The Republic of Djibouti is a speck of a country with most of the population residing in and around Djibouti City. Note the country name and capital names lack of imagination, which is a cursory indicator to the country itself. You can read the history of Djibouti on the internet. It is very boring. No country existed until the Europeans showed up and put borders up to identify Somalia, Ethiopia, and Djibouti. Before that it was just a place that normal people avoided. It has only 2 redeeming features found in its deep sea port and industrial salt. It has been referred to as the gate of hell for good reason.
The best overall assessment comes directly from the US Ambassador to Djibouti, Ambassador Geeta Pasi, and I quote her, "The only thing good in Djibouti is the watermelon, and that isn't even grown here."
Environment
It is hot, hot, and more hot, add to that days of humidity and it is even more hot. Nothing grows here, except down around the city.
The soil is salty and of very low quality.
There are no endangered plant or animal species in the area. I did find ducks at a artificial wetland created by the US Military's sanitary water discharge. When I reported to the military that there were ducks, which no ducks have ever been seen in Djibouti, in the wetland, the seabees immediately destroyed the area. What ducks? What wetland? :-) I still got the photos :-)
Regarding plants, I wouldn't expect any unknown cures to be found in these badlands.
The drinking water is of very low quality, and is being contaminated with salt, with help of both the city and US Military Base (Camp Lemonier) pumping out water from the primary aquifer faster than it can naturally recharge. This allows for infusion of sea water which is pushing its way inland to fill the void created by the two users. Actually, the US military water pumps impact the aquifer more due to its proximate location next to the ocean. The US military doesn't really care about its impact to the aquifer, because they use very high tech reverse osmosis water filtration, while the locals have none. There is biological water quality issues regarding this water as well. So for most people not native to the area, this water is off limits. Which is good from an economic stand point for the water bottlers in the area. Avoid Zam Zam as a drinking water source. It is known locally as water that will cause people to get sick, but without many choices the poor public takes its chances with Zam Zam.
Sanitary system is near non-existent. All sewer flows out a discharge point raw into the ocean in town. Recently the Ministry of Sanitation made some improvements to the discharge point by putting up a wall so no one sees it, out of sight out of mind. I have never seen any ocean water quality testing so I can't comment on the impact this sewer is having to fish or even swimmers. For myself, I don't eat any fish in Djibouti.
Air quality is moderate to sub-par. By driving out of the city up to a location called Arta, up on a high hill top, you can see down on Djibouti. From this vantage point you can see how bad the air quality is around the city...nasty.
Waste management is a oxymoron phrase when used in regards to Djibouti. The EU is once again trying to help the Djiboutian manage their municipal waste by installing a modern landfill. Only problem is that Djibouti ain't got enough working dump trucks to pick up all the waste. In the poorer sections of town the waste is still tossed on the ground for the goats to eat, natural recycling.
There is zero in country capacity for handling of any hazardous waste. If you need to address this topic, just cry and hide your head in the ground like a Djiboutian. There is actually some expertise in this area, but no equipment or seriously trained and organized staff. There was a petroleum spill at the port which no one knew how to address, so the oil simply washed up on land. Now there is a multi-million dollar lawsuit against the oil company. Both the Port of Doraleh (DP World) and Port of Djibouti have no real response plan in the event of a spill. The answer from both is that the Port Authority will take care of it.....head in the sand.
Side note regarding spills. You want to clean up a site in record time? Have a spill in Djibouti and see it cleaned in the time it takes to wire transfer $XXX,XXX.00 to an Swiss bank account. A Russian transport provides a good example. This 'un-named' ship dropped two 55 gallon drums of oil into the waters of the port. They were recovered with most of the contents. But the Minister in charge of the port, named not included but he is the current Ambassador to China, had a study conducted that showed that the port waters were significantly damaged. During this investigation the ship was held in port. The ship's owner flew down from his Russian enclave and met with the Minister. Direct discussion took place, and $500,000 wired was the cost to get a clean bill of health---just like that.
Environmental Risk Conclusion
Huge financial risk associated with any manufacturing activity that has the potential of contamination on land or water.
