1 00:00:00,120 --> 00:00:09,600 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:09,840 --> 00:00:12,840 Speaker 2: When I say Djibouti, what comes to your mind? 3 00:00:13,160 --> 00:00:14,760 Speaker 3: A lot of us had to go online. 4 00:00:15,080 --> 00:00:17,079 Speaker 4: Yeah, why that was yes? 5 00:00:17,280 --> 00:00:19,960 Speaker 2: And what if I told you that the small country 6 00:00:20,120 --> 00:00:23,959 Speaker 2: situated in the Horn of Africa plays a major role 7 00:00:24,120 --> 00:00:26,120 Speaker 2: in the troubled area of the Red Sea. 8 00:00:26,640 --> 00:00:29,720 Speaker 3: This is all Iran trying to cause troubles and trying 9 00:00:29,800 --> 00:00:32,919 Speaker 3: to make its message that they're against what's happening in 10 00:00:32,960 --> 00:00:36,239 Speaker 3: Israel without starting a full on war. They're letting its proxy, 11 00:00:36,479 --> 00:00:38,239 Speaker 3: the Houthis and Yemen do it instead. 12 00:00:38,840 --> 00:00:42,800 Speaker 2: Since the reigniting of tensions between Israel and Hamas at 13 00:00:42,800 --> 00:00:46,000 Speaker 2: the end of twenty twenty three, Jibouti has played a 14 00:00:46,040 --> 00:00:49,920 Speaker 2: strategic role in the international community's effort to resolve the 15 00:00:50,000 --> 00:00:55,840 Speaker 2: conflict while also managing its consequences. But when you're in 16 00:00:55,880 --> 00:01:00,000 Speaker 2: the eye of the cyclone, how do you maintain neutrality? 17 00:01:01,040 --> 00:01:04,479 Speaker 2: That's what we'll discuss this week with our reporter Simon Marx. 18 00:01:06,319 --> 00:01:10,080 Speaker 2: I'm Jennifer Zabasaja and this is the Next Africa Podcast, 19 00:01:10,360 --> 00:01:13,600 Speaker 2: bringing you one story each week from the continent driving 20 00:01:13,640 --> 00:01:17,240 Speaker 2: the future of global growth with the context only Bloomberg 21 00:01:17,280 --> 00:01:27,240 Speaker 2: can provide. Simon thanks so much for being with us. 22 00:01:27,319 --> 00:01:30,280 Speaker 2: So you're based in Kenya, but you just came back 23 00:01:30,319 --> 00:01:33,400 Speaker 2: from a trip to Djibouti. I don't know many people 24 00:01:33,520 --> 00:01:37,319 Speaker 2: who have actually been there. I myself have never visited 25 00:01:37,400 --> 00:01:40,200 Speaker 2: the country. So can you just start by setting the 26 00:01:40,200 --> 00:01:43,080 Speaker 2: scene for us and tell us what Jibouti is like 27 00:01:43,160 --> 00:01:44,080 Speaker 2: On the ground. 28 00:01:44,840 --> 00:01:48,360 Speaker 5: Djibouti is kind of a sleepy place. 29 00:01:49,160 --> 00:01:54,280 Speaker 4: It's very hot, nestled right on the coast on the 30 00:01:54,320 --> 00:01:59,080 Speaker 4: Red Sea, very picturesque in some ways, surrounded. 31 00:01:58,560 --> 00:02:00,520 Speaker 5: By blucy etc. 32 00:02:01,400 --> 00:02:04,280 Speaker 4: And yet as you go into the center, you're driving 33 00:02:04,400 --> 00:02:08,280 Speaker 4: past a lot of embassies, you feel the presence of 34 00:02:08,320 --> 00:02:12,360 Speaker 4: the international community. You have pretty slick roads, and you 35 00:02:12,400 --> 00:02:15,360 Speaker 4: can see the ports. They have several ports. They actually 36 00:02:15,400 --> 00:02:19,760 Speaker 4: have six different ports for this tiny little country. So 37 00:02:19,800 --> 00:02:23,920 Speaker 4: you quickly get the sense that this place is playing 38 00:02:24,240 --> 00:02:27,160 Speaker 4: a bit of an oversized role in a way. 39 00:02:27,639 --> 00:02:30,400 Speaker 2: And what exactly do you