Monday, 1 March 2010

To Pay or Not to Pay, That is The Question, or the answer?

Just before I left for Hong Kong I wrote an article for the student newspaper regarding whether or not to pay the ransom for a British couple held by Somali Pirates in the Horn of Africa.  It seems that in East Asia this issue is once again cropping up.
I read an article in the South China Morning Post today about the fear of some shipping companies in East Asia that were worried about a US-led motion to encourage all parties not to pay the ransom of these Pirates.  While shippers acknowledge rising payments of multimillion-dollar ransoms are fuelling worsening attacks on key shipping lanes linking Asia to Europe, they insist there is no other way to safely rescue ships and crew in the absence of any clear solution to problems in the failed state of Somalia.They believe a ban could further complicate the fight against pirates, putting sailors' lives at greater risk and forcing ships to use expensive new routes around the Cape of Good Hope.  Shipping organisations maintain that paying the ransom, is the safest and most expedient way to deal with the pirates, citing that this is the only way to ensure safe passage of a ship's cargo and personnel. This may hold some weight in the short term, but in the long term there are far greater implications to consider.  
Roger Middleton, a scholar on piracy at the independent London-based think tank Chatham House, said any such move would be wildly unpopular with the shipping industry. "Ransoms may not help in the long-term, but the shipping industry has found them to be the quickest, safest and cheapest solution to the problem - that is the bottom line.
"Paying ransoms eases their humanitarian concerns and it's cheaper, too, than having a ship and crew detained indefinitely or taking alternative routes that avoid the Horn of Africa."
Middleton estimates that at least US$100 million has been paid to Somali pirates in the past 12 months alone. Ransoms appear to be rising, too, with the US$7 million paid to free a Greek oil tanker last month the highest yet. Yesterday, pirates released a Greek-owned freighter, Navios Apollon and its crew of 19, captured two months ago, after receiving an undisclosed ransom payment.  This is all well and good for the shipping companies concerned with profit margins and law suits if something was to happen to one of their crews but what about the bigger issue.  How to disincentivise Somalians from undertaking Piracy?
What is needed instead is to address the real problem in Somalia.  That is, that people are suffering in poverty due to a lack of state apparatus and infrastructure.  So a hard line stance needs to be taken on Somali piracy in order to be able to enforce other legitimate means of work.  As stated above many Somalis view piracy as the only effective way to get out of a bad situation, so the most effective solution is to keep saying ‘no’ to their ransom demands and try to encourage more legitimate means for them to acquire money.  The British government should be focused on helping stimulate the Somalian economy and providing more Foreign Direct Investment to really tackle the issue of piracy.  As without this, piracy will not just go away when they have got what they wanted, it will only serve as to encourage more piracy, thus adding even more problems to an already destitute system.  
So to pay or not to pay? I say not to pay, the tens of millions of US dollars could be better aimed at providing real foreign investment in Somalia and to create some sort of infrastructure, not just appease those that hold a gun to our heads.  However, until there is a firm global stance on not paying this will have little impact, and companies will continue to pay the fees for safe passage through the Horn of Africa.  Its not often I support a global policy initiative of the US, but on this occasion they may have a point!