DJIBOUTI Will Djibouti Become Latest Country to Fall Into China’s Debt Trap?

SirLancelLord

Reformation of Somaliland
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es more than 2,500 miles from Sri Lanka but the East African country faces a predicament similar to what its peer across the sea confronted last year: It has borrowed more money from China than it can pay back.

In both countries, the money went to infrastructure projects under the aegis of China’s Belt and Road Initiative. Sri Lanka racked up more than $8 billion worth of debt to Chinese sovereign-backed banks at interest rates as high as 7 percent, reaching a level too high to service. With nearly all its revenue going toward debt repayment, last year Sri Lanka resorted to signing over a 70 percent stake and a 99-year lease to the new Chinese-built port at Hambantota.

Djibouti is projected to take on public debt worth around 88 percent of the country’s overall $1.72 billion GDP, with China owning the lion’s share of it, according to a reportpublished in March by the Center for Global Development.

It, too, may face the possibility of handing over some key assets to China.

As Chinese President Xi Jinping continues to push lending to developing countries, policy analysts are sounding alarm bells about the fate of smaller nations biting off more than they can chew—and the strategic possibilities opening to China as a result.

Xi’s Belt and Road Initiative, which aims to revive and expand the ancient Silk Road trade routes on land and at sea, has become the crown jewel of his foreign policy since 2013, shortly after coming to power. Government officials regularly talk up the initiative and state media outlets give it broad coverage.

But many of the projects have stalled in the early stages of planning, and the dollar amount attached is left vague.

More importantly, the countries involved are often seduced by the appeal of large infrastructure projects that are financially destabilizing. Eight of the 68 countries involved in the Belt and Road Initiative currently face unsustainable debt levels, including Pakistan and the Maldives, according the Center for Global Development’s report.

Its vulnerability notwithstanding, Djibouti has been keen to work with Beijing. It partnered with China Merchants Ports Holdings Company, or CMPort—the same state-owned corporation that gained control of the Hambantota port in Sri Lanka—to build the Doraleh Multipurpose Port. That project was completed in May 2017.

Earlier this month, Djiboutian President Ismail Omar Guelleh described the new Djibouti International Free Trade Zone, a $3.5-billion venture with China, as a “hope for thousands of young jobseekers.”

But the most noteworthy development in Djibouti—and the most worrying for the United States—is China’s first overseas military base, which is located 6 miles from the U.S. military’s only permanent base in Africa. From Camp Lemonnier, where about 4,000 U.S. troops are stationed, the United States coordinates operations in “areas of active hostilities” in Somalia and Yemen.

In the past year, U.S. diplomats and generals have grown increasingly concerned that the base will provide China a foothold at the Bab el-Mandeb Strait, a strategic chokepoint in international maritime trade. About 4 percentof the global oil supply passes through this waterway connecting the Gulf of Aden with the Red Sea each year.

Gen. Thomas Waldhauser, who commands the U.S. Africa Command, said in a testimonybefore the House Armed Services Committee in March that the United States was “carefully monitoring Chinese encroachment and emergent military presence” in Djibouti. Local relations between the two great-power rivals have become especially strained in 2018, with each lodging grievances against the other.

China, for its part, maintains that the naval facility will serve as a logistics hub for its anti-piracy, humanitarian, and emergency evacuation missions. The live-ammunition drills conducted at the base should be interpreted as “legitimate and reasonable” exercises for counterterrorism operations, a commentator told the state-owned Global Times.

But satellite images of the People’s Liberation Army base may reveal its true purpose. A retired Indian Army intelligence officer notedlast September that the 200-acre facility includes at least 10 barracks, an ammunition depot, and a heliport. Four layers of protective fences surround the perimeter; the two inner fences are eight to 10 meters tall and studded with guard posts. The purported logistical support base is rather a fortress that may accommodate thousands of soldiers. More than 2,500 Chinese peacekeeping personnel are already stationed in countries such as South Sudan, Liberia, and Mali.

“There is nowhere else in the world where the U.S. military is essentially co-located in close proximity to a country it considers a strategic competitor,” said Kate Almquist Knopf, the director of the Defense Department’s Africa Center for Strategic Studies.

“This is not something the Pentagon is used to,” she said.

One concern is that the Djibouti government, facing mounting debt and increasing dependence on extracting rents, would be pressured to hand over control of Camp Lemonnier to China.

In a letter to National Security Advisor John Bolton in May, Sen. James Inhofe (R-Okla.) and Sen. Martin Heinrich (D-N.M.), two members of the Senate Armed Service Committee, wrote that President Guelleh seems willing to “sell his country to the highest bidder,” undermining U.S. military interests.

