Thursday, July 30, 2009

Looking at the Somali pirate business model

With summer slowing me down, I've been running late in posting some recent news and links of note. Some may have seen Wired Magazine's "Cutthroat Capitalism: the Game", which can be played by clicking here. After you finish trying your hand at it, check out two recent pieces by Scott Carney at that I highly recommend:

There's an interview he did with a Somali pirate in Eyl, the uncut version of which can be seen here. Ignore the pap about the Somalis being defenders of the coast - "protectors" in this pirate's mind - and note, instead, the degree of pre-incident intelligence being alluded to and the logistical organization being used in their operations. According to this unnamed pirate, the requirement of a single man being the first to board, in order to throw down a rope or ladder for the rest of the boarding team, reveals a potential weakness in their attack strategy. Those few moments when the first man is aboard are crucial for the attackers, and the defenders. And as for the issue of arming mariners, there's a somewhat chilling comment from the pirate Carney spoke to: "The key to our success is that we are willing to die, and the crews are not."

Carney also wrote a much larger piece two weeks back (see it here) that puts forth a number of formulae to analyse the economics of the Somali pirate business model. To do this, he looks at the case of the Stolt Valor, seized by Somali pirates last September and released after 62 days and the payment of a $2.5 million ransom. From speaking with various individuals involved and other observers, Carney has come up with a series of tables, such as "Shipper's Math: Why Sail Through Somali Waters?", or "Pirate's Math: When To Attack". He also looks at the weaponry available to attackers and defenders, who profits, what the risk levels are to overall shipping and other details, all presented in a manner that is graphically illuminating.

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