Tiny Djibouti aiming to become global military, shipping hub

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Chinese President Xi Jinping, right, and Djibouti’s President Ismail Omar Guelleh at the Great Hall of the People in Beijing, last year. China built an electrified rail line linking the Ethiopian capital of Addis Ababa with Djibouti, as the former French colony aims to become a global shipping power. (Reuters)
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The sun sets in the port of Djibouti. The tiny Horn of Africa nation of Djibouti with less than 1 million inhabitants is of great geostrategic importance. (AP Photo)
Updated 09 April 2018
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Tiny Djibouti aiming to become global military, shipping hub

  • Djibouti, an arid Horn of Africa nation with less than 1 million inhabitants, also has become a military outpost for China, France, Italy and Japan.
  • On the chaotic streets of what has been called the “Singapore of Africa,” the jostling between the United States and China for influence is plainly seen.
Djibouti: Two fighter jets took off and roared over the Djibouti-Ambouli International Airport, a sprawling complex in this tiny African nation that is quickly becoming a strategic military and shipping outpost for the world.
Not far away, a massive US flag waved over transport planes parked in front of America’s only permanent military base in Africa, Camp Lemonnier, home to about 4,000 personnel.
Djibouti, an arid Horn of Africa nation with less than 1 million inhabitants, also has become a military outpost for China, France, Italy and Japan, with that nation’s first overseas base since World War II. Other powers including Saudi Arabia have expressed interest in the key location across the Bab el-Mandeb strait from the Arabian Peninsula and on one of the world’s busiest shipping corridors.
On the chaotic streets of what has been called the “Singapore of Africa,” the jostling between the United States and China for influence is plainly seen.
Before his firing by President Donald Trump, then-Secretary of State Rex Tillerson made a point of stopping in Djibouti on his Africa visit last month and noting its importance in the fight against the Al-Qaeda-linked Al-Shabab extremist group in neighboring Somalia and the Daesh group in the region at large. The US carries out drone missions in Somalia and Yemen from Djibouti, but the military paused air operations last week after a jet crashed and a helicopter was damaged during a landing.
China’s first overseas military base, which was manned last year, is just a few miles from the US one. The head of the US Africa Command, Gen. Thomas Waldhauser, earlier this year predicted that “there will be more.”
China’s economic interest is strong as well, with Djibouti borrowing up to $957 million from the Export-Import Bank of China to finance several projects in recent years, according to the China Africa Research Initiative at Johns Hopkins University. The Chinese built a new electrified rail line that links the capital of neighboring Ethiopia, Africa’s second most populous country and one of its strongest economies, with Djibouti as the nation aims to become a global shipping power.
“We sit on two of the busiest shipping lanes in the world. We are servicing the wider region, including some of the world’s fastest-growing economies,” the chairman of the Djibouti Ports and Free Zones Authority, Aboubaker Omar Hadi, said in an interview during a recent visit by The Associated Press.
He called Djibouti, a largely Muslim nation, a model of stability in an otherwise volatile region. It is also one of the world’s fastest-growing economies, with the World Bank projecting 7 percent growth this year.
The country made headlines earlier this year when it seized control of a container terminal run by the Dubai-based DP World, one of the world’s largest port operators, in a long-running legal dispute. If China takes over the terminal’s operations, the effects on supplying the US military base could be “significant,” the US Africa Command chief has warned.
That will not happen, Hadi’s office said: “Djibouti has no plan to give Doraleh Container Port to China.” It is now managed by a fully state-owned company controlled by the ports authority, it added.
Djibouti is currently investing $15 billion in local infrastructure projects that connect the region to global trade routes, including the expansion of ports, improved road and rail links and new airports, according to official figures provided to AP.
The country’s ports now have a total handling capacity of 18 million tons per year, officials said, and the new Doraleh Multipurpose Port, a $590 million joint project between the ports authority and China Merchants Port Holdings opened in May last year, is already working at full capacity. It is a separate entity from the Doraleh Container Port.
Now officials are pursuing a new project called the Djibouti International Free Trade Zone, expected to be the largest of its kind in Africa.
“Once complete it will span an area of 4,800 hectares (11,860 acres), following a total investment of more than $3.5 billion,” the ports authority chairman said. The first phase is expected to be complete by the end of the year.
Officials hope the ambitious infrastructure projects will not only raise Djibouti’s global image but also help it pay off significant debts.
During Tillerson’s visit, Foreign Minister Mahamoud Ali Youssouf acknowledged that Djibouti’s debt totals roughly 84 percent of its GDP, most of it to China. “The burden of debt is there, we are aware of it,” he said. “But let me tell you that it is so far manageable.”
One sign of investor confidence is whether China’s commercial banks begin lending to Djibouti as well, said Jyhjong Hwang, senior research assistant at the China-Africa Research Initiative.
Djibouti’s officials anticipate that the demand for their ports will grow as more African nations expand their economies. They also dismissed concerns about a recent deal by DP World, Ethiopia and Somalia’s semi-autonomous region of Somaliland to develop and manage the Port of Berbera there, seen by some as another reason for Djibouti’s seizure of the container terminal from DP World.
“Competition will make the region more attractive. East Africa’s economies are growing fast, and there is a clear demand for Djibouti’s infrastructure to support this growth,” the ports authority chairman said.
Djibouti’s residents said local business is booming as a result of the growing international military and shipping interest, despite the country’s unemployment rate of nearly 40 percent, and construction sites and new roads dotted the city. Economic growth has attracted entrepreneurs from India, Yemen, Gulf nations and elsewhere.
“Our company provides a fleet of cars for the army bases and we are really benefiting from it,” said Nour Omar, one of Djibouti’s best-known businessmen and general manager of local import and distribution business BSH Holding. “We aim to expand our services following their demand.”


