The US and the EU must work with African governments to harmonize gold export taxes to reduce smuggling and promote conflict-free gold, says the investigative and policy group The Sentry. In 2014, Guelleh used the threat of a Russian base in Djibouti to raise Washington’s rent on its base at Camp Lemmonier, a facility that the US has used for nearly two decades to conduct counterterrorism operations in Africa and the Arabian Gulf. Huawei Technologies Co. is well-placed, despite US sanctions, to help build the continent’s 5G networks. Chinas also built the Addis Ababa - Djibouti railway which is 472 miles long and provided landlocked Ethiopia with a port on the Horn of Africa. Somaliland, an unrecognised breakaway region of Somalia, is home to the Berbera port, where a major … The road will compete with the Chinese-built Addis Ababa to Djibouti rail line. After Somalia’s presidential elections, which are planned for 8 February, talks between the Hargeisa and Mogadishu governments could continue on. In 2016, Somaliland signed a 30-year contract with United Arab Emirates-owned DP World, the world’s third-largest port operator, to manage and expand the port at Berbera. The joint-venture Berbera deal is between Somaliland (30%), DP World (51%) and Ethiopia (19%). EPA/NABIL MOUNZER, Medical personnel and students hold up the three finger salute below a row of portraits of people who died from security forces gun fire during a demonstration against the military coup in Yangon on March 5, 2021. Last year, with more than $1 billion in debt to China, Sri Lanka handed over a port to companies owned by the Chinese government. Exporting worldwide. In its search for a second option after the Doraleh deal in Djibouti collapsed, DP World turned to Somaliland for its relative stability and the absence of rival countries such as Turkey, which is active in Somalia. Chinese loans and investment have funded infrastructure programs across the continent. Coal volumes at the Port of Newcastle currently represent 98.5 per cent of total port activity, so this facility is another good barometer to measure the impact of the trade spat. This includes [reducing traffic by] limiting the authorised tonnage. But Berbera also put an additional strain on relations with Somalia. Washington unveiled two programs, Prosper Africa and the International Development Finance Corporation, meant to check China’s influence. READ MORE The Red Sea: A magnet for outside powers vying for its control. Complete the form and download, for free, The Africa Report’s COVID-19 How Africa can navigate the pandemic. Wake up to the essential with the Editor's picks. Some are even more optimistic about Somaliland’s potential. Taiwan, which is itself looking for international recognition, has been enthusiastic to interact with Somaliland. It should, instead, exploit its unique strategic advantages. Djibouti, faithful to its balanced and outward-looking policy, has forged strong and lasting ties with friends and partners, such as China, the United States, France, Japan, Saudi Arabia, and Turkey, and others. The Future of Money Is Digital, But Is It Bitcoin? Predicting the Future of Prediction Markets, Attempts to Undermine Relationship Between KSA, US, Lebanon’s Bassil Eager to Take Part in Pope’s Reception in Baghdad, Iraq PM to Asharq Al-Awsat: We Are Destined to Rid Ourselves of Foreign Hegemony, US ‘Conditional Proposal’ to Assad and Netanyahu 2011: Abandon Iran in Exchange for Restoring Golan, Lebanon and the Arabs: Amending Relations Achieves Joint Interests, Traffic drives past posters welcoming Pope Francis in the Iraqi capital Baghdad, on March 4, 2021. The Addis Ababa-Djibouti railway built with Chinese assistance is one of many attempts to reduce the problem. Somaliland, an unrecognised breakaway region of Somalia, is home to the Berbera port, where a major expansion is expected to be inaugurated in March of 2021. PLA naval escort taskforce conducts in-port replenishment in Djibouti. Not least, China’s interest has allowed Guelleh to replicate the old Cold War trick of extracting competing payoffs from competing powers. By downloading this PDF you agree to subscribe to The Africa Report Daily newsletter, Somaliland plays up its geopolitical role, courting China and Taiwan, an oil pipeline connecting Addis Ababa to Assab in Eritrea, Trafigura investment in Somaliland is a win for Ethiopia, Ports, military bases and treaties: Who’s who in the Red Sea, The Red Sea: A magnet for outside powers vying for its control, Nigeria still likely to end foreigner access to OMO bill sales, More than $4bn a year in high-risk gold flows from DRC, Uganda, Rwanda, CAR and others, East Africa continues to prosper despite Covid-19. And even though the US military presence in Djibouti is valuable, it feels somewhat anachronistic: It is geared primarily toward the defining challenge of the last generation, terrorism, rather than the defining challenge of this one, great-power rivalry. The Export-Import Bank of China lent $1.5 billion for marquee projects such as modernizing port facilities and building a water pipeline and standard-gauge railway to Ethiopia. This doesn’t mean that Djibouti and other African countries are slipping irretrievably into China’s sphere. Though it projects to boost its capacity to 500,000 TEU per annum, “there is no