There are increasing pressures to develop land-based approaches to Somali piracy. By making use of non-traditional data sources including local market data and satellite images, this paper is intended to be an objective analysis of who benefits from pirate ransoms.
Significant amounts of ransom monies are spent within Somalia, but conspicuous consumption appears to be limited by social norms dictating resource-sharing. Around a third of pirate ransoms are converted into Somali shillings, benefiting casual labour and pastoralists in Puntland.
Data analysis is complemented by examination of satellite imagery to establish where the beneficiaries are located. Pirates probably make a significant contribution to economic development in the provincial capitals Garowe and Bosasso. Puntland's political elites are therefore unlikely to move decisively against piracy.
The positive economic impacts of piracy are spread widely and a military strategy to eradicate it could seriously undermine local development. However, coastal villages have gained little from hosting pirates and may be open to a negotiated solution which offers a more attractive alternative.
There is widespread agreement in the academic and naval communities that Somali piracy needs a land-based solution. Several years of naval counter-piracy missions have "failed to strategically deter piracy".Pirates have simply shifted their attacks to ships that have not adopted best management practice, and operate in the open sea to evade counter-piracy measures in the Gulf of Aden.Since mid-2010, the nature of piracy off the coast of Somalia has changed.Pirates and navies have become considerably more violent. Because of the increased difficulty of hijacking ships in waters monitored by warships from over thirty nations, pirates invest more resources in maximizing the return from each captured ship.
Ransom negotiations now drag on for longer and result in record payments. Moreover, there are as yet unproven assertions that al-Shabaab is offering attractive cooperative agreements to pirates, meaning that piracy could at some stage fund regional instability and terror. There are therefore strong incentives to try a fresh approach to resolving the issue of piracy off the
Horn of Africa. A land-based solution might involve replacing piracy as a source of income to relevant local communities. However, it is unclear where the beneficiaries from piracy are located, whether revenue from pirate activity is mostly channelled abroad or used domestically and how
widely the benefits are spread. Owing to the absence of central government, conventional data on economic activity in Somalia have been lacking since 1989.
This paper seeks to understand the on-land impacts of piracy, in order to assist those seeking to find on-land solutions. The paper proposes and evaluates a number of alternative indicators for economic activity in Somalia. First, data collected by internationally funded NGOs monitoring
commodity prices show that a significant proportion of pirate ransoms are converted into Somali shillings; that cattle prices have risen with the development of the pirate industry; and that piracy is not driving food price inflation but on the contrary has offset the loss of purchasing power of local
wages after the 2007/08 food price shocks.
Secondly, satellite imagery shows that none of the pirate towns on the Puntland coast have enough power output to feature on global nightlight images. This indicates that coastal communities have not greatly benefited from piracy. Instead the regional centres of Garowe and Bosasso, which
provide the material inputs and the fire-power of the pirate operations, appear to benefit from piracy-related investment.
Thirdly, analysis of changes in the built environment based on high-resolution satellite images corroborates these results. Garowe has seen massive investment between 2002 and 2009, much of the development being concurrent with the explosion of pirate ransoms. The 'pirate capitals' Eyl and Hobyo, however, have seen little investment. While each of the data sources has significant weaknesses, a consistent story emerges regarding
the impact of ransom money on the Somali economy. Piracy appears to lead to widespread economic development and therefore has a large interest group behind its continuation.
However, most beneficiaries are located in the provincial capitals. Puntland's coastal communities could easily be made considerably better off through activities other than hosting pirates. The international community should bear these results in mind when developing land-based strategies to resolve Somalia's pirate problem.
Dr Anja Shortland
Senior Lecturer at Brunel University
The text above is an abstract from Dr Anja's study "Treasure Mapped: Using Satellite Imagery to Track the Developmental Effects of Somali Piracy".For more information, click here.
Also, click here to read another interesting study of Dr Anja regarding piracy, titled ''Robin Hook: The Developmental Effects of Somali Piracy''