Interview: Ilyas Moussa Dawaleh
How can Djibouti implement an economic model that is inclusive and reduces poverty?
ILYAS MOUSSA DAWALEH: To guarantee sustainable and long-term economic development, we have to focus on the realisation of Djibouti Vision 2035, which emphasises the expansion of the country’s soft and hard infrastructure. Where there were none, we have now built schools, clinics and extensive port, road and soon rail infrastructure. Although when looking back we can already be proud of our achievements, there is still a lot of work to be done. Our population – mostly concentrated in Djibouti city – has increased dramatically. This, coupled with high levels of students finishing our free education system, poses a challenge to Djibouti’s limited-size economy, which simply cannot absorb the number of new people entering the labour market every year. To create more employment and lift people out of poverty, the country needs to foster business. In this context, the priority is to diversify our economy, taking into account the key-areas targeted within SCAPE (the five-year development plan of Vision 2035) such as tourism, ICT, fisheries and manufacturing industries. At the same time, we need to provide the private sector with a labour force that is skilled to match the needs of the market, while offering our companies and foreign investors access to the regional market. Djibouti is a small economy, and the only way to reach a critical mass is by creating a chain economy.
What steps can Djibouti take to diversify its international partners in the future?
DAWALEH: We have indeed been diversifying our investment partners. Before, we used to be primarily focused on the West. However, with globalisation processes at play, new opportunities have arisen. The Gulf countries remain very important partners, as does our historic partner, France, and more generally the EU and the US. However, as the world economy turns towards the East, it is logical for Djibouti to also develop closer ties with Asia, notably China and India but also Turkey. Located on the Red Sea coast, Djibouti is the first entry point towards the East from Europe and therefore plays an important role in connecting trade flows between different continents.
What measures can be taken to further strengthen Djibouti’s business climate?
DAWALEH: Many reforms have already been implemented to institutionalise the public-private sector dialogue, which is providing businesses active in Djibouti with a platform to share their views on which reforms the government should pursue. This is particularly important given the private sector’s leading role in furthering economic development.
We are currently working to improve the judicial system, an area where a lot of work has already been done. For example, a law has been passed which provides banks the opportunity to seek mediation from a notary, in cases where clients default on loan payments. The measure is expected to avoid time and financial losses, by preventing banks from having to go through lengthy tribunal procedures that can last several years, during which time the bank is unable to recoup its funds or use them to finance the country’s economy.
In terms of reducing bureaucracy, the one-stop shop mechanism will be in place starting in 2016 – a measure aimed at improving the ease of doing business. In terms of taxation, we are currently preparing reforms that should simplify procedures and increase transparency. Finally, our ambition is to also have a court of arbitration based on the British common law model, and to further invest in the Djiboutian educational system so as to allow foreign investors to find sufficient local know-how.
Read More from OBG
