- Up to 100,000 foreign migrants were expelled from Djibouti in September last year, representing more than 10 percent of the total population. The first assessment of the economic consequences in Djibouti shows mixed results. Employment opportunities for poor Djiboutians have increased, salaries have increased and trade is reduced.
The recent decision to expel foreign migrants has had "a number of economic effects, some positive, some negative," according to a recent assessment of the economic situation in the country's capital, Djibouti Ville, by the US agency Famine Early Warning Systems (FEWS).
In a rushed decision, Djiboutian authorities in July 2003 told all foreign migrants - enjoying the slightly higher living standards here compared to neighbour countries - to register and leave Djibouti.
In September, between 70,000 and 100,000 foreign migrants were expelled to Ethiopia, Eritrea and Somalia. Population estimates are in the range of 600,000 to 700,000 for the country as a whole, meaning that Djibouti's total population was reduced by more than 10 percent late last year, inevitably affecting the national economy.
In Djibouti Ville, where most foreign migrants had staid until September last year, the population - before the expulsions - was set at between roughly 400,000 and 550,000. Subtracting the number of people expelled, suggests that the population of the city might now be in the range 350,000 to 450,000, representing a 20 percent population loss.
According to the FEWS study, it is still too early to say what will be the effects of the expulsion of foreign migrants in the long term, "but the sudden removal of up to 100,000 people is bound to have had marked effects in the short term." The situation was now stabilising, "as poorer Djiboutians move to fill at least some of the 'gaps' created by the expulsions," the study found.
The net effect of the expulsions varies by wealth group in the Djiboutian capital. The overall effect on the 'very poor' and 'poor' is probably not all that great, since any loss of petty trading income has in general been offset by an increase in the earnings from casual labour, the study found.
However, those households termed 'upper middle' - usually running small restaurants and minibuses - "have probably been most affected by the migrant expulsions," FEWS concludes. Cheap labour has disappeared and a 10 to 20 percent loss in potential customers has occurred. Small restaurants and street food vendors in Djibouti Ville had reported a 20 to 30 percent reduction in income during the last months.
The 'middle' and 'better-off' wealth groups in Djibouti Ville are also complaining about a substantial loss of rental income. As most foreign migrants were renting a house or a room, much of the city's rental capacity was built on the foreigners. Many 'middle' households are now struggling with economic losses as rental houses are empty.
On the other hand, there is now less competition for low paid jobs and casual labour, which has increased the opportunities for 'very poor' and 'poor' Djiboutians, but there has also been a reduction in demand for the goods and services purchased by foreign migrants and therefore a loss of petty trading income and income for some businesses.
Payment rates for low-paid employment and casual labour reportedly have increased in the month since the expulsions. Wage rates for domestic workers are reported to have increased from between Djiboutian franc 6-8,000 per month before the expulsions to franc 10-12,000 per month now. And the rate for watchmen has increased from franc 15,000 per month previously to franc 25,000 per month now, the report says.
Djibouti, already prior to the expulsion, was a relatively high-cost country, when compared to Ethiopia and Somalia. Both wages and trade items - including basic staple food - were known to be between 20 and 50 percent higher in Djibouti Ville than in the closely located capital of Somaliland, Hargeisa. The expulsions seem to increase the cost levels in Djibouti even more.
In the longer term, however, the FEWS study concludes that the present retraction in trade and unbalanced labour market will be reverted. "As some of the jobs performed by migrants are taken on by Djiboutians, demand for the goods provided by petty traders should in general increase once again," the report concludes.
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