In 1992, a new constitution came into force that, while maintaining the French-style presidential system of the old constitution of 1977, provided for a multi-party system. This brought an end to the exclusive rule (since 1981) of the unity party, the Rassemblement Populaire pour le Progres (RPP). Executive power rests with the directly elected president for six years, who is head of state and commander-in-chief of the army. Legislative power resides in the 65-member parliament, the Chambre des Députés, which is elected every five years in direct district elections. Djibouti is administratively divided into four districts (cercles).
The relations between Afar and Issa play an important role in national politics. The president's close personal ties with the small group of politicians who have ruled Djibouti since before independence are also important. The three main opposition parties are the Parti de Renouveau Démocratique (PRD), the Parti National Démocratique (PND) and the FRUD, the former Afar guerrilla group. Opponents of the government are divided. Mohamed Djame Elabe's PRD, which resigned from the cabinet in January 1991, was the only opposition party in the 1992 parliamentary elections. The PRD did not win a single seat, although it obtained 28% of the vote. In the 1993 presidential election, the opposing candidates were Elabe of the PRD and Awale of the PND. Aptidon was elected, despite allegations of electoral fraud. In 1997, both the PRD and PND were embroiled in an internal struggle for leadership. The faction of the FRUD that signed the peace agreement with the government formed a political party and formed an alliance with the ruling RPP in April 1997. The faction that continued armed resistance, led by Mr. Dini, reached a peace agreement with the government in 2001.
In the presidential election of 9 April 1999, Ismael Omar Guelleh was elected as Aptidon's successor with 74 % of the votes. In 2002, the constitution was changed again with the removal of a law stating that no more than four parties could participate in the elections, with the result that on 10 January 2003, eight parties participated in the parliamentary elections. The parties were grouped into two blocs; the presidential bloc UMP (including RPP, PND, PPSD and FRUD), and the opposition bloc UAD (Union pour uni Alternance Dé mocratique, led by Mr. Dini). The UAD won 37% of the votes, but did not obtain the majority (needed for seats) in any of the districts. The result was full occupation of the parliamentary seats by the UMP. Dini died in 2004.
During the presidential elections on 8 April 2005, Guelleh was re-elected for six years in elections without a candidate. After the elections, there were rumours of the formation of new rebel groups and fears of a breach of the ceasefire.
Local and regional elections were held on 10 and 31 March 2006 respectively and were won by an overwhelming majority by the RPP, the main party in the UMP coalition. President Guelleh and his UMP government now effectively hold all power, from the national to the local level, for the next five years. The FRUD did not do well during the elections and, immediately after the results, informally joined the opposition in claiming fraud during the elections. FRUD's rebellion against the UMP may lead to divisions in the government and possibly renewed tensions between Issa and Afar. The UAD boycotted the elections because, according to the UAD, the political reforms introduced by President Guelleh have not been implemented. During the elections, restrictions were placed on the freedom of movement of independent (foreign) observers. Meanwhile, some clashes have been reported between Afar insurgents and the Djiboutian army.
The current political situation is described in the history section.
Djibouti has a free market economy and, with a GDP of $3,600 (2017) per capita, it is among the somewhat poorer countries in the world. Approximately 23% of the population lives below the poverty line. Unemployment is around 40%. The economy relies mainly on the purchasing power of Europeans residing in the country and on the German, French and American military bases stationed in Djibouti. Other important income comes from Ethiopia, which uses the Djibouti port for its import and export industry. Therefore, relations between Djibouti and Ethiopia are expected to develop further. Ethiopia has indicated that it is interested in infrastructural development in Djibouti. Nevertheless, Ethiopia wants to reduce its dependence on Djibouti by seeking connections with other important ports in, for example, Sudan, Somaliland and Kenya.
Due to the natural state of the country, cultivation of dates and vegetables is only possible on a limited scale. Of some importance is the livestock farming (cattle, sheep, goats and camels), mainly practised by nomads. The drought in the Horn of Africa also hits Djibouti hard. Much of the livestock has died because of the drought and this can cause major problems in the medium term, because people have simply lost their source of income.
There is some fishing along the coast. Salt is mined for local exchange. Djibouti's soil is thought to contain gypsum, mica, amethyst and sulphur, but there is no mining yet. Industry is underdeveloped and contributes less than 20% to GNP. Almost all foodstuffs and consumables have to be imported. The same applies to oil, which is necessary for energy supply. The increase in oil prices over the past year has therefore been a major cost item for Djibouti. A further rise in oil prices, combined with increased economic growth due to port development and agreed trade agreements, combined with still high government expenditure, may lead to inflation. Exports, which include the sale of processed hides, are negligible. The government wants to further develop the tourism sector.
The main trading partners are Horn countries, Yemen, Saudi Arabia, China and France. Recently, new trade agreements have also been signed with Iran and Qatar. The Independent Petroleum Group from Kuwait will be laying an oil pipeline between Djibouti and Addis Ababa in the near future. Dubai Ports International will be in charge of Djibouti's port and international airport policy for the next 20 years. The same company will develop a deep-water port in Doraleh. Trade with Somalia and Ethiopia has grown considerably, especially in recent years. However, the trade balance remains negative.
The main donors are the EU, France and the United States. In 1996 the government and the IMF signed an agreement for the first time. The IMF is not satisfied with Djibouti's progress in the structural solution of the poverty problem. However, the IMF has also indicated that drought-related balance of payments problems will not be included in the assessment. There is a railway connecting Djibouti to Addis Ababa; the capital has an international airport. Less than 10% of the roads are asphalted.
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