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Somalia

The Piracy Money Cycle: ‘Trickle-Round Economics’

Stuart Yikona's picture
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Sitting in a safe house, an ocean away, three former pirates reflect on their past lives as ”footsoldiers” aboard  skiffs preparing to attack unsuspecting cargo vessels off the Horn of Africa. Our research team is transfixed by their stories.
 
We listen as they describe to us how they got involved in the piracy business, how much they earned, how they spent their money and, perhaps most interesting, what they know about their ”masters” – the pirate financiers, investors and negotiators.
 
These footsoldiers were merely small fish in a big sea.  They would be sent out to hijack shipping vessels, which would only be returned to the ships’ owners for a hefty ransom.
 
Following research for our report   “Pirate Trails,” studying acts of piracy off the Horn of Africa, we estimate  that between US$339 million and US$413 million was handed over  in ransom payments between April 2005 and December 2012.  The exact amount is very hard to pin down, given the reluctance of the shipping companies and pirates to reveal the cost and rewards of piracy.

Somali Remittance Freeze: What Can Be Done About It?

The remittance freeze is impacting Somali families that rely on relatives in America (photo credit: Trocaire, Flickr)Minneapolis has the largest Somali population in the US. Sending remittances to Somalia was put at risk late December when the Sunrise Community Bank in Minneapolis announced that it was going to close the accounts of all Somali remittance companies on December 30th 2011.To our knowledge, the Sunrise Community Bank was the last bank that was serving Somali remittance companies in Minneapolis. Closure of accounts meant no operation for remittance companies. This in turn meant no money for remittance-dependent Somalis, who had no other options since remittance service providers such as Western Union and MoneyGram didn’t operate in Somalia. Aid groups lobbied to challenge the closure, and their petition reached all the way up to President Obama.