By Maximilian Clarke

High resolution satellite imagery has shown how the Somali economy is benefiting from lucrative ransom payments from piracy in the Gulf of Aden.

The author of the report, carried out by independent international development think tank, Chatham House, Dr Anja Shortland, says that piracy has had a positive impact on local economies and therefore a military strategy to eradicate piracy could seriously undermine local development.

Treasure Mapped: Using Satellite Imagery to Track the Developmental Effects of Somali Piracy demonstrates how pirates appear to be investing money principally in the main cities of Garowe and Bosasso, rather than in the coastal communities where pirate activity takes place. The report also suggests that coastal villages have gained little from hosting pirates and may be open to a negotiated solution which would be to their benefit.

“A consistent story emerges regarding the impact of ransom money on the Somali economy,” says Dr Shortland says. “Piracy appears to lead to widespread economic development and therefore has a large interest group behind its continuation. However, most beneficiaries are located in the provincial capitals. The international community should bear these results in mind when developing land-based strategies to resolve Somalia’s pirate problem.”

Since mid-2010, pirates have become considerably more violent. Because of the increased difficulty of hijacking ships in waters monitored by warships from over thirty nations, pirates invest more resources in maximising the return from each captured ship. Ransom negotiations now drag on for longer and result in record payments. Moreover, there are as yet unproven assert ions that al-Shabaab is offering attractive cooperative agreements to pirates, meaning that piracy could at some stage fund regional instability and terror.

There are therefore strong incentives to try a fresh approach to resolving the issue of piracy off the Horn of Africa. A land-based solution might involve replacing piracy as a source of income to relevant local communities. However, it is unclear where the beneficiaries from piracy are located, whether revenue from pirate activity is mostly channelled abroad or used domestically and how widely the benefits are spread. Due to the absence of central government, conventional data on economic activity in Somalia has been lacking since 1989.

The report seeks to understand the on-land impacts of piracy, in order to assist those seeking to find on-land solutions.

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