AfricaEI ExclusivesExclusives - Africa related business & economics publications

Africa Exclusives Archive:

Search For Exlusives:

Volume 1, Issue 1 Download Issue PDF download

Exclusives articlePirates of Somalia

The current Proliferation of piracy off the coast of Somalia has posed a substantial threat to development and commerce in the Horn of Africa. Ravaged by political instability, internal strife, and one of the least developed economics in the world, Somalia is a prime location for piracy. Maritime hijackings in…

I – Introduction

This study examines the issue of Somali piracy and its Geo-political and economic impact on the region. Three main issues are examined; First issue, answers the posed question “what is piracy? and who are the pirates?” for the reader. The second issue discusses the Somali piracy dilemma and its strategic significance. Finally, the third issue assesses the impact of piracy on Somalia and the global response.

Concerning the question posed, “What is piracy? And who are the pirates?”, a little historical background on the topic will be examined briefly. The rising phenomenon of piracy will be studied to explain the geographical distribution of pirates, their origins, their objectives, and the manners in which they accomplish their goals. Moreover, an insight view of their way of living, interaction with society, and the extent by which the piracy profession is expanding in Somalia and its causes.

The second part examines the implications of piracy on the stability, security, and economies of the varying countries of the region, specifically Egypt and Yemen. Being the two countries that control access to the Red Sea, through the Suez Canal and the Gulf of Aden, these two countries are the most impacted by the piracy problem.

The third part examines the impact of piracy on Somalia in general while shedding light on global responses to fight this rising phenomenon. Countries like the United States, France, and Russia are examined through their efforts to combat piracy and install regional stability.

II – Overview

Piracy off the shore of Somalia has been a problem since the early nineties. The majority of the pirates are based in Puntland, one of the poorest areas of the country. They operate primarily in the Gulf of Aden in the Indian Ocean, between Yemen and Somalia. Most of them are former fishermen whose livelihood has been threatened by overfishing in the area. In fact, some pirates claim that the original goal of piracy was to protect the fishing industry from avaricious European and Asian fishermen. Realizing the enormous economic return, however, piracy soon became a thriving industry in and of itself.

As of September 2008, pirates have extracted approximately $18 million to $30 million dollars in ransom payments, according to the British think tank, Chatham House. They were expected to bring in about $50 million by the end of 2008; the largest annual pirate taking in Somali history. The increased sophistication in piracy tactics has enabled them to capture not only more ships, but more lucrative ones as well. Ransom demands are on the rise. In April 2005, for instance, a Hong Kong based company reportedly paid $315,000 for the release of the M/V Feisty Gas, a liquefied petroleum gas tanker. In contrast, MISC Berhad paid $2 million for the release of the M/V Bunga Melati 5, a Malaysian tanker in September 2008. These hefty ransom payments provide strong motivation for involvement in piracy, particularly in a poverty-ridden country whose traditional industries are deteriorating. Interestingly, the money brought in from piracy is still far less than $300 million in fish. Peter Lehr, a Somali piracy expert at the University of St. Andrews in Scotland, estimates that Asian and Europeans poach from Somali waters. This suggests that the reestablishment of a profitable fishing sector would provide a viable alternative to piracy.

The proliferation of piracy in Somalia has substantial international trade implications. Approximately 16,000 ships pass through the Gulf of Aden each year on their way to the Suez Canal in Egypt, transporting myriad Asian goods and oil from the Persian Gulf region to Europe and North America. The threat of piracy has exponentially increased the cost of travel along this route. Expectedly, ransom payments and lost travel time escalate costs on hijacked vessels. All ships, however, incur increased costs in the form of higher insurance premiums. War risk premiums must now be paid on ships traveling through the Gulf of Aden, which has increased premiums tenfold over the past year. If premiums continue to rise, companies may have to take longer, more costly routes to reach Europe and North America. One possible alternative is traveling around the Cape of Good Hope, a journey that takes several extra weeks of fuel consumption and travel time. These increased expenses translate into higher commodity price for a variety of goods, including oil. In a world already damaged by the recent surges in energy costs, continued price increases pose a serious threat to international commerce and development.

III – An Insight View

The issue of Somali piracy in the Red Sea and the Gulf of Aden has transformed from being a regional concern to an international dilemma. Over the past few months, news about Somali pirates hijacking military and trade ships have become increasingly frequent. Eventually, NATO, the United Nations, and major industrial countries intervened to solve this problem. So who are these pirates, what has led them to piracy, what do they want, who is behind them, and how do they operate?