dedicated entity involved in policy making for the ports,” according to the World Bank. Djibouti Air was the national carrier of Djibouti until 2002. That’s one lesson worth heeding in the competition over Djibouti and so many other frontline states today. (Photo by AHMAD AL-RUBAYE / AFP), Anti-government protesters burn tires to block a road during a protest against the power cuts, the high cost of living, the low purchasing power of the Lebanese pound, in Beirut, Lebanon, 04 March 2021. “It appears DP World has learned its lesson and has understood the importance of a win-win partnership” according to Dupuy. Register your email here to get opinion topics, Copyright: 1978 - 2020 © H H Saudi Research and Marketing LTD, All Rights Reserved And subject to Terms of Use Agreement, Hal Brands is the Henry A. Kissinger Distinguished Professor at the Henry A. Kissinger Center for Global Affairs at Johns Hopkins University's School of Advanced International Studies and a senior fellow at the Center for Strategic and Budgetary Assessments. DON'T MISS : Talking Africa New Podcast – Biden says 'America is Back'. Just over three years into a 99-year lease of Darwin Port, the $506 million paid to the NT Government has been spent. Djibouti, a Vermont-sized country of 1 million people in the Horn of Africa, can hardly make that claim. DP World has had a rocky history in East Africa, having fallen out with the government of Djibouti, which cancelled the company’s Doraleh port concession in a high-profile investment dispute. Djibouti thus resolutely inscribes its action in the global arena while preserving its independence and sovereignty. As part of the so-called Digital Silk Road, Beijing is marketing advanced surveillance technology and “safe cities” projects. Landlocked South Sudan could also turn to Berbera, which is closer than Djibouti. East African competition to provide port and logistics services for landlocked Ethiopia is heating up between Djibouti and Somaliland. Djibouti commands key strategic geography because it resides at the crossroads of three crucial regions. How to Respond to Russia’s SolarWinds Cyberattack, China's Global Power Tops the US? The US has often seemed sluggish in its response. Syrian Actor Bassem Yakhour’s Tour of Damascus Shows Extent of Currency Collapse, Battle for Yemen's Marib Reveals Iran’s Expansionist Plot in Region, Djibouti Is a Flashpoint in the US-China Cold War. The Chinese base in Djibouti, a facility that hosts 1,000-2,000 personnel and could eventually become a node for power projection in the Horn and surrounding areas, is thus part of a larger approach to winning influence there. China’s strategy can be characterized as a determined pursuit of political and social modernity that includes far-ranging efforts to expand China’s national power, perfect It doesn’t end there, though: The establishment of China’s first overseas base in Djibouti in 2017, after years of outsized participation in United Nations peacekeeping missions in Africa, shows that Beijing’s military power is following its economic and diplomatic influence. Djibouti’s port is the main transit point for imports to and exports from Ethiopia, but the government in Addis Ababa wants to diversify its options. Using Stances as a Weapon…to Retrieve the State! 'Legacy+', a double album released by Afrobeat king Femi Anikulapo Kuti and his oldest son, Made, is a rite of passage. Leaders of all stripes are scrambling to contain the fallout. ', PIF: Forging Partnerships Places Saudi Arabia at Forefront of Developing Promising Sectors, Emerging Industries, SDC CEO: We Seek Investing $800 Mln in Infrastructure Development, Iraqi FM to Asharq Al-Awsat: Current Tensions Demand Dialogue between Regional Countries, Iran Sets up ‘Recreational Complex’ South of Damascus to Consolidate its Influence. The denial by Nigerian central bank governor Godwin Emefiele that he is planning to end the access of foreigners to open market operation bills (OMOs) has left analysts unconvinced. Covering a total land area of 12,189 sq.km (4,706 sq mi), Vanuatu is a Melanesian archipelago comprising of a double chain of 13 principal (larger islands) and about 70 smaller islands located in the South Pacific Ocean as observed on the physical map of Vanuatu above. Berbera also faces its own challenges. Whereas the US presence in Africa has been heavily focused on counterterrorism since 9/11, China’s engagement (along with the rhetoric surrounding it) leads with economics in a region hungry for growth. By Loza Seleshie And it has quietly become a bellwether of great-power rivalry, because of where it sits and what it demonstrates about the ebb and flow of influence on a contested continent. Beijing has successfully used its economic influence to mobilize African support for Chinese leadership bids in international organizations, while African officials have bristled at public warnings about “debt trap diplomacy.” “We are mature enough to know exactly what we are doing for our country,” scoffed Djibouti’s finance minister. Perhaps one day African data will power China’s AI algorithms. Basic technical assistance can improve African governments’ abilities to negotiate effectively with Beijing and assess the risks of accepting Chinese money. New Measures Say No. Djibouti, a Vermont-sized country of 1 million people in