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Evaluating the "Dubai Model": The Case of Djibouti (Executive Summary)

Published on: June 2010​
Genre: Dubai Model​ Category: Research Report/ Research Paper/ White Paper​

Since 2000, the Emirate of Dubai has cultivated a relationship with the African country of Djibouti that is unusual in both its scope and depth. Indeed, Dubai’s investments in this "micro-state" at the foot of the Red Sea touch almost every sector of the economy, from transport and shipping to construction and tourism. In all, Dubai-based entities have been responsible for channeling more than $1.5 billion in foreign investment into Djibouti’s ports, free zone and hospitality sectors since 2000.

To many, what Dubai and its Djiboutian partners have accomplished represents a blueprint for public-private partnerships in Africa, and compares highly favorably to direct aid and other investment approaches currently being implemented on the continent. Coming in the midst of the greatest global economic crisis since the Great Depression, such experiments underscore the extent to which Dubai’s value proposition—and its legacy—are tied to activity beyond the Emirates.

The monograph begins by examining the context for, and origins of, Dubai’s partnership with Djibouti. What led the UAE and Dubai to Djibouti in the first place? Was there something about Dubai’s own development trajectory that made an alliance with Djibouti especially logical or attractive? How planned and coordinated were the investments made by Dubai- and UAE-based entities? This section gives a historical overview of the Djiboutian economy, as well as the regional context for port-led development.

The second part of the monograph looks carefully at how Dubai’s involvement since 2000 has impacted the Djiboutian economy, beginning with macro indicators, and moving on to such areas as employment and training, regional security, etc. Also examined are ways in which Dubai-based entities and their suppliers have aligned their social responsibility projects to local development needs.

In the final section, the paper examines Djibouti as a model for foreign investment in Africa, and as a key marker for Dubai’s own sustainability. At a time when aspects of Dubai’s growth strategy have been called into question, where do Djibouti and the rest of Dubai’s African initiatives fit, and what will Dubai need to do to consolidate and expand upon these opportunities? Does Djibouti represent a "happy accident," or a successful application of a Dubai-grown strategy to an international environment? What does this model look like, exactly, and what aspects serve to distinguish it from approaches taken by other countries active in the region, notably China and France?

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