A FINANCIAL REPORT ON THE PIRACY BUSINESS. I posted here in 2011 on the recent successes in the piracy business, including the fact that the pirate stock exchange which had opened in 2009 in Harardheere, Somalia had listings for over 70 entities. Here is an article in the Economist (November 2) about the financing of Somalian pirates. The accompanying bar chart shows that the total ransoms paid declined sharply from 2011 to 2012, although the average ransom payment in 2012 of about $4 million was higher than for any year but 2011.

The average pirate gets for $30,000 to $75,000, with bonuses for the first man to board a ship and for a pirate who brings his own weapon. Part of the ransom money goes to the businesses that provide services to the pirates, including cooks, pimps, lawyers, and the militias that control ports. Simple expeditions can cost only a few hundred dollars and can be financed by the pirates themselves. Expeditions involving several vessels can cost $30,000; the financiers for these can get between 30% and 70% of the ransom.

This entry was posted in Economics. Bookmark the permalink.

Leave a Reply

Your email address will not be published.