How much do Somali pirates earn?

I am unsure of the generality of the sources here, but the author — Jay Bahadur — is writing a book on the topic and at the very least his investigation sounds serious:

The figures debunk the myth that piracy turns the average Somali teenager into a millionaire overnight. Those at the bottom of the pyramid barely made what is considered a living wage in the western world. Each holder would have spent roughly two-thirds of his time, or 1,150 hours, on board the Victoria during its 72 days at Eyl, earning an hourly wage of $10.43. The head chef and sous-chef would have earned $11.57 and $5.21 an hour, respectively.

Even the higher payout earned by the attackers seems much less appealing when one considers the risks involved: the moment he stepped into a pirate skiff, an attacker accepted a 1-2 per cent chance of being killed, a 0.5-1 per cent chance of being wounded and a 5-6 per cent chance of being captured and jailed abroad. By comparison, the deadliest civilian occupation in the US, that of the king-crab fisherman, has an on-the-job fatality rate of about 400 per 100,000, or 0.4 per cent.

As in any pyramid scheme, the clear winner was the man on the top. Computer [a man's name] was responsible for supplying start-up capital worth roughly $40,000, which went towards the attack boat, outboard motors, weapons, food and fuel. For this investment he received half of the total ransom, or $900,000. After subtracting the operating expenses of $230,000 that the group incurred during the Victoria’s captivity in Eyl, Computer’s return on investment would have been an enviable 1,600 per cent.

There is a very good chart on the right-hand side bar of the article.

Comments

How about more about how our stupid drug policy is killing people?

Hey, could you (as in, is it possible) make it so links from MR to FT don't require login (and make you some money?)?

If you look at the death rates of sailors in the days of exploration, it's remarkable that they ever got anybody to go: only 35 of Magellan's 237 men got back to Spain. Pirates on the Spanish Main no doubt had high death rates, too.

You cannot calculate return like this. The author must indicate the probability of making this return. For every $ 40,000 that the investor would have put in, many would have failed too!

Results sound simlar to the Chicago Drug Gang study of Sudhir Venkatesh detailed in "Freakonomics."

> Computer’s return on investment would have been an enviable 1,600 per cent.

How long before the hedge funds get into this?

> Dutch jail is almost definitely better than the
> modal free-man's life in mogdishu.

I'm not so certain. Your physical environment may be okay, but your peers aren't anything to celebrate.

Sounds like the employees need to start a union and demand health care coverage!

Yet another example of capitalists exploiting the workers.

Pirates of the world unite!

Better chance of dying than being wounded? So more than half that are wounded perish?

Well-intentioned, but honestly, that just throwing money through corruption, it will trickle down to the Pirates could be bright for them to buy new weapons.

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