Somalia: The Cost Of Doing Business


June 3, 2009: The anti-piracy patrol off the coast has had an impact. While last year, 40 percent of pirate attacks resulted in a captured ship, so far this year, only 25 percent of attacks have succeeded. Between the cost of the anti-piracy patrol, and the additional insurance, fuel and danger pay for the shipping companies, the Somali piracy is costing shippers, and their governments (who are paying for the anti-piracy patrol) over half a billion dollars a year. It is making it a little more expensive to use the Suez canal (but it is still cheaper than steaming around southern Africa.) The pirates are getting (in ransoms) less than ten percent of the money spent on dealing with the piracy. Most of the money goes to insurance companies, security firms and suppliers of fuel and other items needed to maintain the foreign warships off the coast. The shipping industry is more confident that they can deal with the pirates, while the pirates are discouraged by the lower success rate and the increasing pressure they are getting from other Somalis.

Another factor in the declining pirate success has been the increased use of aerial patrols by the foreign task force. There are at least half a dozen maritime patrol aircraft stationed in Djibouti, and dozens of helicopters aboard the ships of the task force. All these aircraft make it difficult for the pirates to sneak up on ships (who are more wary, careful and prepared these days).

Puntland, a self-declared (since 1991) independent part northern Somalia, is offering to deal with the piracy problem by forming a real Coast Guard and stronger police force. All they need is recognition from the UN that Puntland is a real nation, and about $10 million to buy patrol boats and hire crews and cops. It's a tempting offer, which several other nations in the region have recommended, but the UN has not been eager to go this route (which means recognizing the fragmenting of Somalia into three states; Somaliland and Puntland in the north, and the other half, as Somalia, in the chaotic south). But the UN did give the Puntland government (which it talks to, even if it won't officially recognize) eleven vehicles (ten pickups and a larger truck) for their security forces. The U.S. could easily supply the money Puntland wants, but the corruption up north is a problem, as it is throughout the region. There's no assurance that the money for a Coast Guard would not largely disappear into someone's pocket.

The UN is trying to figure out how to deal with Eritrea, which is the major source of outside support for the Islamic radical groups inside Somalia. Cash poor Eritrea, in turn, is backed by oil rich Iran. The UN can't do much, unless they slap an naval and air blockade on Eritrea. This is unlikely, as the UN does not have the air and naval resources to implement this. A few press releases, calling Eritrea very naughty, are more likely.

Al Shabbab has imposed a curfew in the port town of Kiamayo, in the wake of attacks on their gunmen. The Islamic radicals have imposed strict Sharia (Islamic) law on the people of Kismayo (no booze, drugs, music, videos, dancing and so on), which is very unpopular. Now Kismayo also has problems with warships off the coast preventing cargo ships from docking there.

The activation of a new underwater fiber optic cable, being  laid off the east coast of Africa, has been delayed by at least ten days (to early July) because of the pirates. The ships involved in the cable laying have had to take additional precautions to avoid being attacked. Once this cable is activated, the cost for Africans using the Internet will decline by over 40 percent. International phone calls will also be cheaper.

Russia has handed Iranians and Pakistanis, captured on a pirate mother ship, to Iran and Pakistan. Not all the pirates are Somali. A large minority are Yemeni and, as the Russian experience shows, some other nationalities as well.

Last month, the fighting in Mogadishu left over 200 dead, and caused 60,000 people to flee the city. So far this month, several thousand more civilians have fled, as government and al Shabaab militias fought over neighborhoods in the northern and southwest sections of the city. Al Shabaab is retreating this time, and there have been nearly fifty killed.

June 1, 2009: The fighting in Mogadishu resumed, after a lull of a few days. The government has brought in more men and drove al Shabaab (and related groups) out of a neighborhood on the outskirts of the city. The Islamic radicals continue to use suicide and roadside bombs, which continue to kill more civilians than armed men.

May 29, 2009: The Somali government declared a blockade of ports and airports controlled by Islamic radical groups like al Shabaab. This includes the port of Kismayo, where cargo ships are now being kept away by foreign warships. There are, however, no foreign warplanes available to keep aircraft from using airports in al Shabaab territory. This is how a lot of the weapons are getting to the radicals (often from Iran, via Eritrea.)




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