Business
The ability to establish a business is straight forward and easy. Business law is the same as you are familiar with in the EU or USA.
The process of setting up a business is made complicated by the number of hands that are stuck into your pocket, especially for western businesses. These hands include national government, as well as in-country agents. The biggest hand in the pocket comes from the President and his wife Kadra Mahamoud Haid.
He is a chart that outlines the business ties that will help the user determine where their investment is best spent:
The US Embassy in Djibouti provides US businesses with no support. They will hand you a pamphlet with contact information for setting up your business in Djibouti.
Although there are reports that private land ownership is liberal. This is not quite true. It is based on the government's or the Minister of Land and Budget's mood or one of his friend's mood. Documents can appear and disappear, and names can be changed. You can have a land document that looks official along with being sealed by the right people, but that doesn't guarantee nothing. Just assume that as long as your business is doing good you are okay.
There are now 10 local banks in a country of 850,000 people, and a economy of no more than $2 billion USD, with just a smattering of economic activity. It is incredibly difficult to get a loan, and if you can circumvent the red tape that money will cost you on the low end 9% up. But beware there aresome banks on the US watch list, that could get you caught up with terrorist. Don't ask the US Embassy which bank to trust, they will only send you to a web site for you to figure out yourself. The reason for so many banks, money laundering. I actually overheard Russians speaking with a lawyer on money laundering at a restaurant.
The labor laws are a nightmare. No business will want to deal with hiring anyone directly. Which is the purpose of the mess. You need to use one of the local labor brokers. So you know how that works, for every $1 you pay the worker gets $.25 if he/she is lucky, and then they have to pay taxes on the full $1. There is the other part of the labor story in Djibouti, most Djiboutians are heavy drug addicts; from the President down to the ditch digger they all MUST have their khat ( http://www.esquire.com/features/travel/ESQ0906KHAT_182 ). There are some that utilize sociably as one would drink a beer after work, and fewer still who don't touch the stuff. But for someone considering establishing a business in Djibouti, and using the local labor market for skilled reliable labor.....be real. It would be far less frustrating to just ask for 10 names, pay them $1000 per month and don't expect them to ever show up. If they do show up, don't expect much work.
As a westerner everything you purchase will be jacked up in price by at least 50%, but don't be surprised to see 100%. Everyone, French/Djiboutian businesses, will do their best to convince you that is normal prices. It is Djibouti, sorry.
Key Point: There are 'tribes' here. If you have a supporter from one tribe, that doesn't mean you can get things done. The other tribes may have people in the positions that you need to have something accomplished, and if they don't support you, well you get the picture.
Terrorism was not a issue prior to June 2014, but now it is of high concern for western companies and personnel.
Risk is associated with application of the law. It is based on what a local wants it to be. You as a business owner have no legal protections, even as a corporation or limited liability corporation. Criminal law will be applied before commercial, so you or your general manager can end up in jail.
In the likely event that you are picked up by the police you should know that Djibouti has a constitution and laws. They provide the same rights you as a westerner are familiar with no matter what anyone might want to tell you.
You have the right to a lawyer, if you can't afford one the court will assign one. You don't have to speak to the police without a lawyer present. If you don't speak French, the police have to provide a translator. Never ever ever ever sign anything the police hand you, no matter what they say. The police can only hold you for 48 hours without charges. Your embassy must be contacted within 24 hours.
The embassy consulate's job is very specific but important as quoted by Consulate Byron Hartman, "to ensure that the host country laws are applied equally and fairly to you".
The embassy won't bail you out, or give legal advice. But if your human rights are being violated in anyway, such as no lawyer, they are obligated to protest (officially). There is no such thing as 'Bail', but they are not going to hold you for more than 48 hours, unless someone high up really doesn't like you. No matter what is told to you, unless the US Embassy agrees, never ever give up your passport; by the way it is against US law for the US Embassy to agree.
Business Risk Conclusion
The law is applied arbitrarily. Your investment is in high risk. Plan on at least 30% of your capital to go towards government personal pockets. If your company is too successful, plan on it getting taken away.
No comments:
Post a Comment