Profiting from Piracy: Somalia’s New Stock Exchange

The lawless town of Haradheere, Somalia, used to be a small fishing village, but now it’s in the pirate business—and business is booming.

Despite heightened attempts to keep the pirates at bay, they still have been able to successfully plunder the shipping lanes around the Horn of Africa and the Indian Ocean.

So how have the pirates been able skirt the law? They’ve actually had some help from “investors.”

Pirates of lore were notorious for burying their treasure. But in the 21st century, they’ve adopted a new business model.

Reuters reports that the pirates have established a “stock exchange” with Somali civilians which allows the landlubbers to get a cut of the booty if they invest money or weapons to help the pirates pull off their hijackings.

A former pirate took Reuters around the bustling pirate haven and explained how the locals have come to depend on piracy, which is the town’s most stable and profitable economic output.

Learn how the pirates operate on the high seas with Pirates of the Indian Ocean: A Military Analysis from NBC Correspondent Colonel Jack Jacobs

The Western-backed government of Somalia has no presence in Haradheere. The pirates’ extravagant luxury automobiles contrast garishly with the town’s dusty and pothole filled streets. With few other opportunities available, it’s easy to see why civilians would want to get in on the action.

Reuters spoke with a 22-year-old woman who has parlayed her assets into $75,000 in just 38 days since joining their enterprise. She’s now anxiously awaiting the returns of her most recent investment—a rocket-propelled grenade.

In addition to paying back investors, pirates have curried favor with the locals by setting aside a percentage of their ransom funds for projects that benefit the community, like hospitals and public schools.

But these pirates are far from lovable rascals or modern day Robin Hoods—they’re brutal terrorists. The growing acceptance of their seductive pirate lifestyle has forced the U.S. and other countries to up the ante and use naval warships and aerial drones to protect their vessels.

With higher stakes and investors to protect, the pirates have had to become more ruthless and demand higher ransoms. Without an effective Somali Navy, Coast Guard or government to stand up to them, that’s the way it will likely continue.

Source:petergreenberg.com/