Djibouti, a small but strategically significant country located at the southern entrance of the Red Sea, has been drawing attention over its support for Hamas, Hezbollah, the Houthis, and other Iranian-backed actors. Given its strategic location as a key shipping route, Djibouti’s alleged involvement with these actors has helped exacerbate security concerns on the Red Sea, thereby disrupting supply chains and intensifying regional instability.

A Critical Gateway Under Suspicion

As one of the world’s busiest shipping lanes connecting the Red Sea to the Indian Ocean and serving as a gateway to the Suez Canal, Djibouti is vital for global maritime. Available data suggests that about 10% of global trade passes through its waters, or at least used to pass through before security threats worsened. Currently, trade via the Red Sea has declined to a historic low (56%), an unfortunate development for Djibouti’s economy which depends mainly on port activities. The irony of this is that the country is partly responsible for this decline, no thanks to its “unholy alliance” with Iran and its proxies.

Before now, Djibouti’s strategic trade location and geopolitical importance made it a hub for military bases, including those operated by the United States and European Union forces. But despite hosting Western military forces, Djibouti allegedly formed covert alliances with Iranian-backed actors whose intent is to destabilise peace on the Red Sea. This has raised concerns over Djibouti’s commitment to regional stability.

The Disturbing Allegations of Djibouti’s Connivance with Iranian Proxies

One of the disturbing allegations made against Djibouti is the role it plays in helping “Hezbollah to carry out illegal activities such as money laundering, terrorism financing, drug trafficking, and weapon smuggling.” The country’s government allegedly does this for Hezbollah using front companies to bypass trade sanctions. This means that Iran and its proxies can continue to generate revenue to fund their activities, much to the detriment of global trade.

But that’s not all, as the country has also been accused of conniving with the Iranian Islamic Revolutionary Guard Corps to smuggle weapons and illegal oil. There are also allegations that Djibouti cooperates with the Houthis to facilitate attacks on cargo ships by arranging supplies needed by the group.

As you may know, the Houthis have been targeting commercial vessels in the Red Sea since Israel’s war on Hamas following the October 7th massacres in Israel. These attacks have disrupted trade and made it costlier as ships now have to divert through the Cape of Good Hope which elongates shipping time.

Djibouti’s alleged complicity in facilitating these attacks highlights the country’s duplicitous stance — it is supporting elements that destabilize global supply chains and threaten Western interests despite having benefitted from Western military aid.

Ironies and Double Standards in Djibouti’s Relationships

Djibouti’s lucrative military base agreements with the West, coupled with its alleged covert support for Iranian-backed groups, underscore a troubling double standard. Such actions cast doubt on the country’s reliability as a Western ally and raise concerns about whether Djibouti is playing a double game for political or economic gain.

Can the West continue to trust Djibouti? This question is particularly crucial at this point seeing as the country’s alleged involvement with these Iranian proxies is continuing to jeopardize critical supply chain routes whilst amplifying regional instability.

Interestingly, the EU’s High Representative for Foreign Affairs and Security Policy, Josep Borrel, recently travelled to Djibouti to meet with the country’s officials over these issues. In his account of the visit published in July, he described Djibouti as a crucial partner in a volatile region. He did not directly call out the Djibouti government over its alleged connivance with Iranian-backed groups, but he did emphasize the EU’s determination to counter Houthi threats in the Red Sea. He also advocated for continued EU cooperation with Djibouti.

Need for Djibouti to be Cautioned

Perhaps it is quite understandable why Mr Borrel chose not to be too critical of Djibouti. After all, the West needs the country to succeed in the region. Regardless, Djibouti cannot be allowed to behave anyhow it pleases without consequences. Besides its alleged destabilising activities in the Red Sea, the country has also been accused of meddling in Somalia’s Awdal region, destabilising the government in Somaliland in the process. It has also been accused of using its front companies to help the Chinese government to smuggle weapons into Somaliland and evade arms embargo.

If Djibouti’s connivance with Iran-backed proxies continues to go unchecked, the implication is that Iran’s destabilising influence in the region could grow deeper. In the event of this, countries like Ethiopia and Somalia are at risk of worsened instability.