The relatively young Republic of Djibouti—on the Horn of Africa bordering Ethiopia, Somalia, and Eritrea—has a 30 percent poverty rate when looking at a combination of health, education, and standard of living. Nineteen percent of its population lives at an income level of less than $1.25 a day. Since its independence from France in 1977, Djibouti has struggled with a fledgling political system, civil war between the main ethnic groups (Issa and Afar), little basic infrastructure, and few civic institutions, including no independently sustainable economy, a poor educational system, extreme geography and climate, and lack of water. These factors exacerbate poverty.

Most of the 810,000 people in the Republic of Djibouti live in the capital, the city of Djibouti. The national unemployment rate is more than ...

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