The 2016-2017 Global MBA Class

The 2016-2017 Global MBA Class

Wednesday, September 4, 2013

Introducing Djibouti


By Michael L’Heureux, Global MBA student 2012-2013, Canada

In the crux of the Horn of Africa, blazingly hot yet colourfully exotic, Djibouti is a place most people haven't heard of – nevermind visited – but if you're living in Europe, a lot of the things around you probably have passed through here. Djibouti the most important shipping port in the Red Sea before the Suez Canal and a key stopover point for goods shipped from Asia to Europe. Its a tiny oasis of stability in a rough neighbourhood: next door to Somalia, Yemen, Eritrea and Ethiopia. Sadly, despite this, it also suffers from some of the highest levels of poverty and unemployment in the world.

My International Immersion Project (IIP), a required part of my studies in the Global MBA, brought me here for the summer. The mission: a consulting project to reform the Economic Development Fund of Djibouti to better help the country encourage small businesses, create jobs and diversify the economy.

The Global MBA administration places students in IIP's matching their previous background, interests and career goals and languages. So with my exposure to the Middle East & Africa and my proficiency in Djibouti's two official languages (French and Arabic), this posting was a good fit.

The project brought us to meet with leaders in the national government, the private sector and NGO's involved in development, learning about their different activities, policies, mandates and priorities to trying to find an effective way for the Development Fund to complement them.

As a former French colony, Djibouti inherited a strong tradition of public sector employment. Young people have generally headed directly to a secure, well-paid job as a bureaucrat directly after they graduated. After 30 years of this, though, the state can't keep hiring. Unemployment stands at over 50%, even higher among young people. The public sector keeps wages high, so it’s hard for the private sector to compete. At the same time, undocumented foreign workers stream into the country to do jobs cheaper than Djiboutians. Markets are flooded with low-cost imports from Asia and neighbouring Ethiopia benefits from significantly cheaper domestic labour, energy and raw materials, made even more competitive by a falling currency, making it hard for Djiboutian business to compete. Added to this is a whole range of typical developing-country problems: poor-quality infrastructure, generally low skill levels, illiteracy, health issues...

It’s a tough puzzle to solve and any solution we come up with will have to take all of these challenges and specificities into account.

Stepping off the plane in Djibouti after a long overnight flight through Ethiopia, I was struck by the intense 40˚+ heat and humidity. As we drove past French colonial buildings, the call of the mid-day prayer sounded across markets full of Somali watermelons and Ethiopian spices. It certainly felt far from home.

This project will be a big challenge, but I look forward to it and am really glad I have the chance to come here and hopefully make a difference.






 

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