The problem of Somali piracy is obviously wreaking havoc, not least for Kenya’s sea trade. Insurance premiums for goods coming into Kenya have gone up, so piracy is increasing the cost of trade – but if you look at it from a different angle, you can also see that Kenya is also benefitting rather nicely too from the highjacking of ships thank you very much. In some sectors of the Kenyan economy, I would even venture to say that the blow of the global economic crisis is miraculously being softened by piracy.
I have heard that pirates’ powerful outboard motors are sourced in Kenya. Plus Kenyan security companies are being asked to handle the ‘cash in transit’ facilitating the deliver of ransom money to the hoodlums, in return for a generous percentage of the millions. Afterwards, the pirates' ill gotten gains are being funnelled through the Kenyan economy as Somalis invest in properties here in an attempt to launder their money and for want of investment opportunities in Somalia.
Listening to BBC world service on the radio yesterday I hit upon an interesting report. A Dutch shipping line representative was talking openly about paying a ransom to pirates in return for his ship and crew. There were recorded discussions between a pirate negotiator, the shipping agent and also the security company who were hired to deliver the money. The process took some 60 days of negotiation.
Few (if any?) other shipping organisations have been willing to admit to the payment of a ransom in return for their ships. However, the Dutchman explained that he was speaking out because he felt that the pirates are more organised than the shipping industry and it was time for a change.
He said that in spite of differences between various gangs; the pirates do get together, forming a sort of council. They discuss where there might be common problems within their illegal trade and they also discuss strategy, which makes them a powerful force to tackle. Apparently ship owners have not come together like this and there is a distinct lack of dialogue going on. Each time a higher ransom is paid for one ship; it raises the bar for all the others. The failure to open lines of communication in the legitimate sea trade means that the pirates are laughing all the way to the bank.
And the bank, it seems, is situated in Kenya. Somali pirates are choosing to invest their money in Kenya due to the fact that the economy here is relatively strong. The Eastleigh area of Nairobi has long been known as ‘Little Mogadishu’ as it is full of Somalis who have chosen to settle in Kenya. Now money is pouring in through this community and wealthy pirates are known to be buying shopping centres, hotels and apartment blocks here. An interesting newspaper article about one such newly rich, retired pirate who now lives in Nairobi can be found by clicking on the link below:
http://seattletimes.nwsource.com/html/nationworld/2009256835_pirate24.html?syndication=rssSo while the whole world collectively frowns on piracy, it may be worth Kenya keeping its head down and mouth shut. Having millions of used American dollars filtering into the economy here is no bad thing - in fact it's good for business, especially while the rest of the world struggles desperately to keep its head above water. I would guess that some businesses in Kenya are very much, but very privately, pro piracy and hoping that long may it continue! I even saw a matatu with the word 'PIRATES' emblazoned over its windscreen.
