1. The Political Economy of Somali Piracy
Fowzia Abdi, Leonie Le Borgne, Ryan Coatalen-Hodgson, Allison Enns & Krystina Kohler.

2. Central Question
“What are the factors that make the Gulf Of Aden vulnerable to piracy?”

3. Thesis
A historical lack of governance, indifferent/impotent international response and a proximity to huge wealth has made piracy a ‘weapon of the weak.’ (James Scott)

4. Scope International Relevance and Consequences Somali Conflict History
Relevant Actors and Perceptions of Piracy
The Economy of Piracy
Theories Applicable to Piracy
Conclusions

5. What is the relevance to us?
Critical
In Danger
Other than the obvious humanitarian imperative, you might ask why a relatively small (in population terms at least) African Country should be of any particular interest to us. According to the 2011 List of Failed States promulgated by the US think tank ‘Fund For Peace’, Somalia is but one of 35 failed states in the world. Even if we confine our examination to Africa, Somalia would appear to be just another failed state in what Collier would describe as a bad neighbourhood. Despite the fact that Somalia has been in a state of near perpetual chaos for over 2 decades, it has until recently failed to garner the same level of international response that conflicts elsewhere have triggered. Even a 2011 famine which was described by the head of the UN’s World Food Program as ‘the worst ever seen’ went largely unreported by Western Media. However, whenever there has been mention of Somalia in the press in recent times, it has largely been in connection with the subject of Piracy.
Foreign Policy
2010 Failed States Report

6. Maritime Geography `
 Somalia lies adjacent to the Gulf of Aden and a short distance from the Bab Al Mandab straits , where the distance between Africa and the Arabian Peninsula closes to only 16 Nautical Miles. This makes the region a natural chokepoint, with an average of 1500 high value cargoes passing through the region each month. It is not hard to see the significance of this region in terms of global trade. The only traffic using the route from Malacca to the Cape of Good Hope is are those few vessels too large to pass through Suez; this has been reduced in recent years due to the operation of the SUMED pipeline between the Red Sea and the Mediterranean, thereby allowing tankers to transfer their cargo without passing through the canal. This in turn has made the Bab el Mandab and the Gulf of Aden more significant and has served to increase our reliance upon these sea lines of communication.

7. Regional Maritime Trade
8% of World Trade.
33 Million TEU per Annum.
50% of Europe’s Oil.
3.2 Million Barrels Per Day.
TEU- twenty foot equivalent unit. Main method of shipping non bulk cargo around the world. Also significant tanker and bulk traffic in the region.

8. Routes Gulf of Aden is a crossroads for East-West trade.
Economic Consequences of disruption:
Closure of these sea lanes estimated to add 30% to prices of all freight.
From To
NM Via Suez
NM Via Cape Horn/Panama
% miles saved
Jeddah
Piraeus
1320
11207 88
Tokyo
Rotterdam
11192
14507 23
Ras Tanura
New York
8281
11794 30
Colombo
8600
14073 39
Singapore
10133
12506 19
Jeddah and Ras Tanurah major oil export hubs.
Rotterdam is Europe’s largest container port. possibly
Singapore is arguably world’s busiest container port (after Shanghai)
Designated as a strategic chokepoint by US Energy Information Administration.
Closure of Suez Canal would add 14 days to a transit to Europe/US from the Gulf/Indian Ocean; which in turn would also place pressure on fuel supplies- therefore raising prices yet further. Vicious circle.