the Horn of Africa, can hardly make that claim. Africans are still more likely to view the US as their preferred political and economic model. Maybe Politicians Should Have Employment Contracts, Four Numbers to Gauge China’s Climate Ambitions, Iraq’s Scattered Christians Ask 'Should I Stay or Go? Washington can also give priority to bringing high-quality, transparent investment to select sectors such as energy and services, perhaps in coordination with European democracies that share America’s basic strategic objectives. A division of Huawei is building an undersea fiber-optic cable that will carry data from Djibouti to Pakistan and beyond. Chinese money has fueled the Djiboutian government’s dream of using rapid development to make that country the “Singapore of Africa.” It also lubricates the patronage network that strongman President Ismail Omar Guelleh oversees. This contributes to congestion problems in the city of Djibouti […] it is assumed that Djibouti’s share of Ethiopian cargo will decline about 10 to 15 percentage points in total over five years, starting 2021.”, Get your free PDF: COVID-19. During the Cold War, anticommunism was the motive for what the US did in developing regions, but it wasn’t the right message in dealing with countries that didn’t see themselves as anyone’s pawns. “The UAE had a strategy of blocking the development of the Doraleh port. Despite announcing the creation of a Somaliland Port and Free Zone Authority, there are “decisions on its composition, as well as the relationship between the DP World Berbera board and the new port authority, are yet to be made,” according to academics Warsame M. Ahmed and Finn Stepputat. Revenue from Berbera could be a big boost to the economy. Djibouti’s port is the main transit point for imports to and exports from Ethiopia, but the government in Addis Ababa wants to diversify its options. In 2018, the Somali government tried to get the UN’s help to prevent a UAE military presence in Berbera and also rejected the port deal. The trajectory of Chinese involvement in Africa over the past two decades has been remarkable. The port of Djibouti container terminal, currently has a handling capacity of 350,000 ten-foot equivalent units (TEUs) per annum. For the first 10 months of 2020, a total of 132.4 million tonnes was recorded. Djibouti Airlines was a privately owned Djiboutian airline, the company ceased operations in 2009. Djibouti's strategic location makes the country prime for an increased military presence. READ MORE Somaliland plays up its geopolitical role, courting China and Taiwan. Cargo operations at the Port of Djibouti are the chief economic activity of Djibouti. How Africa can navigate the pandemic. “There’s enough going on in this region for Berbera to get used without causing Djibouti problems. It was a way to squash competition and favour its own terminals in the Red Sea, [along with those in Persion gulf] such as Port Khalid in Sharjah and Jebel Ali in Dubai,” Emmanuel Dupuy, president of the Institute for European Prospective and Security, tells The Africa Report. Get your free PDF by completing the following form. It can claim the unique distinction of being the only country to host both US and Chinese military bases. The city's port is … Posted on Thursday, 24 December 2020 15:14, updated on Friday, 25 December 2020 21:31. But what does that mean for Africa? There are commercial and diplomatic factors to the Berbera project. After 2020, an Era of Global Harmony — or a New Dark Age? Somaliland wants to join the Commonwealth, though the UK does not officially recognise Somaliland as a state. Djibouti is the financial hub to many entrepreneurial industries ranging from construction, retail, import and export, money transfer companies, and Internet cafés. Yet it is a hard sell to tell countries with swelling populations to forgo Chinese money, which is often employed to meet real development needs. China has, in recent times, stepped up its military presence in Africa, with ongoing plans to secure an even greater military presence in Djibouti specifically. Port Djibouti Ports & Free Zones Authority (DPFZA) Official website of the port authority. Why Has Moscow Now Chosen to Reveal Assad’s Plea to ‘Save’ him in 2013? Some states have a pivotal role in the US-China rivalry based on their size and economic weight. In 2019, a $400m road project to connect the Ethiopian border town of Togochale to Berbera was launched. Capacity, costs, ease of transport and other factors will influence the competitiveness of Berbera port. And it serves as a gateway not just to landlocked Ethiopia, a regional powerhouse, but also to a larger African continent where Beijing has been making big strategic moves. It shouldn’t overreact and try to match Chinese activism everywhere, something that probably isn’t possible and certainly isn’t wise. The Somaliland government hopes that Berbera will deal with 50% of Ethiopia’s trade traffic in the years to come. Now Djibouti, home to … (Photo by STR / AFP), A vendor prepares pineapples at a fruit stall in a market in Taipei, Taiwan, March 5, 2021. Currently, about 95% of Ethiopia’s trade goes through Djibouti. China’s National Strategy > The People’s Republic of China’s (PRC’s) strategy aims to achieve “the great rejuvenation of the Chinese nation” by 2049. The UAE also plans