Djibouti has a strategically vital location for protecting the straits between the Gulf of Aden and the Red Sea which leads toward the Suez Canal that is the main sea route from the Indian Ocean and Asia to the Mediterranean and Europe. Unfortunately this is one of those remnants of European colonialism that split off a tiny part of a larger territory to more easily control an important thoroughfare or port, similar to other such artificial constructs like Singapore, Kuwait, Panama, Hong Kong, Gibraltar, etc. In that sense it’s not really a real country and if not for European colonalism would be part of one of the larger neighboring states.