Is Somalia’s Pirate Economy Starting To Fall Apart?

On Tuesday the pirates scored their largest ransom to date, $7 million for the Greek tanker Maran Centarus, which was captured 800 miles out to sea in the Indian Ocean late last November. But reports from Haradheere, Somalia are that a gun battle soon broke out between two groups over a disagreement on sharing the booty.

You might remember this post from last month about how a stock exchange, where patrons could “invest” in pirate missions, had emerged in Haradheere. The gunfight could be the result of the pirates who seized the Maran Centarus trying to renege on paying off their backers. According to the Times of London, this particular band of pirates is from the Puntland region of Somalia, to the north of Haradheere. It could be that they thought they could slip out of town without first paying off their local investors.

The pirate stock exchange basically runs on the honor system – investors give pirates money and equipment with the understanding that they will receive a portion of the prize should the pirates successfully capture and ransom a ship. But if the pirates refuse to share the wealth, the whole system falls apart. And with essentially no functioning government in that portion of Somalia, the Puntland pirates and Haradheere locals will have to sort this dispute out themselves.