to strengthen its regional influence by building an oil pipeline connecting Addis Ababa to Assab in Eritrea. African minerals and energy resources power China’s economy. Our China operation deals mainly with exports and connects widely with other GAC offices throughout Asia-Pacific, the United States, the Middle East and Europe. Find your perfect car now! Affordable, high quality used cars from Japan. The US will need a strategy that is both purposeful and nuanced. Critics of repressive governments, in Djibouti and elsewhere, see Chinese involvement as buttressing corrupt regimes that trade near-term windfalls for longer-term dependencies. More broadly, the US should balance its negative message — about the long-term costs of dependence on China — with a more positive one that depicts Djibouti and the African continent as something more than an arena for rivalry. READ MORE Ports, military bases and treaties: Who’s who in the Red Sea. READ MORE Trafigura investment in Somaliland is a win for Ethiopia. GAC China is a wholly-owned GAC operation covering logistics and shipping services with fully bilingual managers to ensure clarity in all documentation and communications. It looks across the Bab el-Mandeb — a Red Sea strait that is a conduit for perhaps 20% of the world’s trade — at the Arabian Peninsula and the Middle East. Beijing leapt ahead of Washington as Africa’s top trade partner in 2009 and hasn’t looked back. A Chinese company controls a large minority stake in the country’s port authority. According to the World Bank: “97% of the volumes handled by the port of Djibouti either leave or arrive to the port via truck. To be a viable import-export option, Berbera will need infrastructure links. Concern about excessive borrowing from China is rising, even as Belt and Road financing dropped starkly during 2020, raising questions about whether the reality of that project will ultimately match the hype. A stronger US role in international Covid-19 vaccine distribution can prevent China from dominating in this area and reaping the resulting diplomatic leverage. Somaliland is trying to increase foreign investment through additional infrastructure projects such as the Berbera Free Trade Zone and international airport. For those keeping an eye on where might bounce back fastest post-Covid, East Africa might be a good place to start. The 37th fleet of the Chinese People's Liberation Army (PLA) Navy on Saturday left the port city of Sanya in south China's Hainan Province for the Gulf of Aden and waters off Somalia to escort civilian ships. Over 9000 cars stocked and more than 30 manufacturers! The UK, with Brexit approaching, is one of them. In 2018, national security adviser John Bolton accused Beijing of trapping African countries in neocolonial relationships of economic dependence; he warned that leaders who did not support Washington diplomatically should not expect much US aid. REUTERS/Ann Wang, India Is a Flashpoint in the China-US Cold War, US Needs to Deny, Not Dominate, China in the Indo-Pacific, China's Foreign Policy Weapons: Technology, Coercion, Corruption, US Can Fight Domestic Insurgents with Lessons Learned Abroad, Turning its Back on the World Won’t Help America Heal. ", US Needs a Strong Defense Against China’s Rare-Earth Weapon, Biden Should Ditch the Doha Deal with Taliban. Other projects in that city are the result of billion dollar investments in construction, mass transportation and urban development. For China, Africa is many things at once: a market and a source of raw materials, a prize in a global struggle for geo-economic influence, a source of diplomatic support in international forums, and the leading edge of a long-term effort to project military power far beyond East Asia. Somaliland’s current main sources of revenue are its agriculture and livestock exports ($211.7m in 2019)  as well as remittances from its diaspora, estimated at $1.6bn by the UN. His latest book is "American Grand Strategy in the Age of Trump. It marks the western end of the vast Indo-Pacific theater. Since then, relations have improved, and Djibouti’s President Ismail Omar Guelleh hosted talks between the two countries this year. Some states have a pivotal role in the US-China rivalry based on their size and economic weight. The port has released year-to-date figures for coal exports at the end of October 2020. Demand from Ethiopia will get so big, they’re going to need Port Sudan [in Sudan] and Kismayo [in Somalia] too,” said Ali Toubeh, a Djiboutian entrepreneur whose container company is based in Djibouti’s free trade zone. But Djibouti’s ports are congested, a problem largely due to the increase of trade with Ethiopia and logistical issues. China's presence in Djibouti is tied to strategic ports to ensure the security of Chinese assets. READ MORE Somaliland’s new Cold War diplomacy. The US and its European allies are still security partners of first resort for Djibouti and most other African countries, a status that brings influence disproportionate to the size of any military presence. But soon after the ink was dry, Guelleh cut a separate deal allowing the Chinese to build their own “logistical support facility.”. Other global powers are also taking an interest in Somaliland in a context of shifting regional dynamics.
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