Wednesday, December 2, 2009

Pirate Stock Exchange

Every now and then you read a story that just blows your mind...I was about to post a link to my latest piece over at The Mantle, the topic this time is the Somali pirates and how they could affect the future of international relations (check it out when you finish here), then I saw this story from Reuters about the Somali Pirate Stock Exchange.

Yes, you read that right, in the port city of Haradheere, a stock exchange was founded earlier this year, built around the pirate economy. Investors buy a "share" of a future pirate mission, if it is successful and the pirates capture a ship, investors then get a cut of the eventual ransom payment - it's like Lloyds of London in reverse. Reuters told the story of Sahra Ibrahim, a divorcee who bought a share of a pirate mission by donating a rocket-propelled grenade she received as an alimony payment (and wouldn't you have loved to have sat in on that divorce hearing?). Her mission was a success, the pirates captured a Spanish fishing trawler, later ransomed for more than $3 million, which netted Ms. Ibrahim $75,000 for her investment.

Apparently the exchange has been a runaway success. Its organizers say that in the four months since its founding, the number of "maritime companies" (groups of investors) has grown from 15 to 72, and pirates are now asking for larger ransoms to pay back their shareholders.

The exchange is also a good PR move. The Somali pirates, like pirates throughout history, have tended to spend their windfall profits on wine, women and song - all no-nos in traditional, Islamic Somalia. This has made some tribal elders speak out against the pirates and pledge to kick them out of their territories. But a cut of the profits from the Haradheere Pirate Stock Exchange goes directly to the local district to fund public infrastructure projects like schools and clinics - considering that Somalia basically doesn't have a functioning national government to pay for projects like these, this "pirate tax" will likely buy a lot of good will.

So in Haradheere we have a self-organizing capitalist system with a social welfare component, it's pretty amazing really.
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1 comment:

Dan said...

Somehow, this is a sci-fi universe waiting to happen. Licensed criminals who make earnings on the exchange.

Although I suppose it could be argued have that already.