“Djibouti’s now identified as one of those countries that are at high risk of debt distress. So, that should be sending off all sorts of alarm bells for Djiboutians as well as for the countries that really rely on Djibouti, such as the United States,” said Joshua Meservey, a senior policy analyst at the Heritage Foundation.

“Policymakers are becoming more and more aware of this. The challenge is that there isn’t a strong sense of how to effectively push back or compete with China on some of these issues.”

Meservey says there are simple steps the United States could take to start balancing out China’s expanding influence, including institutionalizing the U.S.-Africa Leaders Summit—a one-off event in 2014 hosted by President Barack Obama. The U.S. government should also incentivize private sector investment in Africa, he said, thus creating competition with Chinese state-backed dollars on the continent.

Other analysts believe China’s debt-driven expansion could backfire on Beijing. Jonathan Hillman, a fellow at the Center for Strategic and International Studies, said one “underappreciated dimension” of China’s predatory lending projects in Africa was the uncertainty that Beijing takes on by doling out trillions of dollars abroad.

“If these projects do not go well, there is a financial and reputational risk to China,” Hillman said.

“The port in Sri Lanka gets a lot of attention, but not too far from the port is an airport that now no plane flies into. That’s not a good advertisement for Chinese soft power or China’s strength or reliability as a partner.”
 

4head

The one and only 4head
VIP
Djibouti is colonised again..This fat c*nt named Ismail Omar Gueleh is killing the country.
 
es more than 2,500 miles from Sri Lanka but the East African country faces a predicament similar to what its peer across the sea confronted last year: It has borrowed more money from China than it can pay back.

In both countries, the money went to infrastructure projects under the aegis of China’s Belt and Road Initiative. Sri Lanka racked up more than $8 billion worth of debt to Chinese sovereign-backed banks at interest rates as high as 7 percent, reaching a level too high to service. With nearly all its revenue going toward debt repayment, last year Sri Lanka resorted to signing over a 70 percent stake and a 99-year lease to the new Chinese-built port at Hambantota.

Djibouti is projected to take on public debt worth around 88 percent of the country’s overall $1.72 billion GDP, with China owning the lion’s share of it, according to a reportpublished in March by the Center for Global Development.

It, too, may face the possibility of handing over some key assets to China.

As Chinese President Xi Jinping continues to push lending to developing countries, policy analysts are sounding alarm bells about the fate of smaller nations biting off more than they can chew—and the strategic possibilities opening to China as a result.

Xi’s Belt and Road Initiative, which aims to revive and expand the ancient Silk Road trade routes on land and at sea, has become the crown jewel of his foreign policy since 2013, shortly after coming to power. Government officials regularly talk up the initiative and state media outlets give it broad coverage.

But many of the projects have stalled in the early stages of planning, and the dollar amount attached is left vague.

More importantly, the countries involved are often seduced by the appeal of large infrastructure projects that are financially destabilizing. Eight of the 68 countries involved in the Belt and Road Initiative currently face unsustainable debt levels, including Pakistan and the Maldives, according the Center for Global Development’s report.

Its vulnerability notwithstanding, Djibouti has been keen to work with Beijing. It partnered with China Merchants Ports Holdings Company, or CMPort—the same state-owned corporation that gained control of the Hambantota port in Sri Lanka—to build the Doraleh Multipurpose Port. That project was completed in May 2017.

Earlier this month, Djiboutian President Ismail Omar Guelleh described the new Djibouti International Free Trade Zone, a $3.5-billion venture with China, as a “hope for thousands of young jobseekers.”

But the most noteworthy development in Djibouti—and the most worrying for the United States—is China’s first overseas military base, which is located 6 miles from the U.S. military’s only permanent base in Africa. From Camp Lemonnier, where about 4,000 U.S. troops are stationed, the United States coordinates operations in “areas of active hostilities” in Somalia and Yemen.

In the past year, U.S. diplomats and generals have grown increasingly concerned that the base will provide China a foothold at the Bab el-Mandeb Strait, a strategic chokepoint in international maritime trade. About 4 percentof the global oil supply passes through this waterway connecting the Gulf of Aden with the Red Sea each year.

Gen. Thomas Waldhauser, who commands the U.S. Africa Command, said in a testimonybefore the House Armed Services Committee in March that the United States was “carefully monitoring Chinese encroachment and emergent military presence” in Djibouti. Local relations between the two great-power rivals have become especially strained in 2018, with each lodging grievances against the other.

China, for its part, maintains that the naval facility will serve as a logistics hub for its anti-piracy, humanitarian, and emergency evacuation missions. The live-ammunition drills conducted at the base should be interpreted as “legitimate and reasonable” exercises for counterterrorism operations, a commentator told the state-owned Global Times.