9. Economic Consequences
Suez Canal was closed after 6 Day War in 1967; reopened 1975.
Trade has become increasingly international since, as has reliance on Middle Eastern Oil. Effect likely to be far more severe today.
Feyer (2009)

10. Ungoverned Space?
Bab Al Mandeb is only 18NM wide and so ships are obliged to converge in order to proceed to/from Suez.
However, territorial waters are not sovereign in the same way as land borders are, as Merchant Vessels and Warships are allowed to pass through territorial waters on the basis of innocent passage; that is if they are genuinely en route to another destination not reachable by other means.
The UN Convention on the Law of the Sea (ratified 1994) allows states to claim 12NM of territorial waters from the low tide mark of their shore line. States themselves are responsible for policing these waters, with national law taking precedence in these areas. There are a couple of issues with this in regard to the Gulf of Aden.
(1) UNCLOS replaced a number of older conventions and was designed primarily to secure a nation’s economic rights- fishing/oil/minerals etc. There is no presumption within UNCLOS in terms of obliging a state to secure its waters.
(2) Somalia is currently a ‘failed state’ and so does not have the resources to police 3300km of coastline. Furthermore, given that Somalia is not bearing the costs of piracy, then there would be little reason to expend resources on this problem. This is a derivative of Olson’s collective action problem.
(3) Yemen has been embroiled in an insurgency since 2004 and likewise lacks the resources required to secure its coastline. Again, given that Yemen is not bearing the costs of piracy, there is no incentive to spend resources on this problem. (Collective action problem)
The dashed red line indicated the recommended track for merchant vessels transiting the area. The Internationally Recommended Transit Corridor is patrolled by in excess of 50 warships from a variety of nations and organisations. However, given that these ships have responsibility for 1.1 Million square miles of sea and that pirate attacks have occurred at distances of up to 2000 km away from the eastern shore of Somalia, then it is clear that these forces are not entirely successful in preventing piracy. This is a clear case of an attempt to address the symptoms, rather than the root cause of the issue.

11. Legality
Very limited provision for enforcement within international law. UN Convention on the Law of the Sea states that :
“All States shall cooperate to the fullest possible extent in the repression of piracy on the high seas or in any other place outside the jurisdiction of any State.”
Article 100, UNCLOS.
“We lack a practical and reliable legal finish.”
Admiral M Fox USN
Commander 5th Fleet.
We have already seen that the Somali state has neither the means nor the present inclination to secure its coast and territorial waters. Beyond the 12 mile limit, we move into the realm of the high seas, where things are even more complicated. The high seas are in effect ungoverned space, with no state having primacy or the right to enforce judgment in this area. Article 100 of the UNCLOS states that: All States shall cooperate to the fullest possible extent in the repression of piracy on the high seas or in any other place outside the jurisdiction of any State. This, in effect, internationalises the problem. It becomes simultaneously everyone’s and no-one’s.
International action at sea is highly limited. Other than the provisions made for piracy within article 100 of UNCLOS (United Nations Convention on the Law of the Sea), the only other offence addressed explicitly by international maritime law is that of Slavery. As such, merchant vessels are subject to the laws of their flag state (and many are registered under flags of convenience). Even then, the flag state is frequently different to that of the beneficial owner- the person who is paid for the use of the vessel. This tangled situation is illustrated in the case of the Motor Vessel ‘Sunshine’, which was Greek-owned but operated under a Bahaman flag. It was attacked by Somali pirates in international waters, with a multinational crew but in the so-called exclusive economic zone of Oman. Who has jurisdiction?
Pirates are frequently released in the absence of any viable legal mechanism for prosecution, thereby perpetuating the problem. In those few cases where states have prosecuted pirates under their own national laws, one has to ask whether these decisions are economically rational (ie recent German trial, trials in Kenya etc)

