A new report on Somali piracy published by Chatham House argues, among other things, that piracy benefits bigger coastal towns than smaller ones such as Eyl and Hobyo.
Dr Anja Shortland, a lecturer at Brunel University, used data from satellite imagery to track the developmental effects of piracy. Dr Shortland says a negotiated solution to the piracy problem will bear fruit if communities that rely on piracy are given a more attractive alternative that brings them far greater benefits than hosting pirates does.
While it is true that availability of accurate data on the percentage of pirate money ( ransom) spent in Somalia is hard to find, there is a plenty of data to determine if a booming economy of town is caused by pirate money or not. Dr Shortland takes into account significant weaknesses in the data sources on which her conclusions are based.
This essay discusses gaps in Dr Shortland’s analysis. Those gaps affect the implementability and accuracy of recommendations.
In discussing nominal wages of four regions ( Mudug, Nuga[a]l, Bari and Banaadir), the author of the study writes: In the three pirate regions nominal wages have more than doubled since 2006, while in the Banaadir region nominal wages in 2010 were roughly equivalent to their 2006 levels.
The decline in the daily wage rate for causal labour in Mogadishu is accounted for by a major trend that make the region in which the capital located the inappropriate comparator’ . Between December 2006 ( when Ethiopia intervened in Somalia to back up the Transitional Federal Government (hereafter TFG’) and late 2011 (when Al Shabab militant group foot-soldiers were forced to flee Mogadishu) , people in the capital were affected by insurgency against the TFG, and this affected the economic activities in the capital and caused many people to become internally displaced people in places like Puntland.
According to the author, livestock exports and pirate money affect Somali exchange rate ( although goats and camels are prized hard-currency earners) . The Somali shilling (SSh) is not backed by a government and there is no monetary authority. Many transactions are conducted in US dollars, but the Somali shilling continues to be widely used, writes Dr Shortland despite another effect on Somali exchange rate: money printed by the TFG and local administrations.
Using data from the US National Oceanic and Atmospheric Administration (NOAA), the author of the study argues that an increase in night-time light emissions reflect reconstruction after the civil war and diaspora remittances supporting consumption and development. After 2007 however, there appears to be a downturn in total light emissions in twelve of the fifteen cities. The exceptions are Garowe, Bosasso and Kismayo but the author contradicts herself when she writes: The Somali diaspora is likely to have contributed significantly to private investment in Garowe.
However, mass emigration from Puntland is relatively recent and the Puntland diaspora is less able to contribute than the well-established Somaliland diaspora, which emigrated in the 1970s and 80s. Emigration to the middle east in 1970s, and to Europe in late 1980s because of the civil war, was a common Somali experience. Neither the name Somaliland nor Puntland existed then: both administrations came into existence in1990s after the collapse of state in Somalia. Places like Garowe, the administrative capital of Puntland, grew partly because if the internally displaced people who fled southern Somalia and because of making the city the seat of Puntland administration.
2012 RBC Radio