Somali Pirate Stock Exchange

[Sheilbh]

Somali sea gangs lure investors at pirate lair
Tue Dec 1, 2009 6:22am EST

* Pirate "stock exchange" in Haradheere

* Founder says 72 "maritime companies" listed

* Local community benefits from ransoms

By Mohamed Ahmed

HARADHEERE, Somalia, Dec 1 (Reuters) - In Somalia's main pirate lair of Haradheere, the sea gangs have set up a cooperative to fund their hijackings offshore, a sort of stock exchange meets criminal syndicate.

Heavily armed pirates from the lawless Horn of Africa nation have terrorised shipping lanes in the Indian Ocean and strategic Gulf of Aden, which links Europe to Asia through the Red Sea.

The gangs have made tens of millions of dollars from ransoms and a deployment by foreign navies in the area has only appeared to drive the attackers to hunt further from shore.

It is a lucrative business that has drawn financiers from the Somali diaspora and other nations -- and now the gangs in Haradheere have set up an exchange to manage their investments.

One wealthy former pirate named Mohammed took Reuters around the small facility and said it had proved to be an important way for the pirates to win support from the local community for their operations, despite the dangers involved.

"Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 'maritime companies' and now we are hosting 72. Ten of them have so far been successful at hijacking," Mohammed said.

"The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials ... we've made piracy a community activity."

Haradheere, 400 km (250 miles) northeast of Mogadishu, used to be a small fishing village. Now it is a bustling town where luxury 4x4 cars owned by the pirates and those who bankroll them create honking traffic jams along its pot-holed, dusty streets.

Somalia's Western-backed government of President Sheikh Sharif Ahmed is pinned down battling hardline Islamist rebels, and controls little more than a few streets of the capital.

The administration has no influence in Haradheere -- where a senior local official said piracy paid for almost everything.

"Piracy-related business has become the main profitable economic activity in our area and as locals we depend on their output," said Mohamed Adam, the town's deputy security officer.

"The district gets a percentage of every ransom from ships that have been released, and that goes on public infrastructure, including our hospital and our public schools."



RISK VS REWARDS

In a drought-ravaged country that provides almost no employment opportunities for fit young men, many are been drawn to the allure of the riches they see being earned at sea.

Abdirahman Ali was a secondary school student in Mogadishu until three months ago when his family fled the fighting there.

Given the choice of moving with his parents to Lego, their ancestral home in Middle Shabelle where strict Islamist rebels have banned most entertainment including watching sport, or joining the pirates, he opted to head for Haradheere.

Now he guards a Thai fishing boat held just offshore.

"First I decided to leave the country and migrate, but then I remembered my late colleagues who died at sea while trying to migrate to Italy," he told Reuters. "So I chose this option, instead of dying in the desert or from mortars in Mogadishu."

Haradheere's "stock exchange" is open 24 hours a day and serves as a bustling focal point for the town. As well as investors, sobbing wives and mothers often turn up there seeking news of male relatives missing in action.

Every week, Mohammed said, gang members and equipment were lost to the sea. But he said the pirates were not deterred.

"Ransoms have even increased in recent months from between $2-3 million to $4 million because of the increased number of shareholders and the risks," he said.

"Let the anti-piracy navies continue their search for us. We have no worries because our motto for the job is 'do or die'."

Piracy investor Sahra Ibrahim, a 22-year-old divorcee, was lined up with others waiting for her cut of a ransom pay-out after one of the gangs freed a Spanish tuna fishing vessel.

"I am waiting for my share after I contributed a rocket-propelled grenade for the operation," she said, adding that she got the weapon from her ex-husband in alimony.

"I am really happy and lucky. I have made $75,000 in only 38 days since I joined the 'company'."

(Writing by Daniel Wallis; Editing by Jon Boyle) ((Email: [email protected]; tel: +254 20 222 4717))

[Ed Anger]

The US should invest in it. 100 shares of cluster bombs and 50 shares of AC-130 gunships.

[Admiral Yi]

Piracy investor Sahra Ibrahim, a 22-year-old divorcee, was lined up with others waiting for her cut of a ransom pay-out after one of the gangs freed a Spanish tuna fishing vessel.

"I am waiting for my share after I contributed a rocket-propelled grenade for the operation," she said, adding that she got the weapon from her ex-husband in alimony.

[Ed Anger]

Seriously, they need to be liquidated.

[Josephus]

Hey...you guys can't begrudge their capitalist spirit. 

[Malthus]

Better pay-off than the normal stock market in recent years, most likely.

[The Brain]

One wealthy former pirate named Mohammed took Reuters around the small facility

Again, I find it weird that they give their identities so readily.

[DGuller]

This presents good hedging opportunities for the shipping companies.  In fact, it would probably be much more efficient for the Western governments to just buy up all the shares on the exchange, rather than deploy their navies.  They would pay the ransoms with the right hand and collect pirate stock returns with the left hand.  Of course, that wouldn't work if Somali legal system fails to provide adequate investor protection measures.

[Sheilbh]

Hey...you guys can't begrudge their capitalist spirit. 

In the UK the name the pirates have adopted al-Shabab has been roughly translated as 'the lads' and I saw an interview with one where he said he only wanted to be a pirate for a few years until he had enough money to buy a big house with a swimming pool, get married, get a 4x4 and enough guns to protect it all

[KRonn]

Seriously, they need to be liquidated.

Yeah, this is really getting rather lame. I won't be surprised at all when troops of the US and other nations make some surprise landings in known pirate hideouts and villages.

[Ed Anger]

I don't know where we would get the giant blender to liquidfy them however.

[Josephus]

Seriously, they need to be liquidated.

Yeah, this is really getting rather lame. I won't be surprised at all when troops of the US and other nations make some surprise landings in known pirate hideouts and villages.

Trouble is US troops and other nations are currently busy.

[Admiral Yi]

Better pay-off than the normal stock market in recent years, most likely.

75 grand return on an RPG is like a million percent in 36 days, so yeah.

[KRonn]

Seriously, they need to be liquidated.

Yeah, this is really getting rather lame. I won't be surprised at all when troops of the US and other nations make some surprise landings in known pirate hideouts and villages.

Trouble is US troops and other nations are currently busy.

I speculate if a few amphibious battalions of marines and special forces can't go in, raise mayhem with the pirate infrastructure for a while, take or sink pirate boats, free captured ships, then mainly leave. Not necessarily an occupation needed, I wouldn't think. Not going in to nation build. However, such actions would pose threats to the current hostages though, and that's a big consideration.