Pirate credit, pirate collateral, and pirate price discrimination, in Somalia

Pirates don't even have to pay upfront. Those holding ships hostage that haven't yet received ransom can buy goods on credit — at elevated prices — and settle up their debts when the ransom money comes in, villagers say.

Here is evidence of price discrimination:

When villagers think the price of a cosmetic is too high, their reply is "we are not pirates," said Abdullahi.

The closer to the pirate dens one gets, the higher the prices go. In the nearby town of Eyl, a cup of tea costs three times as much as in Bossaso. In Eyl, pirates pay $5 for a shoeshine, compared with 50 cents in Bossaso, said Hashim Salad, a store owner.

The article is interesting through and I thank Cyril Morong for the pointer.

Comments

Arrrrrrrrrrbitrage.

Someone had to go there.

Interesting, particularly given that I pay $5 for a shoeshine—well, actually I don't, but that's how much I would pay in the building across the way if I weren't too cheap to pay somebody else to shine my shoes.

You're welcome.

Although the Somali pirates make millions of dollars, it still pales in comparison to what the movies make. Pirates of the Caribbean: At World's End took in about $960 million worldwide at the box office while costing about $150 million to make. Then it made about $295 million in DVD sales. And that was just one of the movies.

As it has already been noted, the higher costs of goods and services is due to the wealth of the areas inhabitants. "We are not pirates!" claim the villagers. As true as that may be, they are still taking the opportunity to increase their profits from those who are.

Two other things I noticed:

1. The linked article has several sentences that have been turned to gibberish. I wonder if some internet pirates launches a raid?

2. The misuse of the word "expert" for the think-tank researcher Roger Middleton. Is he a former pirate himself with years of experience? I think not. A research paper does not an expert make.

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