12. Historical Pattern of the conflict in Somalia
Siyad Barre
Somali military vs Somali National Movement (SNM) 1988
Government forces vs growing number of clan based liberation movements ( )
It all started in 1969, when General Mohamed Siad Barre took power by military coup and became the President of Somalia.
Between the years of the country endured three major armed conflicts:
1. Ogaden War with Ethiopia ( )
Somali forces intervened to support the rebel fighters in an attempt to liberate the Somali inhabited region of the Ogaden. Somalis lost the war and suffered 250,000 casualties. Losing the war paved the way for future internal conflicts, many Somalis held Siyad barre accountable for losing the war. This led to the emergence of Somali Liberation Movements such as the Somali Salvation Democratic Front (SSDF) in 1978 and the SNM in 1981, formed by members of the Isaaq clan who to gain control over the North West of Somalia.
This leads us to the second conflict where Siyad’s military committed atrocities against the Isaaq clan in 1988 by killing 50,000-60,000 Somalis .
Other popular liberation movements included United Somali Congress (Hawiye clan) and the Somali Patriotic Movement (Ogden clan.
As a result of these movements, Barre’s government collapsed in early 1991 due to years of disastrous military campaigns combined with backward Marxist economic policies and clan based discrimination which was eventually defeated by the movements I just mentioned (Bahadur; 2011, p.26).
• Barre’s departure left a power vacuum, all public institutions disintegrated. Virtually all political, economic and social activity underwent a process of extreme decentralization.
• Somalia immediately broke down into the third conflict of clan-based militia warfare. They turned on each other in pursuit of controlling key resources in: markets, ports, water points, road blocks, state property, private property in urban centres, and the fertile agricultural lands between the Juba and Shabelle rivers. As a result a widespread of violence between the warlords emerged which led into an intra-state war
• The civil war, draught, lawlessness, and famine resulted in displacing millions of Somalis internally and externally from the 1990s onwards, an estimated 250,000 Somalis died in the war and the famine
The food aid became part of the war economy, Militias fought to gain control of it and the warlords used it as a commodity to fund the war
By contrast, the central part of Somalia (Puntland) where the SSDF had more support achieved some form of stability While the Somali National Movement gained full control over North West Somalia and declared its independence in May 1991

13. Historical Pattern of the conflict in Somalia
United Nations Operations in Somalia (UNOSOM),
Post 9/11 the Arta Peace Conference in 2000
Transitional Federal Government (TFG) 2004 –current
The international community came to realise that there was a need to protect food relief and end the famine in Southern Somalia. It began with US led UN sanctioned multilateral intervention of 30,000 troops. Initially this intervention led 15 Somali factions to meet and negotiate for a Transitional Federal government in the Addis Ababa Declaration of March However, General Aideed felt his interest and power was being threatened and challenged the UN where he administered attacks on UN forces and killed 24 peacekeepers. This event leads us to the Black Hawk down in which sealed the fate of the UN operations in Somalia when 18 Americans were killed among thousands of Somali civilians.
3. In order to establish law and order Somalia, Djibouti government took the initiative of holding the Arta Peace Conference in 2000 to help Somalis establish a transitional government, but the conference failed for a number of reasons. The first key actors in the country Puntland and Somaliland regions were not brought in to the talks. The second reason was that the TNC was focusing on securing foreign aid and external recognition, rather than engaging in building a central effective government.
4. The TFG was formed in Kenya in 2004 colonel Abdillahi Ysufu the founder of SSDF (1978) won votes to become the president
In 2006, the increase of conflict in Mogadishu resulted in the formation of the Alliance for the Restoration of Peace and Counter –terrorism (ARPCT)but the Sharia oriented Islamic Courts Union swiftly consolidated power and succeeded to gain control over Mogadishu and the southern part of Somalia by overthrowing the ARPCT
This led to a fierce warfare between the TFG which was supported by Ethiopian troops and African Union peace keepers. In December 2006 Mogadishu was retaken from the ICU, nonetheless this intervention killed many people and led to widespread of instability in the country, making humanitarian, political, and security worsen across the southern part of Somalia. Ethiopian trrpos withdrew in 2009 but left a very fragile state with hesitant African Peacekeepers
Although the ICU was dismantled but some of its members regrouped as Harakat Al-Shabab. They expanded rapidly establishing strict Islamic rule in some areas in Mogadishu, Kissmayo and other parts of Southern Somalia. They are aiming for “true Somalia into Islmaic state”
In 2009 the leader of the ICU Sheikh Sharif Sheikh Ahmed was appointed as the new leader of the TFG
In 2009, Al-Shabab captured some parts of Mogadishu but failed to overthrow the TFG.
Somalia’s lack of government control for 20 years has resulted in the widespread of lawlessness, violence, socio-economic deprivation, and large number of piracy attacks off the Somali coast.

