Executive Summary

The Republic of Djibouti is a country of 23,000 square kilometers, located at the juncture of the Red Sea and the Gulf of Aden, divided into five districts: the District of Djibouti, the District of Dikhil, the District of Ali-Sabieh, the District of Tadjourah and the District of Obock. Since  independence from France in 1977, Djibouti has pursued a moderate foreign policy. Djibouti's population of approximately 600,000 is predominantly Muslim and mainly of Somali or Afar origin. The main languages are French and Somali, and little English is spoken. There is a small Arab population, mainly from Yemen, and a European community of approximately 10,000, primarily French.

Djibouti has no major laws or regulations that would discourage incoming foreign investment. Certain sectors, most notably public utilities, are state-owned. Conditions of the structural adjustment agreement recently signed by Djibouti and the International Monetary Fund stipulate increased privatization of government-owned utilities.