How Somali Piracy was a boon for International Cooperation
Classical civilisation often traded with a fabled land known as Punt, famous for its ancient culture and customs and trading in goods that even Egypt’s Pharaohs coveted. Today, that land sits within the North-east of Somalia and still bears its ancient name of Puntland. When in 2009, the geo-political instability that has long plagued the Horn of Africa spilled over onto the high seas, Puntland’s pirate groups ensured that the region would again become famous; but this time it would be as an inhibitor of trade rather than a facilitator.
The world quickly paid heed. Though piracy on the high seas had a few notable ‘hotspots’ (Bight of Benin & Straits of Malacca et al.) none rivalled the scale, violence, and success rate of Somalia’s fledgling Unicorn industry. Over the next three years, piracy at the Horn of Africa would peak and subsequently decline in spectacular fashion. Though hugely disruptive to international stability, it eventually led to outcomes that would prove beneficial to Somalia and no less significant to the prospects for international co-operation.
The factors that gave rise to East African piracy are many; weak Governance within Somalia, poor security, ongoing conflict within the wider East Africa region, the collapse of fisheries due to illegal over-fishing and dumping of toxic waste by factory ships from Asia, are to name but a few. Compounding these factors was the physical and geographical reality of the Bab-el-Mandeb; a 20-mile-wide strait which linked the Arabian Gulf with the Suez Canal, and which acted as a chokepoint for international shipping. From 2010 to 2013, I worked out of East Africa and witnessed first hand, piracy at its peak.
Understanding the Business Model
The ‘hijack for ransom’ model is far from being a recent innovation. What was particularly interesting about the Somalian context however was the widespread support for pirate activities throughout Somali society. Offshore activities were supported by and dependent upon onshore enterprises, which became a massive boon for economic activity within the war-torn country. Its not hard to see why; it has been estimated that in 2010 alone, the amount of money flowing into Northern Somalia from just ransom payments, could be counted in the billions of dollars. In a country where the average daily income amounted to about $1.50, switching to the pirate economy was the simplest of economic decisions. While neighbouring countries such as Kenya and Egypt experienced significant losses in international trade revenue, Somalia was booming.
In effect, the money stopped flowing to countries doing legitimate business and into the coffers of a country long since exploited. Somalian society itself was organised along a system of clans. This clan culture provided a ready-made network for pirate enablers to bribe local politicians and businessmen, thus creating a power structure that allowed piracy to flourish within safe havens.
These enablers of piracy set the conditions that allowed hijacked vessels and crew members to be held in friendly waters for months and years at a time. While negotiations were ongoing, an anchorage fee was charged to the enablers by local politicians, with subsequent ransoms shared according to rank within the clan and local government. The ransoms involved in securing the release of vessels and crew grew as high as $385 million with the pirates themselves believed to take only a small portion of this. Though piracy stakeholders would receive the bulk of the ransom, the culture of the clan meant that these funds trickled down to all sections of clan society, thus ensuring resources were shared appropriately, albeit subjectively, and ensuring widespread support for pirate activities.
It follows that both stakeholders and pirates were afforded a great deal of kudos for their part in the business, something comparable to philanthropy in Western society. This combination of willing manpower, onshore stakeholder involvement and the right financial conditions led to the flourishing of this business model.
That the international community sought to break this business model was less to do with punishing Somalia and more about re-instating the security of international trade through the region.
For commercial shipping however, the more pressing problem was insurance. Transiting the Bab-el-Mandeb was now a high-risk operation that brought huge insurance premiums, and often meant no insurance at all for companies already struggling. The private sector moved to fill the gap and by 2009 there were dozens of private military companies operating in the region and within a grey area of international law.
At the same time, national Navies looked to plug the security gap through the Bab-el-Mandeb by patrolling a demarcated zone that all ships were obligated to stick to when transiting the area. Traditional rivalries were put aside as US warships frequently assisted Iranian sailors, or Indian warships assisted Pakistani sailors. By recognising a common threat, different spheres of influence around the globe were able to align incentives and deploy accordingly thus saving somewhere in the region of $18 billion to the global economy and saving many mariners the trauma of a pirate interaction.
In various guises, foreign aid flowed into Somalia with some organisations hoping that prospective pirates would be enticed into considering alternative careers on account of the generosity of foreign donors. This strategy met with mixed success and led to piracy wages increasing. This manifested itself as higher ransoms and thus, bargaining between hijackers and shipping company representatives becomes harder, meaning vessel and crew spend more time in captivity.
These initial responses, while balanced and appropriate were not however long-term solutions. For this, the international community really needed to pull their finger out. Surprisingly, that’s exactly what they did.
Led by a renewed effort from the African Union and backed by support from several Western militaries, the international community moved to secure the interior of Somalia, pushing the violent Islamist militia known as Al-Shabab to the interior of the country and out of the ports and cities. Unilateral support for Somalia’s emerging Government has been generally favourably received by the locals who recognise genuine attempts to resolve the cycle of violence.
Such approaches focus on building viable alternatives for the pirate enablers rather than defeating pirates at sea. In other words, breaking the business model. Local economic policy has been innovative and persuasive rather than threatening, applying regional solutions to regional issues. This was achieved by building political, economic and legal institutions that were more inclusive than had previously been the case, offering valid, legitimate ways for pirate activity to transition to ‘go straight’.
In addition, financial flows from pirate activity were targeted by law enforcement agencies, creating a significantly more cost-effective way of inhibiting piracy than deploying navies and opting for guile over force.
What this means for international cooperation
The ability of the international community to quickly scramble solutions in response to the rise of piracy off the Horn of Africa has been an impressive collective achievement. In a time when the world looks to be getting increasingly fractured and deglobalised this should offer us a lot of hope, especially in light of our necessity to deal with the climate crisis. It demonstrates that in the face of a pressing challenge, we can mobilise and respond accordingly.
In Somalia, the bread-and-butter economy was re-imagined and quickly re-organised, with risks turned to opportunities and problems understood in their proper context.
For Somalia, the desperation of their plight throughout the 1990’s and 2000’s led them to act and take their struggle external. While piracy cannot be condoned it drew attention to their plight. Real wages skyrocketed in pirate areas leading even to the creation of a local stock market. As the international community responded, over-fishing and dumping of waste offshore by large international trawlers faded away and pirates once more became fishermen.
It can only be hoped that this trend continues to play out into the future, where internal and external support for the Mogadishu Government, coupled with grassroots local advocacy leads to a long-term solution. This may in time, may bring back the Land of Punt into a modern, connected world which once again considers the maritime skill and enterprise of its people an asset to world trade.