The visit of IMF on February 22-29 /2004 resulted government the Gov of Dj to cave-in, and accept an informal agreement with IMF, on this unprecedented move, the IMF had infringed sovereignty of Gov of Dj as functioning state that can be capable of managing it economy.
The IMF approved a three-year US$26.5 million loan for the Gov of Dj under the Enhanced Structural Adjustment Facility (ESAF) program in October 1999 to assist Gov of Dj’s three-year Poverty Reduction and Growth Facility (PRGF) program. The ESAF was scheduled to end October 2002, but, by request of the Gov of Dj was extended until January 2003. Despite this extension, Gov of Dj did not complete all the reforms required by the IMF. The IMF has now returned to begin a new partnership, called a Staff Monitored Program (SMP), The SMP, which does not involve any financing, is an informal agreement between Gov of Dj and the IMF staff to monitor the implementation of the Gov of Dj’s economic program. The secondary purpose of the IMF visit was to finalize GODJ’s Poverty Reduction Strategy Paper; it was facilitated by the US Gov. as a gesture of support for its little convenient dictator Piggy.
The visiting IMF team had held a meeting with the donors from the international community present in Djibouti without the presence of host government (djibouti) to inform the findings of the recent evaluation. The participants included two visiting IMF representatives, the resident IMF representative and representatives from the French Cooperation, Russian Embassy, the European Union, Saudi Arabia, the World Bank, Japan, UNDP, UNHCR, UNICEF, WFP and the U.S. Embassy.
According to the IMF, the SMP will last one year (2004) and will mainly monitor the completion of the reforms required by the IMF in the first ESAF. There will also be some additional measures, such as the Code of Commerce and the publication of the “Chambre des Comptes” 2002 report. The SMP will start after the signing of the Memorandum of Economic and Financial Policies (MEFP), which reportedly should be done immediately. The MEFP contains a detailed list of reforms to be completed and requires regular progress reporting on a quarterly or bi-yearly basis. The SMP is supposedly to restore Gov of Dj credibility with the fed-up donors.
The IMF also slapped the face of Gov of Dj concerning the Program of Public Investment (PIP), which also concerns all the major public projects; infrastructure, education, health, etc. The IMF indicated that 80 percent of the fund should come from the international community which no longer trust Gov of Dj. The PIP will not be feasible without the assistance of the donors.
The IMF staff indicated that Gov of Dj has shown a change in attitude and is now more receptive to the IMF recommendations. The IMF delegation added that Gov of Dj has been realizing that they have to show transparency in order to gain the international community’s confidence. But the representatives from the French Cooperation and the European Union did not seem convinced of Gov of Dj’s new behaviour. If the SMP is successfully completed, the IMF and Gov of Dj will negotiate the terms of a new ESAF.
With strong domestic opposition to foreign intervention in the region, Jordan took a neutral stand in the 1990–91 Gulf war and refused to openly support US-led attacks against Iraq. This led to a complete halting of aid ﬂows to Jordan from the United States and its Arab allies in the Gulf and the temporary suspension of the IMF and World Bank agreements with two-thirds of the IMF Standby funds not being drawn. Squeezed financially, isolated internationally, and ostracized regionally the US-led pressure had the desired eﬀect of prompting an alliance shift.
Learning from the misfortune of the above mentioned middle eastern dictators, Piggy realized early on, if he needs to survive politically as absolute ruler of Djibouti, he has not only to co-operate the US Gov in any issue unconditionally, but also he has to infringe the sovereignty of nation such as allowing the US Gov to use Djibouti as launching-pad for attack on the neighbouring countries, giving up the right to sue any US citizen even if his own daughters become a rape victim of the US military service-men , and the list goes on.