Djibouti feels effect of Dubai investment mix

* username: rupertbu

There is no obvious connection at first glance between the grubby, low-rise streets of Djibouti City, capital of the east African state of Djibouti, and the spectacular modern high-rise landscape of Dubai.

However, a brief examination of most of the prominent businesses in the tiny state reveals its heavy dependence on investment from the once-rich, now-struggling emirate in its port, logistics and tourism sectors.

The country is the most fully developed example of a strategy pursued by Dubai World, Dubai’s government-controlled investment vehicle, to boost trade in a series of developing countries and capture some benefits for Dubai’s businesses. Dubai World’s port operator, DP World, operates Djibouti’s ports and airports. Jebel Ali Free Zone Authority (Jafza) runs a free-trade zone near a new container port. Dubai World’s customs operation runs Djibouti customs and Nakheel, its property arm, has built a luxury hotel.