The area of Djibouti has been occupied by several tribes, currently the Afar and the SomaliIsa. These tribes had regular trade contacts with the Arabs, and adopted Islam as their religion.
In the 19th century, France established a protectorate in the area, named French Somaliland, governed by Léonce Lagarde. In 1967, the name was changed to the French Territory of the Afars and the Issas. On June 27, 1977, the country was granted independence as Djibouti.
A civil war led by Afar rebels in the early 1990s was stopped by a peace accord in 1994.
The economy of Djibouti is based on service activities connected with the country's strategic location and status as a free trade zone in northeast Africa. Two-thirds of the inhabitants live in the capital city, the remainder being mostly nomadic herders. Scanty rainfall limits crop production to fruits and vegetables, and most food must be imported. There are few natural resources and virtually no industries.
Djibouti provides services as both a transit port for the region and an international transshipment and refueling center. It has few natural resources and little industry. The nation is, therefore, heavily dependent on foreign assistance to help support its balance of payments and to finance development projects. An unemployment rate of 40% to 50% continues to be a major problem. Inflation is not a concern, however, because of the fixed tie of the franc to the US dollar. Per capita consumption dropped an estimated 35% over the last seven years because of recession, civil war, and a high population growth rate (including immigrants and refugees). Also, renewed fighting between Ethiopia and Eritrea has disturbed normal external channels of commerce. Faced with a multitude of economic difficulties, the government has fallen in arrears on long-term external debt and has been struggling to meet the stipulations of foreign aid donors.
The population is divided into two main groups, the Issa, or Somali people, who make up about 60%, and the Afar, about 35%. The remainder is formed by Europeans (mostly French and Italians), Arabs and Ethiopians. The presence of two population groups gives was the cause of the civil war in the early 1990s.
Almost all of the people of Djibouti are Moslem, only a small percentage is Christian, notably the Europeans.
Although French and Arabic are the official languages, Somali and Afar are widely spoken.