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Tackling COVID in 19 Djibouti

Staff Reporter
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Tackling COVID in 19 Djibouti

The government of Djibouti closed its land, air and sea borders on March 18, 2020 following the rapid spread of the corona virus in Africa. Djibouti is one of the first to close its boarders and announce general lockdown except for some essential administrative and port related services sanctioned by the government.
Djibouti Ambassador to Ethiopia Mohamed Idriss Farah talked to Capital about the situation in Djibouti and what his government is doing to tackle the pandemic as well as what strategies are put in place to ensure the smooth transfer of goods between the two countries in this uncertain times. Excerpts;

Capital: How is Djibouti coping with COVID 19 pandemic? What are the challenges and the response from your government?
Amb. Mohamed Idriss Farah: The government of Djibouti quickly made an important decision to close its land, air and sea borders on March 18, 2020 followed by general containment of the population in order to fight this pandemic. Our strategy also consists in carrying out a nationwide screening of the population in order to quickly detect those infected by COVID 19 and immediately take care of them to avoid loss of human life. This is the reason why several thousand Djiboutians and foreigners living in Djibouti are screened and will continue to be screened in the days and weeks to come.

Capital: Your country is repatriating Ethiopian migrants back, what are the reasons and why at this time?
Mohamed Idriss: The Ethiopian migrants living in Djibouti are migrants who came wanting to go to Yemen, and because of the closure of the maritime borders of the Arab countries they are stranded in Djibouti. They wish to return home to Ethiopia, and this issue of voluntary return of Ethiopians is directly managed by the International Organization for Migration (IOM) and they are therefore awaiting repatriation in complete agreement with the Ethiopian authorities.
Indeed, despite the closure of land and sea borders, migrants have never stopped coming to Djibouti in the hope of reaching the other side of the Red Sea. Some of them want to return to Ethiopia and others want to stay in Djibouti.

Capital: How is the Port of Djibouti operating in these difficult times?
Mohamed Idriss: The activities of the ports of Djibouti operate normally and practically at the same rate as before the pandemic. The number of trucks entering and leaving our ports is the same as before the crisis. This demonstrates the total commitment of Djiboutian ports actors, in the remarkable work done despite the risks associated with COVID 19, to ensure that Ethiopia does not have any repercussions on its import both in terms of oil as well as any goods dispatched to this friendly country.

Capital: What are the preparations undertaken at the port of Djibouti to prevent the pandemics?
Mohamed Idriss: The Djibouti Ports and Free Zones Authority (DPFZA) has implemented a number of health protections to operate normally, that is the implementation of the measures recommended by the World Health Organization (WHO) so as to limit as much as possible the risk of COVID 19 spreading.
Furthermore, the activities of the ports and free zones of Djibouti were not impacted by the general lock down adopted by the government, in particular to ensure that Ethiopia is not to be affected in any way by our quest to protect our population from COVID 19.

Capital: Your country recently reported the first corona virus death and the number of positive tests soars rapidly. What is the worst case scenario that will inflict on your economy.
Mohamed Idriss: The impact on the Djiboutian economy will be real just as the whole world’s economy. This health crisis will unfortunately be followed by an unprecedented financial and economic crisis for the world economy but especially for the economies of developing countries, and in particular the African continent.

Capital: Recently there were reports that Djibouti banned a food cargo bound to Ethiopia. What really happened?
Mohamed Idriss: It is completely false to claim that Djibouti has stopped the supply of food to Ethiopia. This information is slanderous and unacceptable for our country because it is disseminated in social networks by malicious people. There has never been any question in Djibouti of blocking any goods belonging to and going to Ethiopia.
I also emphasize that despite the general lockdown of the population and the interruption of all commercial and economic activity, the President of the Republic Ismael Omar Guelleh has given clear instructions to the government that port activities and trans-shipment of goods are in no way affected, in particular to ensure that Ethiopia’s supplies are delivered on time. Over 1,200 Ethiopian truckers cross our borders every day to gain access to the various ports of Djibouti to supply Ethiopia despite this severe pandemic of the corona virus. This demonstrates, if need be, the total commitment of the Djiboutian authorities to satisfy the Ethiopian market.
In addition, a joint committee co-chaired by the Ethiopian Deputy Minister of Transport and the President of Djibouti Ports and Free Zones Authority is set up within the framework of COVID 19 to ensure that there is no supply delivery interruption on the one hand, but also to limit the risk of the pandemic spreading.
Meanwhile, the Djiboutian authorities have asked local importers to plan a strategic three months stock of essential products. This does not affect Ethiopia’s supplies but rather concerns the local Djiboutian market because of the risk of economic slowdown which could impact the Djiboutian national market.
This decision by the government to provide for a strategic stock of basic necessities does not affect Ethiopian importers. Consequently, there is nothing strange in the decision of the government of Djibouti to sanction the establishment of a three months strategic stock in these uncertain times with the supply of essential products by Djiboutian importers to think of their compatriots.
To this end, the Ministry of Foreign Affairs and International Cooperation in Djibouti has made an official statement in order to clarify the situation and reassure the citizens of our two countries.

