Two days ago, I wrote about the issue of piracy, specifically off the coast of Somalia. Known as the Gulf of Aden, this treacherous strip of blue water is traversed by nearly 20,000 vehicles each year. While only a small percentage of those vessels are attacked by pirates, the criminal enterprise is estimated to cost nearly $7 billion dollars annually —in ransom, insurance or surrendered goods. With piracy being an internationally recognized crime, it stands to reason that the response would be swift, coordinated and effective. However, piracy off the Horn of Africa persists —and exists— because the many of the proposed solutions are mutually exclusive.

Piracy primarily affects private vessels. While most of these boats are commercial, the goods in any one vessel can range from food stuffs to oil/natural gas resources. This variability means the potential losses —financially— also vary widely. For private companies shipping their goods through the gulf, insuring their property can be an exorbitant cost. After a rash of pirate attacks in 2008, these individual insurance premiums rose even further, making insurance rates almost unworkable.

Interestingly, the high cost of insurance persists despite the low likelihood of pirate attack —even in the 2008 spike, only 40 boats were affected. As a result, companies often decide to take their chance. The problem sharpens when their luck runs out.

When a boat is commandeered by a pirate group, the real money is in the ransom demanded for crew and goods. For obvious reasons, it is easier to extort cash from a private company that to dock the hijacked boat, unload the goods and resell the materials in a local market. *(Considering the state of the Somali economy, combined with the lack of infrastructure to transport anything quickly and easily to other grey or black market locations, ransom becomes standard operating procedure.)

Now, if companies have failed to purchase the overpriced insurance —and when you factor in the moral imperative to negotiate the safe return of their employees— companies often pay the ransom, reward the pirates, and free their ship. The only issue, however, is that this course of action is diametrically opposed the tact taken by states.

In keeping with the “we don’t negotiate with terrorists” argument, most countries have a non-engagement policy with pirates: paying a ransom is seen to incentivize the illegal activity — to give rise to a new wave of open-sea scoundrels eager to exploit the lucrative shadow world of transnational crime. But as the tactics used by the private sector are incompatible with the strategy taken by states, pirates are left to exploit the middle ground.

For nearly a decade, states have been trying to shrink this middle ground through a renewed security operations, particularly in the Gulf of Aden. Due to the importance of the region to the global merchant economy (the gulf is primary sea-lane for commercial shipments from east to west and vice versa) US, Chinese, and a constellation of NATO naval campaigns have assumed the costs of patrolling the international waters. But even as naval patrols and international security alliances work (at great cost to the sponsoring nations) to repel pesky pirates, the practice continues unabated.

Geographically, the extensive size of the sea makes effective patrolling nearly impossible, and has led most patrol vessels to merely escort commercial vehicles through the narrowest (“pinched”) stretches of the gulf. These inlets force larger ships to slow down, thus allowing quick moving pirate skiffs to board and commandeer the vessel. While most pirates flee as soon as naval vessels arrive, the deterrent effect of these patrols is still quite weak.

In part, this is due to the very triggers of piracy: a weak Somali state without a functioning (or followed) rule of law, means that pirates can abuse the legal system while remaining immune from its punishment; their shuttered economy cannot be addressed by an international naval strategy intent on rooting out the very pirates forced into the world of crime after their country’s insufficient infrastructure completely collapsed in the 1990s. And, if both the above are true, then the costs associated with being caught pale in comparison to the potential gains of successful pirating: where else would an impoverished Somali ex-fisherman find 30,000 USD?

For any spectator, and certainly for most analysts, the greater Horn region presents myriad challenges to security, order and growth —conditions necessary to create the institutional strength  many believe Somalia sorely needs. But the challenge of piracy highlights a harder moral, intellectual and political calculation: what can be done to crackdown on the practice today, if the causes of piracy will take decades to address?

While the answer isn’t clear, some ideas have been proffered. Those, however, will be tackled in a later post.