mean by oversized role? 40 00:02:31,000 --> 00:02:35,080 Speaker 4: Djibouti is this tiny little country on the tip of 41 00:02:35,160 --> 00:02:39,080 Speaker 4: the Horn of Africa, which often isn't in the news. 42 00:02:39,360 --> 00:02:42,920 Speaker 4: It goes very unnoticed, but it so happens to be 43 00:02:43,160 --> 00:02:47,880 Speaker 4: really right at the cusp of this crisis unfolding on 44 00:02:47,919 --> 00:02:51,520 Speaker 4: the Red Sea. It's literally kilometers away from where the 45 00:02:51,560 --> 00:02:56,639 Speaker 4: Hooties are firing missiles at naval vessels, and it has 46 00:02:56,639 --> 00:02:58,359 Speaker 4: a role to play in this crisis. 47 00:03:00,680 --> 00:03:04,040 Speaker 2: These ship attacks by the Hoothiets have caused chaos. 48 00:03:04,320 --> 00:03:07,320 Speaker 3: They started launching cruise drone. 49 00:03:07,040 --> 00:03:09,240 Speaker 5: Missiles attacking shipping in the Red. 50 00:03:09,080 --> 00:03:12,400 Speaker 1: Seat, and it's the latest in a continued at tax 51 00:03:12,440 --> 00:03:14,800 Speaker 1: within the Red Seat that is one. 52 00:03:14,720 --> 00:03:17,600 Speaker 5: Of the most important shipping lanes in the whole world. 53 00:03:19,080 --> 00:03:23,480 Speaker 2: Clearly, Djibouti is playing an important role on a geopolitical level, 54 00:03:24,080 --> 00:03:27,560 Speaker 2: and yet its coastline, as you mentioned in the story, 55 00:03:27,720 --> 00:03:30,480 Speaker 2: is one of the most dangerous in the world. 56 00:03:31,520 --> 00:03:37,560 Speaker 4: One of the key cornerstones of Djibouti's sort of rationale 57 00:03:37,640 --> 00:03:42,000 Speaker 4: I guess, and also its discourse internationally, is the absolute 58 00:03:42,040 --> 00:03:45,840 Speaker 4: need for stability. It's really dependent on it, and yet 59 00:03:46,200 --> 00:03:49,560 Speaker 4: it is completely surrounded, as you mentioned, by instability. 60 00:03:49,760 --> 00:03:51,520 Speaker 5: You know, recently you. 61 00:03:51,600 --> 00:03:55,080 Speaker 4: Have the crisis because of Hooti attacks on ships, but 62 00:03:55,160 --> 00:03:58,960 Speaker 4: even before that you had a lot of instability. To 63 00:03:59,040 --> 00:04:03,800 Speaker 4: the south in Somemalia, Al Shabab are very active. There 64 00:04:03,840 --> 00:04:07,800 Speaker 4: is a lot of smuggling in the area, be it 65 00:04:07,920 --> 00:04:12,640 Speaker 4: of drugs, of counterfeit goods and also of people. There's 66 00:04:12,680 --> 00:04:17,400 Speaker 4: a huge migration crisis that goes through Djibouti from countries 67 00:04:17,960 --> 00:04:21,800 Speaker 4: like Eritrea and Ethiopia. And then you have Eritrea to 68 00:04:21,880 --> 00:04:25,279 Speaker 4: the north, which does not have a good relationship with Djibouti. 69 00:04:25,440 --> 00:04:30,360 Speaker 4: They have disagreements over territory over the border. So all 70 00:04:30,400 --> 00:04:34,520 Speaker 4: in all, yeah, it's surrounded by forms of chaos. 71 00:04:34,760 --> 00:04:36,160 Speaker 5: Hence this messaging from the. 72 00:04:36,120 --> 00:04:39,320 Speaker 4: Government there that they are really you know, the one 73 00:04:39,400 --> 00:04:44,920 Speaker 4: country the international community can depend on for bringing stability. 74 00:04:44,839 --> 00:04:47,800 Speaker 2: Is the government aware of how strategic the country is 75 00:04:47,960 --> 00:04:50,760 Speaker 2: to actually maintaining stability in the region. 76 00:04:51,480 --> 00:04:55,400 Speaker 4: This is their selling point. This is something they literally 77 00:04:55,520 --> 00:05:01,520 Speaker 4: sell through the form of granting land to foreign and militaries. 