Pakistan ex-PM in custody of anti-graft body amid Qatar LNG case

Updated 19 July 2019
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Pakistan ex-PM in custody of anti-graft body amid Qatar LNG case

  • Last year, the NAB ordered an inquiry into Abbasi over the alleged misappropriation of funds
  • Pakistan is currently receiving a supply of 500 million cubic feet per day of LNG from Qatar

LAHORE/ISLAMABAD: Former Pakistani Prime Minister Shahid Khaqan Abbasi was remanded in the custody of the National Accountability Bureau (NAB) for 13 days, a day after he was arrested in a case involving a multibillion-rupee liquefied natural gas (LNG) import contract to Qatar.
Abbasi, who is also the vice president of the opposition Pakistan Muslim League — Nawaz (PML-N) party, was presented before Judge Bashir Ahmed of an accountability court on Friday morning. The case has been adjourned until Aug. 1.
Speaking to journalists before his appearance at the court, Abbasi called his arrest “an attack on democracy.”
Last year, the NAB ordered an inquiry into Abbasi over the alleged misappropriation of funds in the import of LNG that the agency says caused a loss of about $2 billion to the national exchequer. He is also being investigated for allegedly granting a 15-year contract for an LNG terminal to a “favored” company. Abbasi rejects the allegations.
PML-N Sen. Mushahid Ullah Khan said Pakistan was facing “the worst energy crisis of its kind” when his party came to power after the 2013 general election, and the LNG deal was quickly finalized with Qatar to overcome it.
“The industry was shutting down with thousands of people getting unemployed, but this LNG supply helped us reverse the tide,” he told Arab News.
Khan said Pakistan’s LNG contract with Qatar was “the cheapest possible deal” the country could have gotten, and rubbished allegations of corruption and kickbacks.
“If there is something wrong in the contract, why is this government not reviewing it?” Khan asked.
Pakistan is currently receiving a supply of 500 million cubic feet per day of LNG from Qatar under a 15-year agreement at 13.37 percent of Brent crude price. It is a government-to-government agreement and the price can only be reviewed after 10 years of the contract.
“It is the worst example of political victimization by Prime Minister Imran Khan’s government,” PML-N Chairman Raja Zafrul Haq said on Friday after the accountability court remanded Abbasi in NAB custody. “Shahid Khaqan served the nation with dignity and did not commit any wrongdoings,” Haq added.
Abbasi was arrested on his way to Lahore to address a news conference along with PML-N President Shehbaz Sharif on Thursday.
He served as federal minister for petroleum in the Cabinet of former Prime Minister Nawaz Sharif when he finalized an LNG import deal with Qatar. Abbasi then served for less than a year as prime minister following the resignation of Sharif in 2017.
On Thursday, Pakistan opened technical bids of four international companies for the supply of 400 million cubic feet per day of LNG for a period of 10 years to fulfil the country’s rising energy requirements.
Officials told Arab News that a Qatari delegation, led by Emir Sheikh Tamim bin Hamad Al-Thani in June, resented that Islamabad had ignored its lowest offer of 11.05 percent of Brent for the fresh deal, and instead floated tenders seeking provision of LNG for 10 years from international companies.
The secretary of Pakistan’s Ministry of Energy said: “Yes, this is true. Qatar expressed its annoyance, but we are following our rules. Qatar has not submitted its bid to participate in the process.”
Khan won power last year vowing to root out corruption among what he describes as a venal political elite, and views the probes into veteran politicians — including Sharif and former President Asif Ali Zardari — as long overdue.
The NAB’s campaign has become a topic of fierce political debate in Pakistan, and its focus on the new government’s political foes has prompted accusations of a one-sided purge. The government denies targeting political opponents.
Commenting on Abbasi’s case, former NAB prosecutor Munir Sadiq said the anti-corruption watchdog would file a reference against Abbasi in an accountability court for prosecution, but only if it found irrefutable evidence against him.
“This case is now at the evidence-collection stage, and the NAB will file a reference in the court if it finds irrefutable corruption evidence against Abbasi during the investigation,” Sadiq said.
He added that any inquiry against Abbasi would be shelved after 90 days if corroborating evidence of corruption was not found.
“If a weak case will be filed against the accused, then he will surely receive support from the court,” Sadiq said.