Capital: Any final comment?
Mohamed Idriss: I would like to take this opportunity to acknowledge the role played by the Ethiopian Embassy in Djibouti in collaboration with the Ministry of Foreign Affairs to clarify these false statements circulating on social networks.
The multidimensional relations between our two countries remain excellent, based on mutual respect that can even be considered as an example in terms of economic integration in Africa.

Suspend emerging and developing economies’ debt payments

admin
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Leaders of the world’s largest economies must recognize that a return to “normal” in our globalized world is not possible so long as the pandemic continues its grim march. It is myopic for creditors, official and private, to expect debt repayments from countries where those resources would have to be diverted from combating COVID-19.

By Carmen M. Reinhart and Kenneth Rogoff

As the COVID-19 virus spreads globally, economic paralysis and unemployment follow in its wake. But the economic fallout of the pandemic in most emerging and developing economies is likely to be far worse than anything we have seen in China, Europe, or the United States. This is no time to expect them to meet their debt payments, either to private or official creditors.
With inadequate health-care systems, limited capacity to deliver fiscal or monetary stimulus, and underdeveloped (or nonexistent) social-safety nets, the emerging and developing world is on the cusp not only of a humanitarian crisis, but also of the most serious financial crisis since at least the 1930s. Capital has been stampeding out of most of these economies over the past few weeks, and a wave of new sovereign defaults appears inevitable.
We have been consistently arguing the urgent need for a temporary moratorium on all debt repayment by any but the most creditworthy developing or emerging sovereign debtors. The case for a moratorium for distressed sovereign borrowers has many similarities to that for households, small businesses, and municipalities.
Underscoring the urgency is the reality that the quarantine experience is starkly different in the developing world. In the vast slums of São Paulo, Mumbai, or Manila, quarantining can mean living in one small room with ten people, with little food or water and scant or no compensation for lost wages. If history is any guide, the supply disruptions that accompany the pandemic may soon be followed by food shortages.
More than 90 countries have already sought emergency funding from the International Monetary Fund’s Rapid Financing Instrument (RFI) and World Bank resources. And in much of the developing world, the worst of the pandemic is not expected until later this year.
When that happens, the direct humanitarian and economic impact will come on top of the pandemic’s effects on global trade and commodity prices, which are already battering many emerging economies. The World Trade Organization expects global trade to decline by 13-32% in 2020. Oil-producing countries (and many more primary commodity producers) have been suffering the consequences of the price war between Saudi Arabia and Russia, sparking downgrades in sovereign credit ratings.
Leaders of the world’s largest economies must recognize that a return to “normal” in our globalized world is not possible so long as the pandemic continues its grim march. It is myopic for creditors, official and private, to expect debt repayments from countries where those resources would have to be diverted from the fight against COVID-19.
Deepening and prolonging the global depression is a very risky proposition. At a low point in the mid-1980s, emerging and developing economies accounted for about 18% of global GDP (in US dollars); in 2020, that share is 41% (and 60% if adjusted for purchasing power).
We recommend an immediate temporary moratorium on external debt repayments for all but “AAA”-rated sovereigns. By “external,” we mean debts issued under the jurisdiction of foreign courts, typically in New York or London. Debts issued under domestic law would be dealt with by countries themselves. For this kind of debt relief to be effective, it must be encompassing, including debts owed to the multilateral lenders, such as the International Monetary Fund and the World Bank, sovereign creditors (Paris Club members and China), and private investors.
Ultimately, the debt of many countries will need to be restructured; there will be no alternative to a negotiated partial default. But courts and multilateral lenders are no better able to handle debt default en masse than hospitals can handle operating at ten times capacity. A temporary moratorium may provide the necessary bridge. In the best-case scenario, it might even prevent some defaults.
The World Bank and the IMF have vast experience with countries in debt distress, and in recent years have increasingly recognized that partial default is often the only realistic option, a point we stressed in much of our earlier work on external debt. It is a great tragedy that, following the 2008 global financial crisis, the eurozone failed to find a way to restructure Southern Europe’s debts beyond the Greek case – a course of action we strongly advocated at the time. Trying to enforce regular debt payments in highly irregular times can only lead to deeper and more protracted recessions than need to happen.
Of course, a debt moratorium will require the US, which wields effective veto power at the IMF, to get on board. But so, too, must China.
In the past two decades, more and more developing countries turned to China for loans (which are typically collateralized and carry market interest rates). Although China is now a major creditor in about 40 countries and an important one in scores more, it has so far refused to join the Paris Club (which coordinates rescheduling of sovereign debts) and insists on pursuing its own bilateral closed-door approach.
What can be done? The IMF and the World Bank have the capacity and expertise to coordinate a debt moratorium if the US and other major players conclude that a such a move is in their national interest. Private creditors will have relatively little choice but to cooperate in the short run. Many emerging and developing economies will soon stop paying their debts, anyway. The world needs to get in front of the problem.

Carmen M. Reinhart is Professor of the International Financial System at Harvard University’s John F. Kennedy School of Government.
Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. He is co-author of This Time is Different: Eight Centuries of Financial Folly and author of The Curse of Cash.

Defying orders

Anteneh Aklilu
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Defying orders

Defying orders

Horrific accident

Anteneh Aklilu
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Horrific accident
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