Tuesday, December 2, 2008

PW's Pirate Redux

Well, if we’re going to seriously engage in this pirate business, then 1) I have some thoughts, and 2) it’s time to administer a good old-fashioned TPBP smackdown to PW, who while possessing a generally superior intellect, is off the mark on this one.

He starts out on the right track by attempting to point out the economic contexts of the situation. I remember reading recently (I can’t find the source, so take it with the requisite grain of salt) that piracy generated Somalia’s largest influx of hard currency, ringing in at over $100 million in the last year (a shockingly small amount for the largest sector of a 7 million person economy).

But then we get to this:
Certainly, there is something to the observation that much of Africa should be better integrated into the global economy on terms that actually generate wealth for more people who live there. But that doesn't really fly in Somalia.
I think that it would fly. It would take a large investment, but not impossibly large. Move in 10K troops for peacekeeping purposes, and dump $1 billion a month for infrastructure spending. I should point out that I have no idea what I’m talking about in terms of aid expenditure, distribution, etc. -- which is an admittedly poor start, but I have a hard time believing that some small fraction of our Iraqi expenditure, used even semi-productively, wouldn't make a real difference in economic terms.

Minus some kind of real government/economic security improvement you can count on these attacks continuing, if not escalating. But, when PW posits --
What kind of weapon systems could you fit to a tanker for half the cost of the 20mil USD you'd have to pay for a ransom?
--he's sidestepping a problem of scale.

Arming any one ship would be quite expensive, arming an entire fleet even more so, and arming all cumulative fleets that travel in Somali territorial waters would be impossibly expensive. There’s a reason this option hasn’t really been discussed, and all of these companies are instead clamoring for government military escorts. It’s deceptively intuitive to see a scenario that morphs into an acquadic version of the last half hour of Fast and the Furious (a la truckers with shotguns), but it’s not going to happen. PW is making an economic argument: raise the cost of piracy to the point that the pirates will no longer wish to engage in it. Though it’s not inconceivable that the costs of piracy become high enough to prevent it, that evolution is somewhat at odds with Somalia’s overall economic and political reality.

I’m not advocating the following tactic so much as opening the floor for discussion, but perhaps these pirate groups (or at least the most powerful among them) should be engaged in negotiations to open Somalia’s costal shipping lanes. This would neutralize the threat, prevent PW’s (ultimately inefficient and expensive) armed conflict and allow us to open up lines of communication with a group (the pirates) with whom we probably have more in common than the Islamic Courts Union folks that are ostensibly in charge of the country.

This piracy business is a pain in everyone’s ass, but more importantly it’s an increasingly costly pain in everyone’s ass. The only way PW’s solution works for any meaningful length of time is the permanent and significant arming of all commercial shipping operations (lest they get lax and the piracy resumes). If you could just pay the pirates some percentage less than the total cost of said arming (hopefully a tiny fraction of the total cost) everyone would be better off. It’s probably not the solution, but worth thinking about at any rate.

4 comments:

PW said...

I'm honored to be the recipient of the first TPBP smackdown!

I may disagree, but I respect your argument with regard to foreign aid in Somalia. Although it didn't work out so well back in the early '90's.

However, the idea that cost would make weapons unworkable doesn't really fly. I was unclear about the real costs- it would be far less than 10m usd to arm a ship, and you could set up a security pilot service to reduce costs, airlifting weapons and operators from ship to ship as they moved past the horn of Africa.

Look! http://www.gunbroker.com/Auction/ViewItem.asp?Item=117123642

38k for a water-cooled machine gun. 4 of these would go a long way toward securing a tanker, for 152k. Peanuts compared to the overall cost of insuring such a vessel, easily bolted to the gunwale, easily moved from ship to ship in a helicopter. And, you aren't paying off criminals not to steal your boat :)

Anonymous said...

Neither shelling out billions to drag Somalia out of its rut nor investing billions to secure the Straits of Malacca makes any sense.

Total losses from piracy are still small compared to the overall value of shipping even in the straights, let alone the world.

The most cost-effective way to deal with piracy is to do nothing.

Unknown said...

What seems to be getting overlooked is the social engineering aspect of piracy. If we could just get pirates to wear a patch on their eye and post a skull flag, shippers would know where to aim their high power 50 caliber ship wreaking machine. Instead, pirates pose as coast guards, tourists in distress, and other friendlies. They have control before the crew realizes that a boat smashing machine should have been loaded.

So my question is why part of the solution isn't simply to have a callback number for legit organizations. If an approacher appears to be coast guard, make it protocol for the cost guard to keep a defined distance, until the captain calls a known good phone number with a satellite phone to validate the encounter in advance.

Set it up so the only role left is for the pirates to play is lost canoers in need of insulin.

Unknown said...

Moreover, why not have a single hotline? One phone number could be staffed on behalf of all potential authorities. The call could then be routed based on the location of the tanker, and the realtime positions being reported by all legitimate vessels. If the hotline can't assign the call, the crew knows they can treat the approacher as an adversary.