Djibouti - Economic situation and prospects

Report No. 4692-DJI Economic Situation and Prospects of Djibouti October 19, 1984 Country Programs Department -astern Africa Region FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS 1 French franc = Year 1 US$ = Djibouti francs Djibouti francs 1/ 1978 177.721 40.01 1979 177.721 42.44 1980 177.721 42.83 1981 177.721 33.53 1982 177.721 27.57 1/ Annual average of buying rates recorded on Tuesdays. FISCAL YEAR January 1 to December 31 WEIGHTS AND MEASURES (Metric System) 1 kilometer (km) = 0.62 miles 1 square kilometer (km ) = 0.3861 square miles I hectare (ha) = 2.47 acres 1 metric ton (t) = 1,000 kilograms I kilogram (kg) = 2,205 lbs.  FOR OFFICIAL USE ONLY Preface This report is based on the findings of a mission which visited Djibouti from May 29 to June 21, 1983. The mission was composed of the following members: Mr. Christian Merat (consultant), mission leader; Mrs. Pisei Eap, balance of payments and external debt; Mr. Wahid Hadjeri, investment program; Mr. Jean-Paul Milot (consultant), public finances; Mr. Reng Rakotobg (consultant, UNECA), national accounts. In addition, the report relies, on the data and proposals contained in the document the Government presented at the Donors' conference on November 1983, and material assembled by several other recent World Bank missions on the urban development project, use of geothermal energy, education and transportation. The report, in draft form, was discussed with representatives of the Government of the Republic of Djibouti in October 1983. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   DJIBOUTI ECONOMIC SITUATION AND PROSPECTS TABLE OF CONTENTS Page Country Data Summary and Conclusions i - vi I. INTRODUCTION 1 A Strategically Important Location 1 Extremely Limited Natural Resources 2 Human Resources So Far Untapped 3 Narrowly Circumscribed Comparative Advantages 4 II. ECONOMIC DEVELOPMENTS 1978-82 5 Preliminary Remarks 5 Growth and Its Determinants 6 Savings and the Effectiveness of Investment 7 Employment and Income 8 Balance of Payments 9 Official External Assistance 12 Public Finances 13 Public Enterprises 15 Social Welfare Institutions 16 Money and Credit 16 Economic Situation in 1983 28 T11. OVERALL POLICIES AND OVERALL PROSPECTS 20 Development Goals and Strategy 20 An Attempt to Quantify the Prospects for 1984-88 21 Strengthening of the Public Savings Capacity 23 Mobilization of Private Savings 26 Policy on Prices and Competition 27 Mobilization of External Savings and of the Absorptive Capacity of the Economy 28 IV. SECTOR POLICIES AND PROSPECTS 30 Statistics on Investment 30 Efficiency, Employment and Poverty in the 1984-88 Program 32 Water Supply Development Policy 34 Agriculture, Stockraising and Fishery 34 Energy, Mining and Exploration 35 Industrial and Tourism Development 37 Transportation and Communications 38 Training of Young People and Adults 40 Population and Health 44 Urban Development 44 Reception of Refugees 46  LIST OF TABLES IN THE TEXT 1. Major Macroeconomic Magnitudes and Trends between 1978 and 1982 2. Resource Balance 3. Major Categories of Imports 4. External Assistance STATISTICAL TABLES ANNEXES Annex 1: Explanatory Note on the Forecasts for 1983 and 1984-88 Annex 2: Note on Finances of the State, Social Welfare Institutions and Public Enterprises  T A B L E 3A PAGE 1 DJIBOUTI - SOCIAL INDICATORS DATA SHEET DJIBOUTI REFERENCE GROUPS (WEIGHTED AVERAGES) /a MOST (MOST RECENT ESTIMATE) /b /b /b RECENT/b MIDDLE INCOME MIDDLE INCOME 1960- 1970. ESTIHATE_ AFRICA S. OF SAHARA N. AFRICA & MID EAST AREA (THOUSAND SQ. KM) TOTAL 22.0 22.0 22.0 AGRICULTURAL 2.5 2.5 2.5 GNP PER CAPITA (US$) .. .. .. 