Although small, Djibouti is what you would call a "geo-strategic country"

The entire country is wrapped around one of the most economically significant regions on the planet.

Djibouti is located on the horn of Africa, bordered by Eritrea, Ethiopia, and Somalia, right across the Gulf of Aden from Yemen on the Arabian Peninsula.

Djibouti is one of the busiest shipping lanes in the world, right at the mouth where the Indian Ocean and Red Sea meet at the Bab-el-Manden Strait.

This is what puts Djibouti in such an advantageous geoeconomic position.

The country is divided into 6 regions and the straight-forwardly-named capital "Djibouti City" rests on the coast on the southern eastern part of the gulf.

Djibouti City, nicknamed "The City of 7 Masks"  hosts about 70% of the entire countrys population.

The entire country surrounds the Gulf of Tadjoura, which plays probably the most important lifeline role in the country.
Djibouti lays to the uninhabitated/disputed Doumeira and Kalida Islands, with Eritrea and the Ka A-Dabali Islands.

There are also small islands inland, like the Ile du Diable, or "Demon island".

 Its called that way because its always foggy there  and its said that the people who go there never   come back the same.

Majority of the people live in extreme poverty.
Unproductive politicians and power hungry governments are the main cause of underdevelopment in Djibouti and throughout sub-saharan Africa.
Only getting educated politicians who studied in the west and democracy can lift the crushing burden of poverty.

The landscape may be a little harsh and desolate, but if you can build a base here, you have access to an intercontinental network and gateway that opens up a world of opportunity and security.

Djibouti hosts a wide range of military contingents from other countries off their land, such as France, Japan, and the only permanent US base in Africa as well.

In return, this creates an income stream for the national treasury and allows a somewhat steady economic grow for Djibouti.

The country as a whole acts as a major transit hub for refueling and transporting goods  coming into the area, especially for Ethiopia, as they cant really use Eritrea much.

In a nutshell, the entire country used to be under French rule as French Somaliland and then later as the territories of French Afar and Issa until they finally got their independence in 1977.

Unlike Somalia and Eritrea, Djibouti has a much higher political stability and general wellfare index,
  as they try to stay neutral or uninvolved in international conflicts.

This means that unlike OTHER areas, Djibouti has had some time to actually work on development projects, like building a railway to Addis Ababa, Ethiopia, or 2 new airports.

Not everyone will agree, but some Djiboutians believe that with all the escalating new international investment, theyre hoping to become the "Dubai" of the Horn of Africa.

The country is precariously positioned right near the tripoint border between the Somali, Arabian, and African plates that further split down into into the East African Rift.

This puts Djibouti in a hot seat.