Even if pirate attacks off the coast of Somalia are now only sporadic, piracy is still a latent problem which inflicts high costs on international trade. The estimated cost of piracy in 2013 was somewhere between $3 and $3.2 billion. Shipping companies continue to spend huge amounts of money on safety measures and additional fuel to increase transit speed, while international navies patrol the Gulf of Aden and the Somali Basin.
These massive costs are inflicted by an “industry” that brought an average income of around $50 million per annum to Somalia from 2008-2012. The differences between the massive costs and meager profits of piracy imply that there has to be some room for a more efficient solution than expensive sea-based deterrents. Indeed, a recently released White House plan against Somali Piracy suggests that the Obama administration is no longer willing to commit naval assets in the long run.
But what would such a solution look like? In theory, laws and rules might support a “contract out of piracy,” in which foreign nations or shippers effectively pay pirates to cease their activities. The problem is that state-building is in its infancy in Somalia. The central government has not projected power beyond Mogadishu for decades, ceding control to a plethora of traditional clan-based elites, warlords and Islamist militias who provide governance and fight over territory. Without stable law and order in the remote coastal regions, there is no-one to make sure that all parties live up to their contracts.
A simpler approach may be to look to the key underlying conditions that make piracy possible. Our previous research shows that the key ingredient to the success of Somali piracy is land-based support, which has allowed pirates to keep their ships safe and the crews alive while ransom negotiations dragged on – usually for several months, sometimes for years. Without access to land and comprehensive security guarantees for the captive ships, pirates could only extract small on-the-spot “fines.” The 2013 World Bank report on Somali piracy identified 26 anchorages in which protection was offered to pirates. In a new paper we ask why there were only 26 pirate anchorages on a coast the length of the U.S. eastern seaboard, and argue that the answer to this question provides a new solution to privacy.
Neither Somalia’s physical geography nor the degree of political stability/instability explain where pirates find anchorage. Instead the willingness of communities to host pirates depends on harsh economic calculations. Local elites across Somalia fund their activities through taxation (or extortion – depending on your point of view). Elites that tax imports and exports in their ports have no sympathy for pirates: they drive away a more profitable, more stable and less risky source of income. Few people are going to want to trade with a pirate port, for fear that their own ships and cargoes will be held to ransom. Therefore, coastal regions and ports connecting to the wider economies of the Indian Ocean and Horn of Africa have never offered protection to pirates. Indeed, they have often engaged actively in counter-piracy – for example Somaliland and the various Islamist administrations in Kismayo.
In contrast, the Puntland and Central Somali pirate coast is arid, supports only nomadic herders and has no infrastructure to integrate it with regional trade routes. This means that there aren’t many other activities for local elites to tax. It is no surprise that they welcome pirate dollars in principle. Moreover, their eagerness to support pirates depends on how much money they need. Our research shows that the number of ships held locally shot up when there were territorial disputes or when funds were needed for closely fought regional elections. Once these political aims were achieved, the pirates were asked to leave. The 2008 “pirate capital” of Eyl sent pirates packing in 2009 after the local clan’s candidate won the presidential election.
These insights provide the beginnings of a new approach to stopping piracy at its source – developing the local economies that are most prone to support piracy, because they don’t have other good economic options. You don’t necessarily need a stable political settlement for Somalia as a whole to do this. Instead, you need to build a transport infrastructure which integrates the currently remote regions into the wider regional economy. This will change the local attitude to piracy from “welcome revenue source” to “economically damaging nuisance.” There is no need for a contract or its enforcement: the choice is self-enforcing.
Would this work? We know that it’s worked in the past. Bosasso in Northern Puntland switched from supporting piracy to closely cooperating with the international naval mission on counter-piracy around the time the Saudi ban on Somali cattle exports was lifted in 2009. When Bosasso regained its role as a major export center and customs revenues shot up, pirates became a problem and tackling them a policy priority. Upgrades to the harbor facilities in 2012 doubling port capacity reinforced that calculation.
This doesn’t mean that road building is a comprehensive substitute for state building. Although it would be an effective counter-piracy measure, it would do nothing to address other forms of maritime crime such as drug and people smuggling, and unlicensed fishing, all of which can coexist perfectly happily with trade. There is still a good case for helping to develop Somalia’s capacity to enforce law and order in its remote regions and its territorial waters. But roads are helpful as a complement to state-building efforts – they will kick-start economic development and reduce opportunities for insurgents to hide and be supported by disadvantaged populations. In the short term, road building can help tackle the problem of Somali piracy, and combined with state building it can help address Somalia’s problems over the longer term too.
Anja Shortland is a Reader in Political Economy at King’s College, London. Federico Varese is a Professor of Criminology at the University of Oxford. The academic article this post is based on, “The Protector’s Choice. An Application of Protection Theory to Somali Piracy,” is forthcoming in the British Journal of Criminology, and is available here.
Note: Updated Oct. 9, 2023.