The piracy phenomenon started with the collapse of the Somali government in 1991 when land lords and Militia gained control over the different regions of the country. However, the Militia governing system could not fill the void that was left by the absence of a centralized authority, hence civil war plagued the country. With chaos spreading across Somalia, its shores, the longest in Africa 330 Km and very rich in marine life, became vulnerable to foreign French, Spanish, Indian, Japanese, Korean, and other fishing ships to invade. Thus, in a matter of months the Somali coast was invaded by giant fishing ships.

The dismay of domestic fishermen and local coastal populations to such exploitation has led to an uprising from the younger populations whom seek to drive off the invading foreign ships. However, the highly corrupt land lords and militia leaders of the coastal regions struck a deal with the invading ships where they gave them licenses to continue exploiting Somalia's marine resources. In return, those Militia leaders were rewarded generously, thus condemning the local populations to unfair competition and poverty. In reaction, the revolting locals took matters into their own hands and declared war on the invading foreign ships.

In this retrospect, the pirates of Somalia were born. These young populations armed themselves and started hijacking the foreign invading fishing ships and later turned their attention towards the commercial ships that were passing by their shores. In 1998, the north-east region of Somalia, known as Bunt Land, resumed issuing licenses to fishing ships under conditions that were accepted by the locals. Thus, piracy diminished considerably but only until 2005 when the number of illegal foreign fishing ships reached 700 ships.

Moreover, not only did foreign ships take advantage of the political situation in Somalia, they went ahead to dump toxic wastes. This was reported by international news agencies, where European companies were dumping poisonous and toxic wastes in Somali waters. Also according to studies by UNEP in 1997, European countries such as Italy and Switzerland were getting rid of their waste products by dispatching it in Somalia.

After  cooperation between the local youth populations of the coastal region, militia members that went astray from their leadership, and technical workers that were once lawyers and linguists, a group consisting of three main  key parts was formed. That group would later emerge as the pirates of Somalia.

In Somali society, being a pirate is considered a prestigious profession. In fact, amongst the richest people in Somalia that enjoy the best of luxury are pirates. The immense amount of ransoms they receive from Europeans and other states insures their security and that of their families as well.  

However, the pirates do not have any political agendas that they want to insert. The only benefit they reap are the ransoms they receive but, on the political sphere, they seem to be without a purpose. In general, the pirates' actions are a reaction to the exploitation of Somalia, but some experts believe that the pirates are nothing but puppets for a greater beneficiary. On one hand, in an effort to identify the behind-the-scene culprit, Western media tried to link the piracy phenomenon to the resistance movement against the Ethiopian invading forces. On the other hand, Arab media was able to provide physical evidence linking Israel and the US to the pirates.

IV – Regional Impact And Security

Piracy is not only a threat to the security, economies, and stability of the different countries of the region. Countries such as Yemen, who controls the southern entrance of the Red Sea, and Egypt, who controls the northern entrance via the Suez canal, might be at the forefront of this dilemma,  even though Arab countries are the ones that could suffer the majority of loss. Since Arab oil coming from the Persian gulf must be transported to Europe and the US via the Suez canal, any disturbance in its routes could pose serious security and economic issues to the world.

The rise of piracy in 2008 , where more than 90 cases were reported, has severely impacted the security of the Red Sea being a strategic water passage. With the rise in risks of navigation in the region, many countries  began to use alternative routes such as the Cape of Good Hope, even though it is more costly to do so. The risks that are imposed by piracy are: the weakening of the economies that benefit from the Red Sea trade routes; the potential that the Red Sea region could transform into a battle field where other countries impose themselves politically and drug dealing could blossom under such chaotic circumstances; the transforming of the Red Sea into an international water passage, which would reap out the benefits of the benefiting regional countries; and finally fears that Israel and its allies would dominate the region under the banner of “war on terror” and reshape it as proposed by the “Greater Middle East” plan.

Yemen is one of the first countries to recognize the threat imposed by piracy. As early as 1977, it held a conference for all Arab countries to discuss the security of the Red Sea region. However, due to the global political situation at the time –the Cold War, and the Arab-Israeli War- the agenda was put aside and received little attention. Yemen, however, continued to press on the subjects, especially after the collapse of the Somali government and the political turmoil that took place in East Africa. Thus, with the rise in piracy by 2007, the already fragile Somali economy had suffered sever consequences.

As for Egypt, it has sustained direct repercussions as a result of piracy, which endangered Egyptian vessels and impacted negatively on shipping through the Suez Canal. Equally important, however, are the negative ramifications on Egypt's national security. Thus the whole situation requires swift actions on the part of Egypt so as to preserve its interests. Cairo could move in cooperation with other countries or international organizations with which it shares worries over the security of the region, or it could act unilaterally if collective action proves wasteful or unworthy.

Currently, safeguarding shipping through the Red Sea and nearby areas is an Egyptian top priority. Piracy could lead to the diminishing of revenue gained by Egyptian coffers off the Suez Canal, which make up one of the largest foreign currency income sources for Egypt. Revenues from the Suez Canal fell from $469.6 million in September to $467.5 million in October to $419.8 million in November. According to experts, revenues will dramatically decrease should the problem of piracy remain unresolved.

With the persistence of this problem, an international coalition of forces was formed to battle this crisis. This coalition of forces was led by the US, France, and other Western countries. The security council has passed a legislation that allowed for military presence of Western countries in Somali waters. The fear of turning the Red Sea into an international water passage has sparked alarms in the neighboring countries. It is widely thought that the United State's and EU's presence in Somalia is primarily to internationalize the southern entrance to the Red Sea and the gulf of Aden. The greater objective however, is sought to be internationalizing the Suez Canal. An action that threatens both Egypt's national security and that of the Arab world as well.   

V – Implications on Somalia

The consequences of piracy, are perhaps most apparent in Somalia itself. According to the CIA World Fact Book, Somalia receives approximately $236.4 million in economic aid. This aid is necessary to provide food and basic provisions for millions of impoverished Somalis. The World Food Programme (WFP) estimates that Somalia will require at least 185,000 tonnes of food in 2008. Danger in Somali waters, however, has forced the WFP to intermittently suspend shipments, putting Somalia's food stock in serious jeopardy. Without food and other basic necessities, it will be very difficult for Somalia to grow and build a viable economy. In this way, acts of piracy spawned, in part, by economic hardship in Somalia are further aggrandizing the problem. Somali economic growth is therefore contingent upon the successful control of piracy in the Gulf of Aden.

VI – Global Response

Unable to effectively combat piracy alone, the TGF has sought foreign help to control piracy in the Gulf of Aden. Given the dire economic and humanitarian consequences of continued piracy, the international community has responded with ships to serve as naval escorts and patrol the waters. France, Denmark, the Netherlands, and Canada, for instance, provided naval escorts from November 2007 to June 2008 to allow WFP ships to deliver food aid to Somalia. In September 2008, Russia joined international efforts, sending out their own independently operating warships. France has also played an effective role. Following the release of the MY Le Ponant, a French luxury yacht, on April 12, 2008, French soldiers tracked the fleeing pirates. They eventually disabled the car transporting the pirates and apprehended six of them, charging the pirates with theft, hostage-taking, and hijacking. Despite these various efforts, however, piracy persisted in the Gulf of Aden. Recognizing that more help was necessary, the TGF besought international assistance to combat robbery and piracy off the coast of Somalia in a letter to the President of the Council. In response, the UN  responded by passing resolution 1838 to fight piracy off the coast of Somalia through the use of naval vessels and military aircrafts.   

Although international military presence is integral to immediate Somali maritime security, long-term resolution of piracy hinges on the creation and maintenance of economic stability in Somalia. A strong, centralized Somali government backed by a reliable police force is perhaps one of the most powerful tools in combating long-term piracy in Somalia. This will enable Somalia to enforce its maritime rights and begin to rebuild damaged industries such as fishing, among other commercial advances. As long as dire economic conditions persists, however, the vast rewards of piracy will remain in existence.


Mohamed Amin Mohamed Al-Hadi, “Piracy, an insight view”, Al-Jazeera Research Center

Mohamed Sherif Mahmoud, “The implications of piracy on Somalia”, Al-Jazeera Research Center

Samir Al-Abdali, “Somali piracy in the Red Sea”, Al-Jazeera Research Center

Charles Onyango-Obbo, “Want to Stop Piracy? Then Give Mogadishu Back to the Mullahs”, The East Africa, 2008

“Somali Pirates Challenge Superpowers”, MSNBC, 2008

“Reports On Acts Of Piracy And Armed Robbery Against Ships”, International Maritime Organization, 08/27/2008

“Weekly Piracy Report”, International Chamber of Commerce Crime services, 10/7-13/2008

CIA World Fact Book

“Somalia And the Pirates”, Chicago Tribune, 10/11/2008

Roger Middleton, “Piracy in Somalia Threatening Global Trade, Feeding Local Wars”, Chatham House, 10/2008

Khan, Sana Aftab, “Tackling Piracy in Somali Waters: Rising Attacks impede delivery of humanitarian assistance”, UN Chronicle, United Nations Department of Public Information, Outreach division

2004 vs. 2007 global piracy summary, the Economist

“Piracy in waters off the coast of Somalia”, International Maritime Organization

Westcott Kathryn, “Somalia's pirates face battles at sea”, BBC News, 05/02/2008

Content Of Volume 1, Issue 1
1. Pirates of Somalia
2.The Failing Economy of Zimbabwe