DJIBOUTI: FY10 BFIF PROGRAM PROPOSAL

UNCLAS DJIBOUTI 000066 SIPDIS STATE FOR EEB/CBA D. WINSTEAD NAIROBI FOR FCS KTBD EWMN E.O. 12958: N/A TAGS: BEXP BTIO EINV ETRD ECON DJ SUBJECT: DJIBOUTI: FY10 BFIF PROGRAM PROPOSAL REF: 10 STATE 126674; 09 DJIBOUTI 1508 ¶1. SUMMARY AND ACTION REQUEST. Embassy Djibouti, a non-Commercial Service post, requests USD 3,500 in FY10 BFIF funds (ref A) to organize a three-day workshop on entrepreneurship in Djibouti before October 2010. The proposed workshop--to be executed in collaboration with the Djiboutian National Investment Promotion Agency (NIPA)--will include sessions on legal framework, transparency and best practices in accounting, and female entrepreneurship. Post will invite several U.S. companies working in Djibouti to participate in the workshop, and key sessions will focus on best practices for working with U.S. business. By providing a forum for interaction with U.S. business in Djibouti, post hopes to better equip young Djiboutian entrepreneurs to partner with U.S. and other foreign companies in Djibouti. Several U.S. companies work in Djibouti as contractors for the U.S. military at Djibouti's Camp Lemonnier, the only U.S. military base in sub-Saharan Africa. Targeted participants will include university students, entrepreneurs, selected ministries and government agencies, the Djibouti Chamber of Commerce, and the banking community. The proposed workshop would support several core Mission Strategic Plan goals, including Investing in People, Economic Growth, and Governing Justly and Democratically. END SUMMARY AND ACTION REQUEST. -------------- JUSTIFICATION -------------- ¶2. Djibouti continues to combat serious challenges of poverty, food insecurity, and unemployment. However, its vibrant service-based economy has registered positive growth rates for several years (ref B). Absent cultivable land or a strong industrial sector, Djibouti imports most basic goods, and has developed a service-based economy centered around the world-class Port of Djibouti, managed by Dubai Ports World. Djibouti's assets include a strategic geographic location, an open trade regime, a stable currency, and substantial tax breaks for investors. The GODJ has actively and successfully courted foreign direct investment, and growing investment inflows have the potential to create jobs and reduce Djibouti's 59 percent unemployment rate. To help ordinary Djiboutians benefit from the country's growing economy, the GODJ has begun promoting entrepreneurship, including through innovative micro-credit programs, and also by allowing for significant growth in the credit markets of the private banking sector. Djibouti has a young population, with over 75 percent of Djiboutians under 25 years of age. This new generation needs training, resources, and encouragement to build a future based on private entrepreneurship, rather than dated ideas of security in a government job, or the bleak alternative of poverty and unemployment. Djiboutian women, long very active in the informal sector, also need training and resources to shift and grow their business into the formal sector. ¶3. The Djibouti Chamber of Commerce's Business Directory lists over 600 local businesses in Djibouti. The vast majority of these enterprises use rudimentary management and accounting tools. Djibouti's unemployment rate is estimated at over 59 percent in urban settings, and is even higher in rural areas. The University of Djibouti counts more than 3,000 registered students, all of whom will be looking for a job in the coming two to three years. The Government of Djibouti is currently the country's main employer, followed by the port, public firms, and foreign military forces. Government and public sectors cannot be expected to absorb a large influx of new graduates. Entrepreneurship must become a key tool to combat Djibouti's staggering unemployment rates. The purpose of the proposed workshop is to help introduce current and future entrepreneurs to the tools that can help them professionalize, sustain, and expand their businesses. A further objective of this workshop is to take a closer look at Djibouti's laws and regulations governing entrepreneurship, encourage women entrepreneurs, and create conditions favorable to future partnerships between U.S. and Djiboutian business. -------------- EXPECTED IMPACT -------------- ¶4. One of the major expected impacts of the proposed workshop would be to plant and encourage a culture of entrepreneurship among young Djiboutian college graduates. In the past, some U.S. companies working in Djibouti have reported a lack of professionalism among local companies. The proposed workshop will help remedy this situation by raising awareness among local entrepreneurs on best practices, transparency, and expected standards when dealing with U.S. companies. Djiboutian business leaders have repeatedly expressed a strong interest in commercial relationships with U.S. businesses. Post anticipates that this workshop will allow for fruitful contacts between U.S. businesses and their Djiboutian counterparts. In addition, post anticipates that this workshop will shed some light on the constraints facing local enterprises, and fuel momentum toward institutional solutions. Finally, post anticipates that the proposed workshop will begin the ground work for a future "Guide for the Djiboutian Entrepreneur." Post has received positive feedback from several possible collaborators and invitees in the Djiboutian business community and Djiboutian government on the proposed workshop concept, and anticipates that the event would draw strong participation and high-level support. -------------- MILESTONES AND COST DETAILS -------------- ¶5. The three-day workshop is tentatively planned for October, 2010. The first day will begin with a presentation by a business lawyer and a senior representative of the Ministry of Commerce on the judicial and legal framework governing the activities of entrepreneurs in Djibouti. It will be followed by a session about the opportunities and constraints facing entrepreneurs, led by a panel of representatives from the National Investment Promotion Agency, the commercial banking community, the Djibouti Economic Development Fund, and the private sector. The second day will focus on accounting and auditing, addressed by a panel comprised of an accounting firm, the Chamber of Commerce, and a representative of the GODJ Tax Department. Each session will be followed by questions and discussions. The last and flagship day will be devoted to U.S. business experience in Djibouti, and advice from U.S. companies on how to work with U.S. business. The workshop will conclude with a set of recommendations compiled from the presentations and discussions of the previous two days. ¶6. The cost details are as follows: Advertisement: USD 500 Coffee Breaks (3 days): USD 1,000 Conference Room Rental (3 days): USD 1,500 Publication of Conference Follow-Up Materials: USD 500 Total: USD 3,500 -------------- POINTS OF CONTACT -------------- ¶7. Post points of contact for this proposal are: Political/Economic Officer Rebecca Hunter (HunterRK@state.gov) and Economic/Commercial Specialist Abdi Mahamoud (mahamouda@state.gov) SWAN