1112.9 1149.6 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF OIL EQUIVALENT) 7506.0 4690.0 1619.0 529.0 622.1 POPULATION AND VITAL STATISTICS POPULATION,MID-YEAR (THOUSANDS) 126.0 160.0 330.0 URBAN POPULATION (X OF TOTAL) 49.6 62.0 66.0 29.7 48.2 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILL) 0.6 STATIONARY POPULATION (MILL) POPULATION MOMENTUM POPULATION DENSITY PER SQ. KM. 5.7 7.3 14.5 55.8 36.3 PER SQ. KM. AGRI. LAND 51.4 65.3 130.6 111.5 461.7 POPULATION AGE STRUCTURE (T) 0-14 YRS .. .. 34.0 45.4 43.6 15-64 YRS .. .. 65.0 51.7 53.1 65 AND ABOVE .. .. 1.0 2.9 3.3 POPULATION GROWTH RATE (X) TOTAL 2.0 2.4 6.0 /c 2.8 2.8 URBAN .. 4.7 6.8 5.2 4.5 CRUDE BIRTH RATE (PER THOUS) .. .. 49.2 47.0 40.4 CRUDE DEATH RATE (PER THOUS) .. .. 18.3 15.2 11.5 GROSS REPRODUCTION RATE .. .. 3.2 3.2 2.8 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUS) USERS (X OF MARRIED WOMEN) .. .. .. .. 22.2 FOOD AND NUTRITION INDEX OF FOOD PROD. PER CAPITA (1969-71=100) .. .. .. 91.6 97.3 PER CAPITA SUPPLY OF CALORIES (% OF REQUIREMENTS) .. .. .. 98.2 110.8 PROTEINS (GRAMS PER DAY) .. .. .. 56.7 70.1 OF WHICH ANIMAL AND PULSE .. .. .. 17.0 17.8 CHILD (AGES 1-4) DEATH RATE 23.0 16.0 10.0 18.7 14.6 HEALTH LIFE EXPECT. AT BIRTH (YEARS) .. .. 50.0 51.7 57.5 INFANT MORT. RATE (PER THOUS) 69.1 32.6 30.0 /d,e 102.7 101.5 ACCESS TO SAFE WATER (%POP) TOTAL .. .. 43.0 /d,f 35.6 59.7 URBAN .. .. 53.0 /d,f 54.1 84.5 RURAL .. .. 20.0 /d,f 27.3 38.4 ACCESS TO EXCRETA DISPOSAL (% OF POPULATION) TOTAL .. .. URBAN .. .. RURAL .. .. POPULATION PER PHYSICIAN 9690.0 3640.0 1960.0 11948.3 4345.1 POP. PER NURSING PERSON .. 600.0 550.0 /g 2248.9 1831.1 POP. PER HOSPITAL BED TOTAL 190.0 170.0 240.0 /g 986.9 632.9 URBAN .. .. 180.0 /g 368.7 545.5 RURAL .. .. 420.0 7j 4012.1 2513.5 ADMISSIONS PER HOSPITAL BED .. 16.5 /h 13.7 /8 *- 26.2 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. 7.0 /e URBAN .. .. RURAL .. .. AVERAGE NO. OF PERSONS/ROOM TOTAL .. .. .. URBAN .. .. .. RURAL .. .. .. ACCESS TO ELECT. (X OF DWELLINGS) TOTAL .. .. .. .. 46.2 URBAN .. .. .. .. 77.7 RURAL .. .. .. .. 16.1  T A B L E 3A PAGE 2 DJIBOUTI - SOCIAL INDICATORS DATA SHEET DJIBOUTI REFERENCE GROUPS (WEIGHTED AVERAGES) /a MOST (MOST RECENT ESTIMATE) /b RECENT MIDDLE INCOME MIDDLE INCOME 1960/b 1970DL ESTIMATfLb AFRICA S. OF SAHARA N. AFRICA & MID EAST EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL ., ., 32.0 91.0 88.3 MALE .. .. .. 90.5 102.5 FEMALE . .. .. 73.6 73.6 SECONDARY: TOTAL .. .. 8.0 17.4 43.0 HALE ,. ., ,, 23.7 52.3 FEMALE .. .. .. 14.8 33.0 VOCATIONAL (b OF SECONDARY) 37.9 44.0 25.3 5.3 10.3 PUPIL-TEACHER RATIO PRIMARY 36.0 36.0 44.0 38.6 30.3 SECONDARY 13.0 12.0 19.0 24.3 23.1 ADULT LITERACY RATE (I) .. .. 10.0 35.6 43.5 CONSUMPTION PASSENGER CARS/bHOUSAND POP .. 48.7 45.8 20.7 17.8 RADIO RECEIVERS/THOUSAND POP .. 