Somalia’s piracy is not just good news for the pirates themselves. Whole industries are springing up or expanding to take advantage of the bonanza.
In the town of Eyl, the pirates’ main base, where hundreds of foreign hostages are being held, new restaurants have opened to serve non-Somali food to the captives. Money changers, property developers and Land Rover dealers are doing a roaring trade as the pirates seek to invest their cash. And firms elsewhere in Africa and in the Middle East have spotted an opportunity for a quick buck by helping out with the payment system. Pirates want hard cash, not bank transfers, because getting the money from banks is slow and well-connected warlords can plunder it. So the ransoms have to be taken directly to the ships. This, however, increases the cost and the danger. As a security expert interviewed by the Sunday Times explains: “There have been attacks by other pirates on the way in [to deliver the ransom].” Air drop, he says, is safer, and “there are firms doing it out of Dubai and Mombasa.”
Smaller businesses are thriving too. Selling $3 cups of tea on credit to pirates before they brave the high seas is making life a little easier for a young mother in Eyl. Her clients pay her when they receive the ransoms. “If it wasn’t for them,” she told a Reuters reporter, “I wouldn’t be able to make a living.”
In a short but fascinating interview with the Guardian, a Somali pirate explains how he began his career:
I started to hijack these fishing boats in 1998. I did not have any special training but was not afraid. For our first captured ship we got $300,000.
Now you and I might go and splurge such a windfall on wine, women and song, but not this guy. In an impressively entrepreneurial display of business planning, he went out and bought AK-47s and small speedboats. Since then, he has captured a further 60 ships. He continues:
We give priority to ships from Europe because we get bigger ransoms. To get their attention we shoot near the ship. If it does not stop we use a rope ladder to get on board…After checking the cargo we ask the captain to phone the owner and say that we have seized the ship and will keep it until the ransom is paid. When the money is delivered to our ship we count the dollars and let the hostages go.
The 42-year old father of nine goes on to mount an interesting justification for his actions. He started off as a humble fisherman, he says, but was pushed into piracy by greedy foreign competitors:
At sea foreign fishing vessels often confronted us. Some had no licence, others had permission from the Puntland authorities but did not want us there to compete. They would destroy our boats and force us to flee for our lives.
He and his fellow buccaneers consider themselves “heroes running away from poverty.” What’s more, in a country with no government to police the seas (and a world where Egypt makes nearly $5 billion a year from policing the Suez Canal), “taxing” foreign vessels is only fair:
We don’t see the hijacking as a criminal act but as a road tax because we have no central government to control our sea. We will not stop until we have a central government that can control our sea.
H/T Chris Blattman.
The piracy fad may be spreading around the African coast. Last week a Chinese fishing boat was attacked off the coast of Sierra Leone in West Africa. The pirates, all from neighbouring Guinea, took off with money and a boatload of fish. Unfortunately, the heavy cargo slowed down the pirates’ vessel, allowing the Sierra Leone navy to catch up with it and, after a scuffle which left four pirates dead, arrest those remaining.
The West African coast has many of the elements that make Somalia a good spot for a bit of buccaneering – rank poverty, lots of underemployed young men, unstable governments, endemic corruption and favourable geography. If ships start avoiding Suez and going the long way round the Horn of Africa instead, they might be in for a nasty surprise when they reach the opposite side of the continent.