As Somalia stumbles through its most significant political transition since the fall of the Siad Barre regime, there are signs that the country’s most lucrative industry is also going through profound changes. The success rate of piracy halved from 2010 to 2011, and there are signs that this trend will continue.
Unfortunately for the new government, these statistics have little to do with any onshore developments. Piracy is the second largest generator of income in Somalia, yielding an estimated $200 million annually.
As pirate financiers invest more and more in the success of their operations, lucrative opportunities for local business have vastly expanded. A $4 million ransom will be injected back into the local economy and multiplied, benefiting a community that once lived in abject poverty.
There is little wonder why the practice has boomed when Somali per capita income is $600 and a minimum $10,000 is available for each perpetrator of a successful operation.
With 90% of the world’s trade is transported by sea, the opportunities are vast.
Shipping Adjusts to Piracy
The shipping industry has adapted its operations by introducing a number of best practices and dramatically increased its use of private maritime security companies (PMSCs).
Simple practices such as wrapping razor wire around the deck’s railings and the introduction of a designated citadel, have increased the difficulty of commandeering the vessel. This has in turn aided international naval operations by stretching the response time for an effective interception, allowing arrests to be made. Currently, approximately 1,000 Somali pirates are detained in 20 countries.
In February 2012, the Transitional Federal Government in Mogadishu signed a contract with Halliday Finch International to form a “National Coast Guard” capability with “immediate effect”. Meanwhile the semi-autonomous region of Puntland has also created the Puntland Maritime Police Force (PMPF).
However, there has been little evidence that these initiatives have had any success. The training is very basic and resources are limited in comparison with those available to the pirate groups.
Local policing has traditionally been orchestrated by clans rather than any central authority and there are indications that this will remain unchanged in the post-transition period. Tribal elders have been asked to nominate their own MPs who are likely to be lobbied by the richest kingpins in their delegated constituencies.
The extension of Operation Atalanta to allow the EU Naval Force to attack inshore camps, has raised international hopes of a significant curtailment in piracy attacks. Although this may bring some immediate success, it will be ineffectual in the long-run without onshore support from an organised Somali police force or military.
Onshore, Somalia’s two main pirate syndicates continue to be active and show little sign of disarray. They have not had to shift anchorages and have the funds to consolidate their hold on it as necessary.
The pirates have the capability to adapt, and are already doing so. There has been a recent acceleration in kidnap for ransom on land of aid workers and tourists who are then transferred to the coast for ransom negotiations. Some pirates have even begun to offer their services as ‘counter piracy’ and ‘negotiation’ experts.
A further concern is that sustained international pressure in local waters may force pirate groups to ally with Al-Shabaab (or Mujahideen Youth Movement, the Somalia-based cell of the militant Islamist group Al-Qaeda). This would create a cumbersome problem for the new government riding on the back of recent success against the insurgency.
What the Government Can Do
In order to tackle the problem effectively, the government would have to implement a strategy that does not solely rely on force. Communities must be presented with the opportunity to earn a wage that offers them a similar quality of life to what they currently experience. It may initiate this by a sustained investment campaign into the country’s economic infrastructure to kick-start primary sector business.
Before this can happen the new government needs to establish a reliable, transparent mechanism for aid disbursement, something that will not happen overnight.
A UN report recently stated: “Under the Transitional Federal Institutions, the systematic misappropriation, embezzlement and outright theft of public resources have essentially become a system of governance.” This highlights the extent of reform needed to turn the country around.
A successful dual-approach strategy could dramatically increase the opportunity cost of conducting piracy and lure the groups away from professional crime on land or sea. Improvements in vessel security may repel boarders for the time being. However until the new government is able to ensure its internal stability, the rest of the world will have to continue its policy of damage limitation on the high seas.
Additional reporting from Rory Hayward at Special Contingency Risks (SCR)