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Pirates' Toll: Shipping in the Wake of Somalia





Cutlasses, new money, strongholds, business models: it's difficult to resist, and likely unavoidable, this temptation to explain Somalia's pirates in the language of the rich-nation business world. It's a shorthand that allows us to convert the exotic and dimly understood into something familiar, to regain control.

And it is true: the pirate gangs of the Somali coast seen here in one of their craft have indeed developed a venture that has brought more money to these places than perhaps ever before. Somalia, after all, is arguably the world's most notorious failed state -- no central government, feuding clans, warlords, Black Hawk Down, Islamist insurrections, terrorist influxes, drought, refugee crises from nearby genocides -- all that is dysfunctional and tragic about Africa seems to be contained in our idea of Somalia. The people who live there are viewed now as the world's most trenchant have-nots.

The men in control of the country's pirate bands have, in a sense, with one of the world's busiest shipping lanes right off the beach, lit upon perhaps the most lucrative money-making scheme available to them. They've figured out a way to participate in a global economy from which they are excluded. Failed-state entrepreneurs, they are hijacking ships and disrupting world trade by taking -- literally, figuratively -- a toll on it.

This is the first part of a four-part series on the rise of hijack-and-ransom piracy off the coast of Somalia, and the costs it poses to the merchant shipping industry and, perhaps, global trade as a whole. Click here to read Part 2 of Pirates' Toll: Shipping in the Wake of Somalia.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.
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