Introduction:
The French Territory of the Afars and the Issas became Djibouti in 1977. Hassan Gouled APTIDON installed an authoritarian one-party state and proceeded to serve as president until 1999. Unrest among the Afars minority during the 1990s led to a civil war that ended in 2001 following the conclusion of a peace accord between Afar rebels and the Issa-dominated government. In 1999, Djibouti's first multi-party presidential elections resulted in the election of Ismail Omar GUELLEH; he was re-elected to a second and final term in 2005. Djibouti occupies a strategic geographic location at the mouth of the Red Sea and serves as an important transshipment location for goods entering and leaving the east African highlands. The present leadership favors close ties to France, which maintains a significant military presence in the country, but is also developing stronger ties with the US. Djibouti hosts the only US military base in sub-Saharan Africa and is a front-line state in the global war on terrorism.

Location: Eastern Africa, bordering the Gulf of Aden and the Red Sea, between Eritrea and Somalia

Population: 486,530 (July 2006 est.)

Languages: French (official), Arabic (official), Somali, Afar

Country name: conventional long form: Republic of Djibouti
conventional short form: Djibouti
local long form: Republique de Djibouti/Jumhuriyat Jibuti
local short form: Djibouti/Jibuti
former: French Territory of the Afars and Issas, French Somaliland

Capital: name: Djibouti
geographic coordinates: 11 30 N, 43 15 E
time difference: UTC+3 (8 hours ahead of Washington, DC during Standard Time)

Economy - overview:
The economy is based on service activities connected with the country's strategic location and status as a free trade zone in northeast Africa. Two-thirds of the inhabitants live in the capital city; the remainder are mostly nomadic herders. Scanty rainfall limits crop production to fruits and vegetables, and most food must be imported. Djibouti provides services as both a transit port for the region and an international transshipment and refueling center. Djibouti has few natural resources and little industry. The nation is, therefore, heavily dependent on foreign assistance to help support its balance of payments and to finance development projects. An unemployment rate of at least 50% continues to be a major problem. While inflation is not a concern, due to the fixed tie of the Djiboutian franc to the US dollar, the artificially high value of the Djiboutian franc adversely affects Djibouti's balance of payments. Per capita consumption dropped an estimated 35% over the last seven years because of recession, civil war, and a high population growth rate (including immigrants and refugees). Faced with a multitude of economic difficulties, the government has fallen in arrears on long-term external debt and has been struggling to meet the stipulations of foreign aid donors.