78 00:05:01,680 --> 00:05:07,800 Speaker 4: There's five military bases, including French, the United States, the Japanese, 79 00:05:08,320 --> 00:05:12,480 Speaker 4: the Italians, and the Chinese also, and the government are 80 00:05:12,480 --> 00:05:16,520 Speaker 4: earning hundreds of millions of dollars every year from granting 81 00:05:16,560 --> 00:05:21,680 Speaker 4: these bases. Really you can kind of see that their 82 00:05:21,720 --> 00:05:24,960 Speaker 4: economy depends on it, right, they earn money from this 83 00:05:26,120 --> 00:05:30,640 Speaker 4: and their ports again depends on this stability. You know, 84 00:05:30,760 --> 00:05:34,440 Speaker 4: without stability, there are no naval vessels coming in and 85 00:05:34,520 --> 00:05:39,240 Speaker 4: actually you can see them taking advantage of what's happening 86 00:05:39,240 --> 00:05:43,240 Speaker 4: on the Red Sea as we speak, because major vessels 87 00:05:43,240 --> 00:05:48,280 Speaker 4: coming from Asia going north towards the Suez Canal are 88 00:05:48,320 --> 00:05:52,080 Speaker 4: doing what you call transhipment, which is basically unloading from 89 00:05:52,080 --> 00:05:55,640 Speaker 4: big vessels and putting containers onto smaller vessels as a 90 00:05:55,680 --> 00:05:59,400 Speaker 4: way of avoiding the risk of being hit by missiles. 91 00:06:00,200 --> 00:06:03,760 Speaker 2: And Simon, was this happening prior to the Israel Hamas 92 00:06:03,800 --> 00:06:06,919 Speaker 2: war or was this something that was really zeroed in 93 00:06:07,000 --> 00:06:10,960 Speaker 2: on as this conflict has continued over the past few months. 94 00:06:11,400 --> 00:06:14,279 Speaker 4: The transhipment business at the ports was something that was 95 00:06:14,320 --> 00:06:20,400 Speaker 4: sparked in direct relation to the Hooti attacks. So whereas 96 00:06:20,440 --> 00:06:24,599 Speaker 4: before a lot of larger vessels would simply bypass Djibouty 97 00:06:25,240 --> 00:06:28,400 Speaker 4: and either just go straight up through the Suez Canal 98 00:06:28,600 --> 00:06:32,480 Speaker 4: or they might stop at Jeddah in Saudi Arabia, they're 99 00:06:32,520 --> 00:06:35,000 Speaker 4: now being forced to take a bit of a detour 100 00:06:35,200 --> 00:06:38,120 Speaker 4: and come into the port in Djibouty where they unload 101 00:06:38,200 --> 00:06:44,680 Speaker 4: onto these smaller vessels. I think the rationale there is 102 00:06:45,400 --> 00:06:49,919 Speaker 4: that they're harder to attack just by the nature of 103 00:06:49,960 --> 00:06:53,040 Speaker 4: their size, but also maybe the ownership structures of these 104 00:06:53,080 --> 00:06:56,240 Speaker 4: vessels are different, you know, they might be linked two 105 00:06:56,320 --> 00:07:00,200 Speaker 4: countries that aren't being honed in on by the who. 106 00:07:00,240 --> 00:07:00,920 Speaker 5: He's in Yemen. 107 00:07:01,160 --> 00:07:04,520 Speaker 4: So this is something the chairman of the port, when 108 00:07:04,560 --> 00:07:07,520 Speaker 4: I spoke to him, he acknowledged, but he was also 109 00:07:07,600 --> 00:07:10,800 Speaker 4: quite careful to say, you know, this is not a 110 00:07:10,800 --> 00:07:13,280 Speaker 4: business plan that we want to see go on. You know, 111 00:07:13,320 --> 00:07:15,920 Speaker 4: we'd rather sea stability on the Red Sea. 112 00:07:15,600 --> 00:07:18,240 Speaker 2: Which is why Simon I found it so interesting in 113 00:07:18,600 --> 00:07:22,320 Speaker 2: your story. The Jibusian government says they don't want to 114 00:07:22,320 --> 00:07:25,400 Speaker 2: be brought into a war. They explicitly said that to you, 115 00:07:25,840 --> 00:07:28,080 Speaker 2: But they're essentially in the middle of a war. I mean, 116 00:07:28,440 --> 00:07:32,000 Speaker 2: how are they able to maintain this neutral objective position 117 00:07:32,600 --> 00:07:33,800 Speaker 2: as they describe it to you. 118 00:07:34,680 --> 00:07:38,120 Speaker 5: They're on a very tight tightrope here. 119 00:07:38,240 --> 00:07:43,160 Speaker 4: You know, they're navigating something that's very sensitive, and through 120 00:07:43,160 --> 00:07:46,280 Speaker 4: our reporting, you know, we found out that the onset 121 00:07:46,680 --> 00:07:51,559 Speaker 4: of the war on Gaza, the Americans actually did ask 122 00:07:51,720 --> 00:07:57,240 Speaker 4: the Jibusians if they could conduct more sort of offensive 123 00:07:57,440 --> 00:08:01,240 Speaker 4: like operations out of their military base in and the 124 00:08:01,320 --> 00:08:04,880 Speaker 4: Jibusians turned round to them and said, under no circumstances, 125 00:08:05,440 --> 00:08:07,680 Speaker 4: you know, as you go ahead and do this, do 126 00:08:07,800 --> 00:08:09,160 Speaker 4: not bring us into this war. 127 00:08:09,880 --> 00:08:10,600 Speaker 5: They have been. 128 00:08:10,640 --> 00:08:14,440 Speaker 4: Clear with their partners that they have to remain neutral. 129 00:08:14,520 --> 00:08:16,680 Speaker 4: But on the other hand, you know, they have to 130 00:08:16,760 --> 00:08:19,560 Speaker 4: sort of play ball a bit. So you've seen them 131 00:08:19,720 --> 00:08:26,040 Speaker 4: invite European naval ships into their ports from Sweden, from Greece, 132 00:08:26,080 --> 00:08:29,760 Speaker 4: from Germany. They're allowed to refuel, they're allowed to use 133 00:08:29,800 --> 00:08:34,439 Speaker 4: port services, so they are willing to help as long 134 00:08:34,600 --> 00:08:37,640 Speaker 4: as the work attempts to secure the Red Sea are 135 00:08:37,720 --> 00:08:40,000 Speaker 4: of a defensive nature, basically. 136 00:08:40,040 --> 00:08:42,000 Speaker 2: And do you think they're going to be able to 137 00:08:42,080 --> 00:08:43,959 Speaker 2: walk this tightrope for much longer? 138 00:08:44,640 --> 00:08:48,120 Speaker 4: You know, I think probably they will be able to 139 00:08:48,360 --> 00:08:51,080 Speaker 4: because they have the biggest character play in that is 140 00:08:51,160 --> 00:08:53,680 Speaker 4: their geographical location. 141 00:08:54,080 --> 00:08:58,080 Speaker 5: And in the end, most people are willing to abide 142 00:08:58,080 --> 00:09:03,000 Speaker 5: by Djibout's rules, so they kind of opened the door 143 00:09:04,240 --> 00:09:07,360 Speaker 5: in some way to anyone, but within reason. 144 00:09:13,240 --> 00:09:16,120 Speaker 2: After the break, we discuss how the latest events in 145 00:09:16,160 --> 00:09:20,079 Speaker 2: the Red Sea are indirectly benefiting the economy of Djibouti. 146 00:09:20,400 --> 00:09:27,720 Speaker 2: We'll be right back, Welcome back, Simon. Earlier we talked 147 00:09:27,720 --> 00:09:32,480 Speaker 2: about the strategic asset Jibouti plays globally, but for the country, 148 00:09:32,520 --> 00:09:36,840 Speaker 2: the current geopolitical position actually represents to a certain extent 149 00:09:36,880 --> 00:09:40,839 Speaker 2: and economic opportunity for them. Can you just describe that for. 150 00:09:40,880 --> 00:09:44,160 Speaker 4: US, revenues at the poor supposedly this year are going 151 00:09:44,200 --> 00:09:47,600 Speaker 4: to go up quite a lot, you know, thirty forty 152 00:09:47,640 --> 00:09:50,480 Speaker 4: percent as a result of this trendshipment business. 