By William Maclean
LONDON (Reuters) - Host to the most important U.S. and French military bases in Africa, the tiny Red Sea state of Djibouti agrees it faces a risk of retaliation from the Islamist militants its Western guests hunt on forays into nearby countries.
But it argues the menace is limited.
Instead, the strategically placed country points to what it suggests is a more significant, long-term security consideration: the poverty, unemployment and regional political instability it sees as potential pathways to extremist thinking.
"Of course we worry about the risks that could be represented by the international military and security presence," Djibouti Economy and Finance Minister Ilyas Moussa Dawaleh told Reuters on a visit to London.
"We accept that it represents a threat for us in terms of security," he said, before adding that security officials were capable of minimizing the risks.
"But the area where maybe we have to take care of, is properly fighting poverty and unemployment of our youth. Terrorists will be using that to manipulate those in need."
Djibouti, located on one of the world's busiest maritime sea routes and facing turbulent Yemen across the Gulf of Aden, hosts France's largest military base in Africa plus a major U.S. base, and the port is used by foreign navies patrolling busy shipping lanes off the coast of Somalia to fight piracy.
In December, Djibouti started contributing soldiers to an African Union force in Somalia fighting against al Shabaab militants trying to overthrow a fragile interim government.
Al Qaeda-linked al Shabaab has vowed to launch revenge attacks against African nations participating in the force.
But Dawaleh, in London for talks with British officials, suggested any security risks from militancy were under control.
"I don't think terrorists will directly attack the American camp or the French base," he said. "They will rather attack vulnerable Djiboutians and Djibouti interests, but people who are in charge of that subject are coordinating their efforts well to minimize (risk)."
JOBS ARE INSURANCE
Dawaleh said lack of regional economic integration was a more significant long-term stumbling block to economic growth and the regional stability that would provide.
With few natural resources and little industry, Djibouti has an unemployment rate of almost 60 percent. The nation depends heavily on foreign assistance for its balance of payments and to finance development projects.
Western media reports said Djibouti had received 30 million euros ($36.75 million) a year from the French in rent and $30 million dollars from the United States for the bases.
"Djiboutians are ... peaceful, not much oriented to this bad practice (militant Islamism). Djibouti has the particularity of a small city, a small country - everyone knows everyone. It is much easier to identify any kind of (threat)," Dawaleh said.
"But we have to address youth unemployment and poverty. This is the only insurance to avoid such a shifting towards that kind of practice."
Djibouti serves as a port for its landlocked neighbor Ethiopia, which accounts for about 70 percent of traffic, and is also bordered by Eritrea and Somalia.
Dawaleh said Djibouti, Ethiopia and South Sudan were making rapid progress in implementing projects to knit their economies closer together, including an oil pipeline, a fibre-optic cable and road and rail links.
South Sudan signed a memorandum of understanding with Ethiopia and Djibouti around trade in February which included the possibility of building an oil pipeline, a South Sudan official said in February.
Dawaleh said he wanted such ventures to serve as a model for regional integration. He added: "We need more economic and social integration rather than having wars and poverty." ($1 = 0.8164 euros)
(Editing by Alison Williams)