Somali Pirates: a 1.3 billion dollar industry you never knew about
Well, we can’t say if the people of Somalia were inspired by the awe-inspiring performance of Johnny Depp as Jack Sparrow, or if it was Johnny Depp who looked at Somalia for inspiration to play the iconic silver screen character. But one thing is for sure: both their stories are interesting.
Somalia’s civil war has destroyed the country’s economy beyond comprehension. The GDP of the country is $104. Yes, just that; no million or billion, just that. Little wonder it comes in last for GDP when ranked by country.
With no structured means of income, it has carved its own now, which is very interesting and dramatic at the same time.
The pirate industry of the country is valued at over 1.3Billion USD, which is surprisingly very structured and well managed. It even has its own stock market. Each of their heists is very well organized. Each operation requires an upfront cost of around $30k, which is provided by the investors, who later on receive a 30% share of the heist.
Then the pirates start to chase their target ship, which they eventually overpower completely. The pirates don’t only go for the cargo, because they know that living beings are more valued than goods. So, they kidnap the crew and start negotiating their terms. This negotiation can go on for up to 300 days, but in the end the pirates always win because they hold strong cards and later on get paid approx. $2.7 million USD on an average basis.
Necessity is often the mother of invention, and the Somalians have certainly come up with an inventive way to keep the economy afloat. Think about that next time you cruise the high seas.