153 00:09:51,240 --> 00:09:54,640 Speaker 5: But you know, the Jibutis are quite keen to sort. 154 00:09:54,320 --> 00:09:58,400 Speaker 4: Of pain give another message whereby if there was stability 155 00:09:58,400 --> 00:10:02,520 Speaker 4: in Somalia and if Ethiopian economy stabilized and there was 156 00:10:02,600 --> 00:10:08,080 Speaker 4: less violence in Ethiopia, that would provide huge markets in 157 00:10:08,120 --> 00:10:10,600 Speaker 4: East Africa. You know, there's one hundred and ten hundred 158 00:10:10,600 --> 00:10:14,960 Speaker 4: and twenty million people in Ethiopia, and so if this 159 00:10:15,240 --> 00:10:18,840 Speaker 4: economy can grow, that would mean so much more business 160 00:10:18,840 --> 00:10:22,360 Speaker 4: Forgibiuty miles more than what you're getting from a bit 161 00:10:22,360 --> 00:10:26,800 Speaker 4: of transhipment off the Red Sea. So they're quite acutely 162 00:10:26,840 --> 00:10:29,560 Speaker 4: aware that, yes, there's a short term benefit, but on 163 00:10:29,600 --> 00:10:32,880 Speaker 4: the other hand, this market of East Africa is so 164 00:10:33,000 --> 00:10:36,160 Speaker 4: much bigger if they, you know, can just stabilize a bit. 165 00:10:36,920 --> 00:10:39,560 Speaker 2: I wonder does the rest of the region see it 166 00:10:39,600 --> 00:10:39,960 Speaker 2: that way? 167 00:10:40,440 --> 00:10:41,000 Speaker 5: Definitely. 168 00:10:41,120 --> 00:10:46,880 Speaker 4: Ethiopia, for example, have recently made moves to have port access, 169 00:10:47,360 --> 00:10:51,360 Speaker 4: have access to the coast via Somaliland, which is a 170 00:10:51,360 --> 00:10:53,640 Speaker 4: breakaway state of Somalia. 171 00:10:53,840 --> 00:10:54,480 Speaker 5: That's caused a. 172 00:10:54,440 --> 00:10:58,280 Speaker 1: Lot of apro Ethiopia sign a deal with Somaliland to 173 00:10:58,320 --> 00:11:01,200 Speaker 1: gain access to the Red Sea. But the deal by 174 00:11:01,320 --> 00:11:05,360 Speaker 1: landlocked Ethiopia risks heightening tensions in a region it's already 175 00:11:05,440 --> 00:11:06,719 Speaker 1: racked by conflict. 176 00:11:06,840 --> 00:11:10,319 Speaker 6: The US, EU and African Union are calling on Ethiopia 177 00:11:10,360 --> 00:11:12,679 Speaker 6: and Somalia to de escalate tensions. 178 00:11:12,800 --> 00:11:17,600 Speaker 4: The State of Somalia doesn't see this as legitimates. 179 00:11:17,960 --> 00:11:21,040 Speaker 6: They're not happy because they still consider Somali land a 180 00:11:21,040 --> 00:11:24,440 Speaker 6: part of their sovereign territory and their timing the agreement 181 00:11:24,559 --> 00:11:30,079 Speaker 6: is an act of aggression against their sovereign and territorial integrity. 182 00:11:30,200 --> 00:11:32,680 Speaker 4: So all eyes are on the Red Sea. It's a 183 00:11:32,760 --> 00:11:36,959 Speaker 4: hugely coveted area. You have Russia making moves with their 184 00:11:36,960 --> 00:11:40,440 Speaker 4: Atrayer at the moment to get access to the port's 185 00:11:40,960 --> 00:11:43,160 Speaker 4: system there and perhaps a naval base. 186 00:11:43,920 --> 00:11:49,199 Speaker 5: So yeah, it's fair to say that Jibouti's coastline is 187 00:11:49,320 --> 00:11:50,520 Speaker 5: very highly coveted. 