan said the
Government has developed programs with the U.S. Embassy, the
British Council and the Djibouti Chamber of Commerce to teach
English to professionals. He also said the U.S. could aid
economic development by bringing in investors, specifically
to the new port at Doraleh. Hassan noted the business
communities in each country did not have alot in common, but
the Government always looked for ways to develop regional
projects whenever it goes to the U.S. He continued that
Djibouti has seen Asian countries be much more aggressive in
investing in African countries. In terms of involvement of
American Chambers of Commerce, without the exchange of
information there was no way for them to know the potential
in Djibouti. A problem Hassan cited for attracting European
and American investors was the reliance on agencies in an
investor's home country for all the information about
Djibouti, which is often outdated and inaccurate. Hassan said
that while there are some factors that might discourage
investment, such as language and lack of information,
Djibouti does have good banking systems and a liberal
economy. He added it was necessary for Djibouti to go
directly to the investors in order to attract them.



8. (C) Hassan said Asian outreach for investment in Djibouti
currently has China and Japan on board, but the Government is
also trying to attract investors from Singapore, Hong Kong
and other pacific countries through the use of honorary
consuls, who are often local businessmen. He said whenever
President Guelleh makes an official visit to one of its Asian
partners, he always has a breakfast meeting with the business
community. Hassan said the Government is working toward
developing interest in all its partner countries in Asia, but
has only seen real results from Dubai. He added that while
the Djiboutian market is small, the possibility to explore
the Ethiopian and COMESA markets was interesting to many
investors. As an example of some of the Asian interests, he
said there have been investments in importing Chinese cars
and services for tourism. Hassan noted that a Singaporean
businessman expressed interest in opening an international or
English language school that could service the region. He
said the government has also talked to India and South Africa
about pharmaceuticals. Hassan also said the Government tries
to address economic issues whenever there are political
discussions between the regional organizations such as the
Intergovernmental Authority on Development (IGAD) or the
African Union.



9. (C) In response to the question on how the Asian forum
initiatives began, Hassan said many were started by Asian
countries but collaborations during political talks have also
led to some partnerships. Hassan commented that Japan, who
has been very active in African development for the past 25
years, is now asking its Asian counterparts to do the same.
He added that there would be a conference in Indonesia in
April to develop an action plan for African development.
Hassan also said that many of its Asian partners have
developed from one country following suit after seeing a
cooperation with another country start.



10. (C) Regarding the issue of getting information to
investors in America, Hassan said there was the issue of a
language barrier. Many Djiboutians do not speak English and
none of the information on Djibouti's websites regarding
investment are in English either. He said the Government is
working towards developing for the future by establishing
higher education partnerships with universities in anglophone
countries. The hope of this program was to develop a base of
English speakers in its students giving Djibouti a prepared
workforce once they graduate. An example of one program is
Dubai Ports International's, the company operating the
airport and ports, policy of sending Djiboutians that they
hire to Dubai for a year of training, during which the
employee learns English.



11. (C) Hassan raised the issue of the Millennium Challenge
Account (MCA) as a tool for economic development for
Djibouti. He said the Government considers gaining MCA
eligibility for the 2005-2006 round as very important, but it
must ensure that all the information needed is changed from
French to English and is accurate. He added the government is
concentrating on education and health in order to meet MCA
requirements. Hassan said Djibouti would like to see how,
with the help of the U.S., it can get to MCA levels.
RAGSDALE