14. Causes Of Somali Piracy
Lack of government, security, and accountability (Political Piracy)
Illegal fishing and dumping of toxic waste (Defensive Pirates/Resource Piracy)
Poverty and unemployment (Rational Choice)
Lack of legal and maritime counterstrategies (Ransom Pirates)
Globalisation and technology
Political piracy began in Somalia during the last days of Siyad’s regime in and immediately disappeared once the regime ended. The SNM in retaliation against the regime military operation in the North of Somalia in (1988), hijacked and blocked seaborne supplies from reaching areas controlled by the government.
Illegal fishing and dumping of toxic waste drove many Somali young men into defensive piracy
Poverty and unemployment as a result of the civil war drove many people into piracy. Many participate in piracy because the possible gains are higher than the possible costs. A lot of young people feel that they have nothing to loose and another factor is that greed became a driving force for youth to engage in piracy
Although many ships pass through the Gulf Of Aden and the Indian ocean use barbed wire, water hoses, and private security but others that come from poor countries fail to take the correct security measures to protect themselves.
Another important reason is that the government of Puntland is struggling to keep up with its internal security and is currently finding piracy a challenge. According to its current president Abdirahman Farole (2009-Current) when asked about piracy he said” we are not prepared to create a coastguard without international help, adding that the fight against the pirates would be in the hands of Puntlands regular ground troops deployed from Bossaso”. He continues to state that “measures need to go beyond preventing piracy against commercial ships, piracy is [the international community’s] problem- well its ours too but what is specifically our problem is illegal fishing” (Bahadur, 2011, pp.71-72).
Finally, globalisation created new dynamics which pirates are able to use such as communication technologies, speed boats, laptops, and mobile phones that operate nearer to land and on high seas.
There were no episodes of Somali piracy before Somalia’s national government began to disintegrate in 1989
According to Samatar et al article “The Dialectics of Piracy in Somalia: the rich versus the Poor” state failure and the forces that contributed to the state failure paved the way for piracy
In his article he divided piracy operations in Somalia to four categories:
Resource Pirates: These are external companies which began after the state collapse to loot and use the opportunity of the ungoverned space to lure fish resources and dump toxic waste.
Defensive Pirates: A combination of ex coastguards and fishermen aiming to rebel against the trespassers and also challenged illegal fishing.
Ransom Pirates: These are the criminal who are recognised around the world. They sleek the opportunity of looting ships due to lawlessness and absence of government. They tend to mimic the defensive pirates motives of protecting Somali shores but have managed to gain annually a profit and surplus of 35 million in exchange for their victims.

15. Regional Actors
Looking at the individuals and groups involved in piracy of this area, I’ll divide it into regional & international actors and connect the actors in a supply chain.
The most visible of the regional actors are the pirates, themselves. The pirates originated as fishermen rebelling against the illegal overfishing of their seas and toxic waste dumping. In this ideal, one pirate group refers to itself as the ‘National Volunteer Coast Guard’. The majority of the pirate groups today, however, are rent seekers in a booming industry.
Less visible actors include the enabling officials of the government or Al-Shabaab, and almost invisible are the financial sponsors of the piracy.
Somali Pirates on a fishing vessel, January 6, (Tyler Hicks/The New York Times)

16. International Actors
On the international level, organizations have been created out of piracy, and actually are the biggest benefiters of it. This includes organizations to deter or prevent piracy, international naval forces, and the two main profiteers: maritime insurers and private security companies. (This image shows a French private security officer overlooking a French ship as it travels through the Gulf of Aden)
Flying on board a Panther helicopter dispatched from the French frigate, Le Floreal, a crew member watches a commercial ship during a supervision mission on January 11, 2009, in the Gulf of Aden. (Stephane de Sakutin/AFP/Getty Images)

