The tiny African state of Djibouti is increasingly touted as the unsung hero of America’s ongoing war against terror and piracy. Despite a recent closure, brief but worrying, of the American embassy there, the country is considered a rare oasis of stability, and is superbly positioned in the Horn of Africa right next to Yemen. Camp Lemonnier has become secure ground for American special forces, fighter planes, helicopters – and critically, it serves as the major base for Washington’s drone operations in Yemen and Somalia. This is why Washington recently renewed its lease for 10 years, with an option for another 10, even though the Djiboutian government more than doubled the rent.
The more than $70 million per year including economic aid that the United States sends to Djibouti is money well spent. America needs Djibouti, and their government knows it. The French, Germans, and Japanese have also handed over tens of millions for use of the prime strategic real estate. Now, however, China has got in on the act. And if money talks and shapes policy – as it tends to do in small and underdeveloped countries run by authoritarian governments – then it could be Beijing’s voice and not Washington’s which will be heard the loudest by Djiboutian President Ismail Guelleh.
Beijing’s great interest in the African continent is enduring. China-Africa trade exceeded $200 billion in 2014, far exceeding commerce between the United States or the European Union and that continent. China has long demonstrated immense interest in building ground-level influence in places Beijing considers strategic choke points. Beijing has sealed economic, political, and military deals with Nigeria, Zimbabwe, Algeria, and Ethiopia. In early 2014, China signed a security and defense strategic partnership with Djibouti. Concluding the deal was Chinese Gen. Chang Wanquan – the country’s defense minister and the man who guides China’s increasingly assertive policies and behavior in the South China Sea.
The protests issued by the Obama administration against the China-Djibouti deal went to no avail. And it’s no wonder, if one considers the economic package offered by the Chinese. China Merchant Holdings, a huge state-owned-enterprise, purchased a large stake in the main Djibouti Port in 2014. Guelleh’s enthusiasm for that deal was enhanced by Beijing’s offer of a $400 million contract to state-owned China State Construction Engineering Corp. to further develop the port’s facilities.
China is reading from a well-worn playbook: Beijing offers attractive commercial incentives to develop key port facilities with the hope of future strategic and military access. Just think about similar port plays in Myanmar, Sri Lanka, Bangladesh, and Pakistan – even if these have not always borne strategic benefits for China. Beijing understands that beyond its ability to offer military and logistical facilities to foreign governments at a hefty price, Djibouti’s only other valued economic asset is its ports. Promise a fortune to develop its ports and the infrastructure that they feed – such as a railway from Djibouti to Ethiopia, and two international airports – and you are helping fund and execute the country’s only national business plan.
Beijing learned another lesson during its successful checkbook diplomacy days, when it won over corrupt, authoritarian governments overseeing moribund economies in the South Pacific: Using economic seduction to achieve strategic and political goals requires a mix of national and personal incentives. More than just largesse to develop the country’s infrastructure, China actually built a palace for the country’s leader. Djiboutian government figures are treated like leaders of global significance. Just as Beijing did to awestruck Pacific Island leaders in the previous decade, grand gestures designed to flatter individual egos can go a long way when these individuals have a disproportionate and unaccountable hold over the reins of power and wealth in a country.
Pacific Island nations eventually realised that Beijing only ever offers its bounties for an expected and narrow gain, and will eventually ask much in return. Economic partners throughout Asia such as Myanmar, and in Africa such as Nigeria and Sudan, have also learned the hard way that the benefits of Chinese-led economic activity in their countries tend not to trickle down to the local population, while there is often little Chinese regard for the environmental and social destruction left behind. But for the moment, all Djibouti sees are renminbi signs.
Meanwhile, America is not without leverage – the importance of Djibouti is painfully obvious to Washington. Countries want more than to be forced into becoming a Chinese client state – something the Obama administration should forcefully point out in talks with the Guelleh government. And America has the advantage of numbers. It needs to coordinate its demands with France, Germany, and Japan, and be prepared to collectively take money off the table in ongoing negotiations for access, or alternatively add more to the pile.