Sunday, 23 November 2008

Somali Pirates and Investment Bankers of the world

Apart from the global economic turmoil, obama and falling oil prices another thing that has been keeping us entertained is the news about piracy. Somali pirates have been very active these days when the world was betting on which bank would fall n and what would be the margin of obama's victory (except for McCain from his family inclusive of his wife). The big news has been the Sirius Star of Saudi arabia with its 110Million $ oil cargo.
Piracy is not a new phenomenon and could been around from the days after humans learnt how to build boats and sail around from the days of phoenicians and may be before them, the more interesting thing is the fact that current form of piracy i
s becoming completely uncontrolled and the Horn of Africa or the Gulf of Aden is completely ridden with them and is driving people really crazy.
The Somali piracy is should be understood along with the recent history of somalia, Somalia has been in chaos ever since 1991 and it is unregulated majorly (though with a presense of a government, president etc) and is governed by various warlords. This lawlessness has opened up the vast coasts of the somalia. This fish-fertile coast was abused by everybody and some entrepreneurial somali saw this as an opportunity and started collecting a small some of fees (protection fee may be) from these foreign ships and today it has fully developed industry to the extent that pirates are about to hijack a ship which is 400 miles away from the coast with the sophistications of GPS etc. While the risk of losing the cargo drives the owners dizzy, they usually tend to negotiate and to get the ships back (17 ships are still with them) which further boosts the pirates morale.
Pirates seems to be very calculative and methodical, they wait for the right catch and take significant risk to conquer, retain and make the money through negotiations and release the ship after the ransom is obtained.
Strangely , I couldnt resist drawing the parallels with the economic crises, the investment bankers (who made money creating complex financial deals on the underlying financial instruments) played the roles of sophisticated pirates and took daring risks and reaped the bounty in bonuses, but should we blame the pirates or the conditions that breed piracy for this. I
t is eitherway and in a country like Somalia where there are not much opportunities and lawlessness is the only law, piracy gets justified morally (atleast for the bribed port authorities and pirates) and 
lack of regulation simply flames it up. Likewise when the market was unable to control the daring acts of the economic pirates and they took the whole economy down.
Hopefully international cooperation controls piracy and co-ordinated global action control the freefall, else the days of people queuing up for the free soups are not far from reality and may be Pirates would get really rich by then and could be contributing to IMF( it has been asking money from everyone)