17. The Piracy Value Chain
Piracy is a cyclical enterprise and there are many actors in this story, but by following the flow of money we can view these actors through a Piracy Value Chain. The number of actors adds to the costs and complexities of the issue. There are two levels of actors in the piracy value chain: the pirate level and the international one. On the pirate level, the three most important players are the sponsors & financiers, the enabling officials and the pirates. Between these three are layers of infrastructure such as the operational planners; provisions, drug and arms suppliers; boat chandlers; ransoms & hostage negotiators; and money transfer operations & the informal value transfer system. The insurers and private security companies of the international level are believed to fall into the supply chain between the money transfer operations and the financiers, with the aid of Somali's regional law enforcement.

18. Different Perceptions
Sympathetic to pirates
Pirates as criminals
Linked to terrorists?
There are a number of competing perceptions of Somali pirates:
The first two have already been discussed…
there are those who are sympathetic toward the pirates
tend to focus on the defense pirates who created a “coastguard” to protect their shores from illegal fishing and dumping of nuclear waste
there are others who see pirates primarily as criminals who are kidnapping innocent victims for ransom
they are portrayed at threatening maritime security and global peace
This is probably the most common point of view in western media
However there is another perception that insists on the connection between pirates and terrorists
for instance, UN reports equate piracy with terrorism on numerous occasions
There are claims that piracy money is used to purchase weapons for Al-Shabaab
Suspicion seems to stem from the fact that a US naval vessel (the USS Nicholas) was attacked by pirates
What is clear, however, is that despite these claims, there is little to no evidence that Somali pirates have any connections to Al-Shabaab or other terrorist groups
Quote from a report by Joana Osei-Tutu sums up this logic; “though there has not been, to date, any concrete evidence to prove this statement [that Somali pirates are becoming agents of international terrorism], happenings and attacks in the region seem to point to that fact”
Rothe and Collins argue that the international political community has criminalized pirates, drawn questionable links to terrorist activities, and neglected to address the initial reasons piracy started, and that by doing so pirates have been framed as a global threat to security
This rhetoric then securitizes piracy and in doing so legitimizes a militarized sea-based response
thus there is no consideration for the root causes of piracy or underlying political, social, or economic factors in Somalia
This is an illustration of the self-interest of Western states and the lack of political will to address the broader more complex issues facing Somalia
(REUTERS/Bundeswehr)

19. The Economy of Piracy Average ransom: $5 million
- although the number of successful hijackings has gone down in recent years (from 27% in 2010 to 13% in 2011), the ransom amounts are continuously increasing
- ships are held ransom for an average of 6 months until a negotiated price is determined, which is around $5 million on average
- in 2011 the total ransoms collected were $ millions (almost ten times the size of the government of Puntland’s budget in 2009)
Average ransom: $5 million
Total ransoms collected in 2011: $159 million
(HO/AFP/Getty Images)

20. - ransom is typically paid in cash (usually American dollars), is air dropped onto ship, and is subsequently divided up within the piracy network
Parachute dropping $3 million in ransom to pirates who hijacked the Sirius Star supertanker from Saudi Arabia
(REUTERS/David B. Hudson/U.S. Navy photo/Handout)

21. Pirate Network Seized document from 2010 outlining the distribution of
- ransom is used to pay for the direct costs of the operation, including but not limited to:
- paying employees – accountant, negotiator, cook, logistics coordinator
- provisions for pirates and crew (including food, drinks, qaad, clothing)
- other equipment used for hijacking
- the profit is then divided between those who have invested, guard force, pirates, and the community
- how profits are divided varies and is hard to determine
- investors/sponsors may get 30-50%, guards as much as 30%, pirates typically get around 40%, and 10% goes to the community through gifts and bribes
There is therefore an economic incentive for individuals to become involved in piracy
average pirate can make anywhere from $ to over $ from one hijacking
Seized document from 2010 outlining the distribution of
shares amongst pirate network (United Nations Security Council, 2011)

22. Cost of Piracy
- The cost of piracy includes military responses, and the direct and indirect costs for shipping companies
- indirect costs – loss of use of ship for number of days it is held ransom
direct costs not only include the actual ransom, but also:
defence mechanisms, of which increasing speed is reported to be the highest (this is a defence mechanism, as no ships going more than 18 knots have been hijacked) (see pie chart)
insurance for their ships (has increased tremendously as piracy becomes more prevalent and likely)
- These costs for shipping companies are often reflected in prices of the goods that are being transported, and thus are passed down to consumers
The Economic Cost of Somali Piracy 2011,

23. Economic Impact on Somali Communities
Beneficial?
People gather to collect their share of a ransom (REUTERS/Mohamed Ahmed)
- it has been argued that piracy positively impacts communities in Somalia by bringing in money to local communities and creating demand for local businesses
- these claims are hard to prove, as money from pirates is not tracked and there are such diverse opinions/explanations
for example:
- pirates benefit suppliers in coastal towns, such as Garowe, as they often live and spend their money there
pirates hire people locally, therefore creating much needed employment
- supposedly a certain percentage gets reinvested into communities to fund hospitals and public schools
- evidence for this claim has been increases in houses, roads, mosques, hotels in place like Garowe
- stock exchanges have also been set up where people can buy shares in different “maritime companies” or provide weapons
- this has made piracy a community activity where non-pirates can benefit

24. Or harmful?
while some may benefit from and therefore glorify piracy, others see them as criminals who have brought harm into communities
religious reasons
pirates promote un-Islamic activities such as drugs and alcohol, in additional to stealing
economic reasons
claim that the influx of American dollars creates a case of Dutch disease
some complain that in reality most of the money is spent abroad and therefore local communities benefit very little
Sign in Garowe that reads “No Pirates Allowed” (newyorktimes.com)

25. Theories Duffield: Rational choice theory/ Greed vs. Grievance
Insured and non-insured/surplus population
Containment
Rational choice theory/ Greed vs. Grievance
First grievance due to over-fishing and waste dumping, slowly turned to greed, but not solely founded in greed.
Islam’s role in order, not economy
Moral flexibility: “one man’s coast guard is another man’s pirate”
Note: Is there a gap between the actions of companies and countries?
Also, should we add something about border theory? Or would this be more suited in the ‘ungoverned spaces’ slide?

26. Charles Tilly and Somali Pirates
“Robin Hood's conversion to royal archer may be a myth, but the myth records a practice.” Tilly: 1985: 173

27. Mancur Olson Roving Bandits vs. Stationary Bandits
Which are the Somali pirates?
Olson’s taxation system might be useful for the eventual state-building process in Somalia. Easier said than done. Also contradicts Tilly’s emphasis on internal (bottom-up) state formation.
Applying stationary bandit these to Somali Piracy structures: even and equal distribution of revenues, which makes piracy continue.

28. Samatar Moral economy Conditions for piracy to exist
Types of pirates: resource, defensive, political, and ransom.
A simplistic, unbalanced perception of piracy in the West enrages Somalis
“Thus Somalis see the discourse on piracy as a clear manifestation of the double standards used in the international system.” (1389)

29. Thesis
A historical lack of governance, indifferent/impotent international response and a proximity to huge wealth has made piracy a ‘weapon of the weak.’ (James Scott)

30. What makes the gulf of Aden vulnerable to piracy?
Geographical location
Historical conflict lawlessness
Proximity to wealth
External plundering of local resources
What keeps this area vulnerable
A sticking-plaster approach rather than addressing root causes.
Our conclusion is as follows: