The Advantage of Piracy

No Deterrent Effect

Both documents - the discussion paper just published by the German Institute for Economic Research; (DIW) and the study by the German Institute for International and Security Affairs (SWP) - clearly suggest that naval deployment off the Horn of Africa cannot thwart piracy. "The threat remains unchanged" writes SWP: "In spite of the massive naval presence (…) merchant ships are regularly being attacked and hijacked."[1] The DIW also explains that the military deployment off the African coast has no "significant deterrent effect" [2]: "Since the beginning of the military operations, the number of pirate attacks has nearly doubled." From 47 in 2005, the number rose to 119 in 2008 and to 217 in 2009. "Even if the Gulf of Aden was successfully secured,"[3] DIW writes, "this would be likely to result in increased substitution to open seas piracy." Operating a complete naval shield is impossible: "There is a clear limit to what a sea-based solution can hope to achieve."

An Attractive Business

Piracy stems from the economic conditions in Somalia, according to DIW. "International pirate fishing and organized toxic waste disposal off the Somali coast has deprived the population of the coastal regions of their livelihood" [4], says the author of the paper: "In a country with a per capita income of less than 300 dollars per year, piracy is an attractive business for unemployed young men."[5] In the case of success, the estimated profit pro pirate "for each hijacking lies between 10,000 and 15,000 US dollars." As in every business branch, one part of the profit is reinvested - for example in outboard motors, better telecommunications, automatic weapons and anti-tank missiles. However, the Somali pirates have no infrastructure to take possession of the freight; this limits their business opportunities for the most part to hijacking and ransom.

Piracy Profiteers

As the DIW author explains, piracy "is not only a lucrative business for Somalis." Thanks to piracy that is drastically increasing insurance fees; naval insurance companies make "good profits." This is why "they do not demand that ship owners take security precautions that would make hijackings more difficult." According to the DIW author, "you cannot expect insurance companies to saw off the branch that is nourishing this insurance market."[6] She feels that also on other levels, the profit motive of western companies is favoring piracy. For example, shipping companies do not comply with the navy's guidelines destined to prevent pirate attacks, because they want to save costs. Because of their low salaries and bad working contracts, ships' crews are unlikely to risk their lives to repel or at least hamper the pirates. The influential German arms industry is also profiting from piracy. One should keep in mind that - not counting military expenditures - "from the costs caused by piracy, only 20% go to Somalia." "The rest remain inside our own economic circuit."

The Coastguard

SWP and DIW are convinced that piracy can only be thwarted through a land-based approach. While SWP is pleading for strengthening the state structures in Somalia, the author of the DIW paper is supporting the establishment of local security systems.[7] An agreement "on the establishment of an effective Somali coast guard should be reached with local elites." This would provide an income for young men, who otherwise could become pirates. This plan could be effective, because the coastguard would also "protect Somali fishing rights vis-à-vis the international fishing fleets, thereby reducing the legitimacy of piracy in the eyes of the Somali population." Piracy has grown substantially in Somalia, because foreign (also western) fishing fleets have illegally entered Somali waters, robbing local fishermen of their livelihood. The West however should be financing the establishment of the coast guard, notes the DIW. But this has been prevented through Berlin's resistance - according to the DIW - which would rather maintain a delicate balance between the pirates and the military.[8]

Hidden Agenda

The fact that the West is continuing to finance the expensive naval deployment off the Horn of Africa, in spite of its minimal success, always brings to mind that there could be a hidden agenda, writes SWP in its recent study, presuming that "the real purpose of the military deployment in the Gulf of Aden" could be the question of "who will control the Indian Ocean."[9] "At a time, when the competition for the increasingly scarce resources is having a growing influence on inter-state relations, this motive cannot be excluded," says the SWP. This had already been suggested last fall by the former head of the defense ministry's policy and planning staff. According to retired Vice Admiral Ulrich Weisser, the Indian Ocean holds "the key to the world's seas, particularly the sea routes to the Pacific," and is particularly "decisive for the future power constellations in Asia, above all between India and China." The "maritime rivalry" between those two countries "is beginning to be more in the forefront."[10] Thanks to the war on pirates, the EU and NATO naval forces are establishing their presence in the western Indian Ocean - from the German point of view, a geo-strategic advantage of piracy.

[1] Stefan Mair (Hg.): Piraterie und maritime Sicherheit; SWP-Studie S18, Juli 2010
[2] Piraten lassen sich nicht abschrecken; Pressemitteilung des Deutschen Instituts für Wirtschaftsforschung vom 21.07.2010
[3] Anja Shortland: Piraterie in Somalia: Ein gutes Geschäft für Viele; DIW Wochenbericht 29/2010, 21.07.2010
[4] "Piraterie ist nicht nur für die Somalier ein gutes Geschäft"; DIW Wochenbericht 29/2010, 21.07.2010
[5] Anja Shortland: Piraterie in Somalia: Ein gutes Geschäft für Viele; DIW Wochenbericht 29/2010, 21.07.2010
[6] "Piraterie ist nicht nur für die Somalier ein gutes Geschäft"; DIW Wochenbericht 29/2010, 21.07.2010
[7] Anja Shortland: Piraterie in Somalia: Ein gutes Geschäft für Viele; DIW Wochenbericht 29/2010, 21.07.2010
[8] Sarah Percy, Anja Shortland: The Business of Piracy in Somalia; DIW Discussion Papers 1033 July 2010
[9] Stefan Mair (Hg.): Piraterie und maritime Sicherheit; SWP-Studie S18, Juli 2010
[10] Ulrich Weisser: Fregatten statt Panzer; Süddeutsche Zeitung 17.11.2009. See also Key Maritime Region