But satellite images of the People’s Liberation Army base may reveal its true purpose. A retired Indian Army intelligence officer notedlast September that the 200-acre facility includes at least 10 barracks, an ammunition depot, and a heliport. Four layers of protective fences surround the perimeter; the two inner fences are eight to 10 meters tall and studded with guard posts. The purported logistical support base is rather a fortress that may accommodate thousands of soldiers. More than 2,500 Chinese peacekeeping personnel are already stationed in countries such as South Sudan, Liberia, and Mali.

“There is nowhere else in the world where the U.S. military is essentially co-located in close proximity to a country it considers a strategic competitor,” said Kate Almquist Knopf, the director of the Defense Department’s Africa Center for Strategic Studies.

“This is not something the Pentagon is used to,” she said.

One concern is that the Djibouti government, facing mounting debt and increasing dependence on extracting rents, would be pressured to hand over control of Camp Lemonnier to China.

In a letter to National Security Advisor John Bolton in May, Sen. James Inhofe (R-Okla.) and Sen. Martin Heinrich (D-N.M.), two members of the Senate Armed Service Committee, wrote that President Guelleh seems willing to “sell his country to the highest bidder,” undermining U.S. military interests.

“Djibouti’s now identified as one of those countries that are at high risk of debt distress. So, that should be sending off all sorts of alarm bells for Djiboutians as well as for the countries that really rely on Djibouti, such as the United States,” said Joshua Meservey, a senior policy analyst at the Heritage Foundation.

“Policymakers are becoming more and more aware of this. The challenge is that there isn’t a strong sense of how to effectively push back or compete with China on some of these issues.”

Meservey says there are simple steps the United States could take to start balancing out China’s expanding influence, including institutionalizing the U.S.-Africa Leaders Summit—a one-off event in 2014 hosted by President Barack Obama. The U.S. government should also incentivize private sector investment in Africa, he said, thus creating competition with Chinese state-backed dollars on the continent.

Other analysts believe China’s debt-driven expansion could backfire on Beijing. Jonathan Hillman, a fellow at the Center for Strategic and International Studies, said one “underappreciated dimension” of China’s predatory lending projects in Africa was the uncertainty that Beijing takes on by doling out trillions of dollars abroad.

“If these projects do not go well, there is a financial and reputational risk to China,” Hillman said.

“The port in Sri Lanka gets a lot of attention, but not too far from the port is an airport that now no plane flies into. That’s not a good advertisement for Chinese soft power or China’s strength or reliability as a partner.”
What are your thoughts on it. This is coming from an American standpoint protecting its interests. I would welcome the Russians and Chinese before the Usa.
 
Isn't Djibouti actually doing very well in terms of business in Africa? Kenya, Ethiopia, and Dijbouti are becoming increasingly business-savy in the rapidly developing African economy and leaving us Somalis in the dirt :mjcry:
 


Djibouti about to get fucked over heavy. The national security Advisor of the United States basically saying they will not let Africa fall to Russia and China. Say what you want about the West post colonialism but at least they don’t use predatory practices like seizing national assets. Zambia and Djibouti are in mass debt to China and China is going to come and collect


Interesting times for somaliland honestly. We already had Russians visit Somaliland and somaliland officials visit Moscow. I think America might end up offering to put a base in Zeila just so the Russians don’t. They already have their UAE allies in Berbera
 
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SirLancelLord

Reformation of Somaliland
VIP
Our sland brothers are cuqdad ridden. U ducee

Nope not, but over the years it's been Djiboutis policy to hinder developments in Somalilland as you guys want to capitalise on being the only stable state in the region.

And Somalilland still seeks partnership out of kinship.

DJIBOUTIS HELICOPTERS have been known to enter into Sonalilland and fire indiscriminately at livestock in Zeila. Province & the navy on a number of occasions have attacked SL coastguard
 
Nope not, but over the years it's been Djiboutis policy to hinder developments in Somalilland as you guys want to capitalise on being the only stable state in the region.

And Somalilland still seeks partnership out of kinship.

DJIBOUTIS HELICOPTERS have been known to enter into Sonalilland and fire indiscriminately at livestock in Zeila. Province & the navy on a number of occasions have attacked SL coastguard

Zeila is our ppl, why would we do that? Those were american jets and it was an accident. Hinder sland development how? By not giving you ictiraaf?

You're the one who makes a bogus thread after I share good news. Accept that you have cuqdad
 
Isn't Djibouti actually doing very well in terms of business in Africa? Kenya, Ethiopia, and Dijbouti are becoming increasingly business-savy in the rapidly developing African economy and leaving us Somalis in the dirt :mjcry:
It hurts me deeply man :mjcry:
 
Djibouti have a tiny population, one-clan (Cisse, not including Afars) and military bases from the richest countries in the world. And they're still poor. If anything shows the incompetence of Somali leaders, it's not Xamar, it's Djibouti.
 

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