DJIBOUTI: MARCH ECON-ESTH ROUNDUP

UNCLAS SECTION 01 OF 02 DJIBOUTI 000335

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SUBJECT: DJIBOUTI: MARCH ECON-ESTH ROUNDUP

REF: 09 DJIBOUTI 93

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IN THIS ISSUE:
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1. (U) This March 2009 Djibouti Economic-ESTH roundup
includes:

--Djiboutian President Guelleh visits U.S.-led salt mining
project at Lac Assal
--Progress underway on Djiboutis new Commercial Code
--France and Djibouti sign investment risk convention
--France approves USD 30 million in loans to Djibouti Telecom
--Djibouti hosts regional environmental conference

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PRESIDENTIAL VISIT MARKS PROGRESS
FOR U.S.-LED SALT INVESTMENT PROJECT
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2. (SBU) President Guelleh traveled to Djiboutis Lac Assal
salt lake March 1 to view progress on an American-led salt
mining project. The Overseas Private Investment Corporation
(OPIC)-supported U.S. investment fund Emerging Capital
Partners holds a majority stake in the salt mining project,
led locally by Salt Investment, Inc. (reftel). The project
represents the largest private U.S. investment in Djibouti.
Salt Investment plans to harvest salt, using environmentally
conscious renewable methods, from an 11,000 hectare area of
the salt lake. President Guelleh also visited the site of a
future industrial port at the adjacent Bay of Ghoubet; Salt
Investment plans to ship salt directly from this port to
markets in the Middle East and Asia. Other planned secondary
installations include housing, health, and leisure
infrastructure for Salt Investment employees; the investors
project initial creation of 150-200 local jobs.

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NEW COMMERCIAL CODE IN THE WORKS
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3. (U) The GODJ held a national validation workshop for the
new Commercial Code March 17-19. The workshop brought
together civil society representatives, the legal community,
the Chamber of Commerce, Justice Ministry personnel, and
officials from other GODJ ministries to discuss the new code.
The new Commercial Code is the product of seven years of
research by a committee dedicated to modernizing the previous
statutes. The new code, which included input from
international experts, is aimed at increasing the security of
commercial transactions. It is directed both toward national
activities, and foreign direct investment projects. According
the Minister of Commerce, the new code was designed to
harmonize Djiboutis legal regime with international
standards, while adapting to local needs.

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FRANCO-DJIBOUTIAN INVESTMENT RISK CONVENTION
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4. (U) On March 18, the private Bank for Commerce and Industry
(BCI),and the French Agency for Development (AFD) signed a
convention on sharing the risks for investments made by the
private sector in Djibouti. The signature of this agreement,
the first of its kind, establishes the framework for BCI to
create an AFD-backed finance mechanism for the private sector.
The agreement is intended to encourage further foreign direct
investment in Djibouti.

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FRANCE APPROVES USD 30 MILLION IN
LOANS TO DJIBOUTI TELECOM
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5. (U) On March 2, Mr. Yves Budot, Director of the French

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Agency for Development (AFD),and Mr. Abdourahman Mohamed,
Director General of Djibouti Telecom, signed a USD 30 million
loan agreement. The loans will enable Djibouti Telecom, the
monopoly telecom parastatal, to fund its participation in the
international consortium created to build the Europe-India-
Gateway (EIG) submarine cable. The EIG is expected to boost
telecommunications performance and capacity in Djibouti. The
EIG will also be connected to the EASSY cable linking Djibouti
to South Africa. Improving telecommunications capabilities is
part of the GODJs strategy to cement Djiboutis status as a
regional transport and services hub.

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DJIBOUTI HOSTS REGIONAL ENVIRONMENTAL CONFERENCE
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6. (U) From March 3-5, Djibouti hosted the PERSGA Council of
Ministers for the first time. PERSGA, the Regional
Organization for the Conservation of the Environment of the
Red Sea and Gulf of Aden, is an intergovernmental body
dedicated to the conservation of the coastal and marine
environments of the Red Sea, the Gulf of Aqaba, the Gulf of
Suez, the Suez Canal, and the Gulf of Aden surrounding the
Socotra Archipelago and nearby waters. PERSGAs activities
are legally based on the 1982 Jeddah Convention. Its members
include Djibouti, Egypt, Jordan, Saudi Arabia, Somalia, Sudan
and Yemen. The twelfth Council of Ministers closed with the
adoption of the Djibouti Declaration, which reaffirmed
member states strong commitment to the Jeddah convention,
registered concern about the negative impact of climate change
on ecosystems, biodiversity, and human populations, and
committed member states to undertake appropriate measures to
monitor and mitigate these effects.
SWAN