43.8 54.8 100.8 138.8 TV RECEIVERS/THOUSAND POP .. 6.3 16.1 18.5 46.1 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION .. ,. .. 17.2 31.2 CINEMA ANNUJAL ATTENDANCE/CAPITA .. .. 2.3 /i 0.3 1.7 LABOR FORCE TOTAL LABOR FORCE (THOUS) .. .. 79.2 FEMALE (PERCENT) .. .. .. 33.8 10.8 AGRICULTURE (PERCENT) .. .. 1.7 57.1 42.4 INDUSTRY (PERCENT) .. .. 20.6 17.4 27.9 PARTICIPATION RATE (PERCENT) TOTAL ,. ., 24.0 36.3 26.2 MALE .. .. .. 47.6 46.4 FEMALE .. ., .. 25.1 5.8 ECONOMIC DEPENDENCY RATIO .. .. 1.5 1.4 1.8 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOMtE RECEIVED BY HIGHEST 5% oP HOUSEROLDS .. HIGHEST 20% OF HOUSEHOLDS .. LOWEST 20% OF HOUSEHOLDS .. LOWEST 40% OF HOUSEHOLDS .. POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. 525.3 274.8 RURAL .. ., .. 249.0 177.2 ESTIMATED RELATIVE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. .. 477.4 402.6 RURAL ,. .. .. 186.0 284.9 ESTIMATED POP. BELOW ABSOLUTE POVERTY INCOME LEVEL (%) URBAN ,. RURAL ,. NOT AVAILABLE NOT APPLICABLE N 0 T E S /a The group averages for each indicator sre population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, "Data for 1960' refer to any year between 1959 and 1961; "Data for 1970" between 1969 and 1971; and data for "Most Recent Estimate" between 19B0 and 1982. Ic This high rate reflects steady immigration from neighboring countries; Id UNICEF data; /e 1978; If 1976; IR 1977; /h 1972; /f 1975, JUNE, 1984  OgEIETIOUS OF SOCIAL IOSICAIt5R ate..: hicb.heai sh. date ar draw fI .c. .n a geogIS tily jadgcd nine -et aeltrnate u ti.tehi, tt h-Iad alto in. octd that thinn ay not halteonceet nooerht hanaMsa of the .. iof at.atasdtrd.d doftinittat an concepts aa by dtffarett -ntlie in toilclte-tineCh date I. Tinedatare nothtiLate, ceotni to daoribe ardor. tt asgottade indicat troo., c.d tnrteieeretei.L jr 1 fJ roca int-.tononi Thin raaroo grop. a- (IICh nine *0 7 ooEC-,gaapo nth. tainitt ocatry wed (2) a iootoy genp etch eoeoin t iign -nrag into. than trw ne -ygra of the enhiect -cntly ....aPt ro 't hii moo- Ott ropoenat gtep char. 'ltlddlo I000 Norh ifnioc and Middle teat' is ctoIac inewa- of etn-e eoi-ulnaa 94th Itincoand 17) Ictiac fl1 t0ooioie.n -ltonatanict dlided hr noseinn of Itdctitln - CIetL tfo -pc cogtlIn Isod ones aaa Hinla .atera; 1900, 7'ii0ia(f ii(i"To a ciclshol -ialCarsy ma-i. anT .d 1991 data. Pocalatlo yar oanePna - i'ctalthir dinidad by oneine otfcoicn haiittd- E.lnate at agticltata stan sednenan lyantesCently n _can 1cei aneInIt nI.... ......n.n naraeo, yn-ci-1o -aeood Ian onP,o yaa_tee, ate coIct yncaa tii. fntiio; 1960 -CatsLog adltl. 1070 nod 1941 data. Ponatein eiaCyaltad - ia.aia.tcia ?,P."'ttic," oll GNP flO CAPTA (US$) - GNF yet oeyta sleceo IC.nCi- arc prikec. cot tini LIn tabi c end p,io... gtnnladnc ledielc n lOhO 190, nd 992 ata byan eaetOOepW-slaan. .anbliin.ot98rodingpniclpa CyaI"_ C a ecaant iniacd Lna hiepitel., Inoatn,inoad heelcin.1t andC1 ENERtYlco COtUfIi PEt CPITA - taat .. aotcaaeta a onoalodnIoen o pone-netlo tttoef byIapyiin(inst bc a _dioI. pnteary enry-aladigia etti,nt-te ga and hydra, nooloI acntn,cya idcife, .rc.) niho le in- anL en acasdeca n an geotincreel *lcnotlinh ata f o1 q.ninaltt pt caLne 1960 .rcia . .lete tga of a.di-aItatinco 1970, eed