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
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV