Why This is the World's Pirate Capital

At exactly 6 AM on January 18th, 2014,  the sun began peeking above the horizon in   Luanda, Angola, marking the beginning of what  seemed, at the time, like any ordinary day. Just seven nautical miles off  the coast sat anchored “Kerala”,   a Greek-owned, Liberian-flagged,  Angolan-chartered oil tanker. Kerala had just loaded  60,000 metric tons of diesel   and was carrying a 27-person crew,  when something strange happened. The ship suddenly stopped broadcasting a signal.  Its owner tried but failed to make contact. As far as any map, satellite, or radar  was concerned, Kerala stopped existing. An entire day went by… nothing. Then  another day. And another. Then five more. Finally, on Sunday, January 26th,  eight days after its disappearance,   the tanker emerged 1,300 miles  north, off the coast of Nigeria. It wasn’t hard to put the pieces together:  13,000 tonnes of oil, worth $8 million,   was missing, one crew member injured, and the  ship’s identification markers painted over. In case there remained any doubt  that this was a clear case of piracy,   a suspicious tugboat had been sighted nearby. Instead, the plot thickened… Sponsored by Morning Brew — the free,   daily newsletter that keeps you up to  date on the world of tech and business. When you hear the word “piracy”, you probably  think, consciously or otherwise, of Somalia. For a long time, this was the  capital of maritime hijackings.   At its peak, in 2011, 736 crew members  and 32 ships were held hostage. Why Somalia? The answer seems obvious: The average person   lives just 57 years, and its GDP per capita  is the second-lowest of any country on earth. It ranks at the bottom, in fact, of nearly  every metric where data is available. But while most of the population lives  on less than one US dollar a day,   just a few miles off the coast pass by ships  carrying many millions of dollars in cargo. To put things in perspective, Somali pirates  collected an estimated $70 million in 2009, which   would make it the country’s third most lucrative  industry, after Gold, and sheep and goats. The actual cost of piracy, on the other hand,  is much larger. It includes not only the ransoms   themselves, but also the second-order costs of  prevention, insurance, and lost efficiencies. When everything, from hired security to longer,  alternate routes are factored in, a single   hijacking, between Europe and Asia, increases the  overall maritime shipping costs that year by 1.2%. Now, around 2009, the world  collectively decided enough was enough. NATO’s Operation Ocean Shield was led  by the U.S., but everyone, from Norway,   to Pakistan, China, and even Russia pitched in. It’s a strange set of circumstances  that gets India and Pakistan,   the U.S. and Russia, and China and Japan to  fight on the same side, but nobody likes pirates. And, to the surprise of no one,  guided-missile destroyers and   their assortment of Seahawk helicopters were  victorious over… a few dozen wooden skiffs. Since 2018, thanks to an aggressive  military response, both mercenary and naval,   no attacks have occurred in the  international waters around Somalia. Piracy, it seemed, was  becoming a thing of the past. Then, like a game of whack-a-mole,  it sprung up somewhere else. This time on the other side of  Africa, around the Gulf of Guinea,   whose coastline stretches nearly  4,000 miles from Senegal to Angola. Today, a staggering 95% of all global  kidnappings occur in these waters. Eight of the nine ships fired upon in 2015  were traveling through the Gulf of Guinea. In 2017, over a third of all  ships passing through the   region carried kidnapping and ransom insurance. Although it hasn’t yet reached  the level of Somalia at its peak,   the Niger Delta is becoming  the new global piracy hotspot. Half of Nigeria lives in what the  UN calls “multidimensional poverty”,   which measures both income, and other  factors like healthcare and education. Wherever there’s poverty plus  opportunity, it seems, piracy will follow.  Yesterday, Somalia. Today, Nigeria.  And tomorrow, somewhere else. Or, so it appears, on the surface. In reality,  what we’ve come to think of as “piracy”, is more   a result of specific circumstances within Somalia  than the explanations Hollywood popularized. Piracy in each region is  based on entirely different,   culturally and economically  distinct, business models. The central problem facing the country of  Somalia is that… it’s hardly a country, at all. Since the collapse of a centralized government in  1991, Somalia has been ruled by regional fiefdoms   with varying degrees of law and order.  Over the course of one 16 year period,   no fewer than 14 failed attempts were made  to establish a new national government. The result is that, while most of the world  recognizes only one sovereign “Somali state”,   there are, in effect, several self-proclaimed  independent governments and warlords. One of which, Somaliland, acts, in practice, like  any other nation — issuing its own passports,   holding its own elections,  and enforcing its own customs. This inability by the central government to  project power beyond the capital, combined with   droughts, and aggravated by insurgents, means  that a general lawlessness pervades the region. The resulting unemployment is one  of the primary drivers of piracy,   yet, Somalis have simultaneously  turned this into a strategic advantage. Anyone, anywhere in the world armed with an  AK-47 and some bravery can attack a ship,   most of which really only travel  at 20 or 25 miles an hour. The problem is what you do after that. The most  valuable cargo on a ship is its crew — from   which you can potentially extract anywhere from  700,000 to nearly 10 million dollars in ransoms. But kidnappings are no walk in the  park. Fresh-faced pirates are promised   action and adventure but soon discover  they’re more like small business owners. Just as new franchisees realize all they’ve  done is paid for the right to flip burgers,   being a pirate isn’t all it’s cracked up to be. Most of the job is spent transporting,  guarding, and feeding hostages,   doing bookkeeping, and,  above all… patiently waiting. For every one person holding a gun  announcing “I’m the captain now”,   there’s at least one more doing  the boring, grunt work on-shore. During the heyday, many coastal communities were  based entirely around supporting this “industry”. The average length of a  kidnap-for-ransom operation   is 6 months, and some negotiations  drag on for over a year. That’s six whole months of just  waiting, trying not to get caught. But herein lies Somalia’s advantage.  Its complete and utter lack of formal   institutions — a motivated police force  or functioning government — means that   its pirates can afford to hold hostages as long  as necessary without fear of being found out. Then there’s West Africa. The region’s economic center is Nigeria, by  far the most populous country on the continent. Nigeria is an oil giant. Its over 600 fields  pump out 2 million barrels of crude oil a day. The industry generates 95% of the country’s   foreign exchange and 80%  of its budgetary revenues. Yet, in a classic case of the “Resource Curse”,   only about a quarter of its  oil is refined domestically.   The rest is shipped abroad, refined, and  returned in an expensive and inefficient cycle. To avert protest against a system  that clearly benefits only faraway   corporations and corrupt local politicians,   oil imports are heavily subsidized — making  its fuel among the cheapest in the world. Corruption, resource dependency,  and exploitation mean that, despite   producing more oil than anywhere else in Africa,  Nigerians lack reliable access to electricity,   instead spending $9 million a  year on fuel for generators. On top of all this, oil importers regularly  decide they aren’t getting properly compensated,   cut off supply, and create  shortages across the country. The result is unmet demand for fuel  and a pervasive sense of injustice.   It’s hard to feel constrained by the law  when it’s abundantly clear that no one,   from local administrators  to top officials do either. One way this manifests is  illegal, makeshift oil refineries.   A group of… “entrepreneurs” will set-up camp  in the swamp, burn crude oil in open air pits,   and sell whatever comes out the other  end at gas stations across the country. The other way is known as “petro-piracy”,  an extension of the widespread plunder   of oil that occurs on rivers and  pipelines across the Niger Delta. Unlike in Somalia, where most  pirate attacks are kidnappings,   a significant number here are  oil seizures targeting tankers. In 2016, pirates stole 400,000 barrels of crude  oil every single day in the Gulf of Guinea,   for a total loss of $750 million in 2019 alone. Ironically, part of Nigeria’s  problem is the opposite of Somalia’s. Where Somali piracy flourished  in the absence of a state,   piracy in the Gulf of Guinea  is often enabled by it. Put another way: its problem is that  it has too strong a formal economy   and not enough lawlessness. Recall the case of Kerala. Logistically,  it would’ve been difficult to hide a ship   of that size for months at a time,  as was often done around Somalia. On the other hand, some semblance  of formal institutions and markets   are an asset for Nigerian pirates — there’s  always an unscrupulous buyer for stolen oil. Petro-piracy is sophisticated. For starters,   it happens really fast — sometimes oil is  seized and re-sold in a matter of hours,   quickly and untraceably moving between  the 20 countries in the Gulf of Guinea. Attacks often require insider  information, connections, and planning. Some studies suggest there’s  a kind of “sweet spot” between   anarchy and order that maximizes  opportunities for piracy. After a ransom was successfully paid for MV  Victoria, a freighter attacked around Somalia   in 2009, for instance, pirates offered  to stay on board until it reached safety   to ensure it wasn’t hijacked by a competing gang. Similarly, when al Qaeda tried to set up shop in  Somalia during the 90s, it was frustrated by its   lack of policing. Self-protection is costly and  time-consuming, even for pirates and terrorists. When Kerala was eventually found, the  Angolan Navy conducted an investigation. Its verdict? The whole episode  was faked. There was no hijacking,   and the suspicious tug was, instead, a “replica”. What this means is either that someone on  the ship itself coordinated the attack,   or the Angolan government dismissed evidence  of what would be the most Southern attack in   the Gulf of Guinea at the time, worrying that  it would deter shippers and harm the economy. As you can see, the lines between  the formal and informal economies,   and the “good” and “bad” guys are blurred and  sometimes even change from one day to the next. The lesson, if there is one, is that stamping  out piracy once and for all is nearly impossible. Take the case of Somalia. While it’s  true that the robust, multilateral   naval response was indeed effective, it  wasn’t quite as successful as it may seem. Rather than disappearing overnight, pirates  and nearby ships, especially fishing vessels,   reached a sort of mutual agreement: Pay us for  a “fishing license” and you won’t be disturbed. Nigerians, likewise, conveniently,  though at times convincingly,   argue that oil companies, who profit from  but give very little back to the country,   are the real pirates — extracting value  from the land for the benefit of few. As long as these fundamental inequalities remain,   piracy will only adapt in its outward appearance  — moving on land and changing in name. …One thing that hasn’t changed much is  how we get our news. I can spend hours   scrolling through Reddit and Twitter and not  really remember anything. Today’s sponsor,   Morning Brew is a better way to stay up to date  on the world of tech, business, and finance. What I like about Morning Brew is that it’s  self-contained. There’s a start and an end,   not an infinite scroll. Every issue is  interesting, witty, and condensed, so   you can feel accomplished, up-to-date, and learn  something new in the first 10 minutes of your day. In a recent Morning Brew, for example, I  learned that Amazon today has double the   number of employees it did at the start of 2020.   Amazingly, it also makes more revenue  from advertising than YouTube! Click the link on-screen or in the description now  to sign up for the Morning Brew newsletter 100%   completely free and in just 15 seconds.   Sign up, give it a try, and thanks again  to Morning Brew for sponsoring this video!

Channel: PolyMatter

Views: 624,197

Keywords:

Id: OMnJ24XG5Gc

Length: 14min 23sec (863 seconds)

Published: Tue Feb 22 2022

Reddit Comments

[u/yolomatic_swagmaster]

Glad to hear PolyMatter mention the abrupt endings that seem to be a common thing in Nebula videos. To be honest, I'd be fine with something like a thank you for patrons just rolling at the end almost like credits. But I don't think he emphasizes those in his videos.

Also, I can just unlearn the expectation of there being more after the actual video ends.

[u/RetlocPeck]

Wake up babe, new Polymatter video just dropped