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Saturday, December 12, 2009
consolidation in the piracy business
Consolidation is a natural law of business. Over time, some competitors get bigger and dominate smaller ones. Market share creates more market share. Over time, "mature" industries tend to be dominated by a few very big players.

We saw this in organized crime in the 1940s and '50s: lots of scattered gangs stopped fighting each other, banded together into larger "families," divided territory and prospered, to the point they created an international gambling haven [Las Vegas] and dominated industries like waste hauling and trucking.

Why should piracy be different?

We're already seeing pirates move to the open ocean, take over large, high value cargo like oil and weapons, and create banking and communications systems to meet their needs. Pirates - at least those working off the coast of Africa - are creating a "rational" environment in which to do business.

What are the conditions that make this possible?

First, Somali pirates - responsible for half the piracy in the world - have a common culture and historic experience. This is akin to the Jewish or Sicilian heritage shared by organized crime figures in the mid-20th century. But forget crime. Anyone who's tried merging two companies or two families understands how helpful - though intangible - a shared culture can be.

Second, these pirates face a common enemy: Atalanta, the combat fleet organized by NATO and the EU. As we mentioned in yesterday's post, this fleet is winning the battle for the Gulf of Aden, and so Somali pirates are moving farther out to sea, toward India. This "scaling up" requires bigger and better equipment and more people. Both needs can be met by some kind of partnership.

So if this "rationalization" of the pirate "business" is taking place, what are the implications? I'll speculate, not too wildly, next time.
Posted by ken miller at 9:54 AM 0 comments
Labels: piracy, pirates
Friday, December 11, 2009
pirates going 1,000 miles - 1,600 KM - off shore
The EU may broaden its year-old effort to fight pirates off the Horn of Africa, reports London-based Gregory Viscusi on Bloomberg.com. The fleet of 25 warships has cut piracy in the Gulf of Aden in half compared with last year; but pirates have adjusted by moving farther into the Indian Ocean - and closer to India.


By using converted fishing trawlers and other large craft as "mother ships," the pirates can travel the same sea lanes as the biggest freighters, launching small, agile vessels when it's time to attack.


The Indian Ocean presents different - and in some ways bigger - challenges than the Gulf of Aden. Without more resources, the EU may have to reduce its successful efforts in the Gulf, and risk a kind of shell game, with the pirates moving back and forth to waters less patrolled.

[This would be a problem in itself. But it could also encourage greater coordination among the pirates. More on this soon.]


Viscusi writes the EU operation - with strong U.S. involvement - costs more than $700 million annually. That's a lot of money; but it's a small part of the estimated $20 billion impact of piracy world-wide.


For Viscusi's complete piece: bloomberg.com/apps/news?pid=20601116&sid=al9fxUIib3RM
Posted by ken miller at 10:09 AM 0 comments
Labels: piracy, pirates
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+ consolidation in the piracy business
+ pirates going 1,000 miles - 1,600 KM - off shore

About Me

ken miller
I'm the author of Langata Rules: Pirates at Lat 10, an adventure novel about piracy off the Horn of Africa. In researching the book I've developed a strong interest in the links among piracy, terrorism and development. The foreword to the novel, by Congressman Adam Smith, makes the case for dealing with failed states in both military and economic terms. If you'd like to read the foreword or a chapter from the novel, pls let me know

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