188 00:11:51,160 --> 00:11:55,400 Speaker 4: They've also tried to bring on board the Sudanese port 189 00:11:55,480 --> 00:12:00,520 Speaker 4: Sudan to have a concession. The Emiratis have wired a 190 00:12:00,640 --> 00:12:04,560 Speaker 4: port in Somaliland already and were a number of years 191 00:12:04,559 --> 00:12:08,280 Speaker 4: ago kicked out of Djibouti and replaced by the Chinese. 192 00:12:08,960 --> 00:12:13,959 Speaker 4: In general, actually this coastline is quite undeveloped. You know, 193 00:12:14,080 --> 00:12:17,400 Speaker 4: there's not a huge amount of infrastructure, and yet there's 194 00:12:17,440 --> 00:12:23,600 Speaker 4: these huge populations which are developing quickly and so widely speaking, 195 00:12:23,760 --> 00:12:27,319 Speaker 4: from the United Emirates to the Chinese to the Russians, 196 00:12:27,920 --> 00:12:30,440 Speaker 4: a lot of people are looking to sort of get 197 00:12:30,440 --> 00:12:32,640 Speaker 4: a piece of. 198 00:12:30,960 --> 00:12:34,840 Speaker 2: This Pae and simon for the population in the country. 199 00:12:35,000 --> 00:12:38,200 Speaker 2: Is this actually translating on the ground. 200 00:12:38,480 --> 00:12:42,280 Speaker 4: Yeah, I think this is perhaps could we say, you know, 201 00:12:42,360 --> 00:12:48,240 Speaker 4: the biggest black mark against the Jubutian government, there isn't 202 00:12:48,280 --> 00:12:50,880 Speaker 4: a huge amount of what you would call, I guess 203 00:12:50,960 --> 00:12:54,880 Speaker 4: trickle down, you know, from the successes they've had through 204 00:12:54,920 --> 00:12:58,280 Speaker 4: their ports, through their sort of role as an international 205 00:12:58,320 --> 00:13:01,960 Speaker 4: mediator to the general or public. You know, a lot 206 00:13:02,000 --> 00:13:05,120 Speaker 4: of the population is still very poor. You know, World 207 00:13:05,160 --> 00:13:10,360 Speaker 4: Bank figures show extreme poverty up to about one and four. 208 00:13:11,280 --> 00:13:15,360 Speaker 4: So there's a massive job of integrating the population into 209 00:13:15,400 --> 00:13:20,719 Speaker 4: the workforce, creating jobs from these success projects, and that 210 00:13:21,000 --> 00:13:25,120 Speaker 4: again boils down to government policies and education on training, 211 00:13:25,600 --> 00:13:29,000 Speaker 4: and you know, they say they are trying to diversify 212 00:13:29,040 --> 00:13:33,840 Speaker 4: the economy into other sectors. Green energy is one, logistics 213 00:13:33,880 --> 00:13:38,280 Speaker 4: is another. They have a large dry port which on 214 00:13:38,360 --> 00:13:40,800 Speaker 4: paper could generate quite a few jobs. 215 00:13:41,400 --> 00:13:45,240 Speaker 2: Thank you so much, Simon Marx joining us there from Nairobi. 216 00:13:45,800 --> 00:13:49,280 Speaker 2: Look Perhaps unlike any of the other fifty three countries 217 00:13:49,400 --> 00:13:53,840 Speaker 2: on the African continent, Djibouti as an international asset is 218 00:13:54,040 --> 00:13:59,360 Speaker 2: evident in its location, investment, and allies. But the future 219 00:13:59,440 --> 00:14:03,560 Speaker 2: success of the small East African country and maybe even 220 00:14:03,600 --> 00:14:07,080 Speaker 2: those around it, may just depend on its ability to 221 00:14:07,200 --> 00:14:12,440 Speaker 2: keep the surrounding chaos at bay. You can read more 222 00:14:12,480 --> 00:14:16,040 Speaker 2: about this story at Bloomberg dot com, and don't forget 223 00:14:16,080 --> 00:14:19,440 Speaker 2: to follow and review this show wherever you usually get 224 00:14:19,480 --> 00:14:23,600 Speaker 2: your podcast. I'm Jennifer Zabasaja. Thank you so much for listening.