Sunday, January 3, 2010

Pirates Spark Housing Price Boom

Just to prove that they deserved the "Capitalists of the Year" award, the Somali pirates are being accused of sparking a boom in housing prices in neighboring Kenya. Officials in Nairobi say that housing prices in some neighborhoods have tripled in just the past five years; by contrast they it should take at least 10 years for prices to double, given normal economic growth. The reason for the property price boom appears to be money flooding in from pirate activity in Somalia. One real estate agent interviewed by the AP said that it is not uncommon for Somalis to pay double the asking price of a property just to complete the sale quickly.

This has sparked charges that the Somali pirates are using the purchase of Kenyan houses as a way of laundering money. According to the US State Department, thanks to lax banking regulations, Kenya is a prime center for money laundering. Some Somali pirates though say that the property purchases are more of a retirement plan than an attempt to hide wealth. One pirate named Abdulle said: "I have invested through my brother, who is representing me, in Nairobi. He's got a big shop that sells clothes and general merchandise, so my future lies there, not in the piracy industry."

Meanwhile the pirates have started 2010 off with a bang by capturing four ships. Among them are two chemical tankers and the "Asian Glory" a cargo ship carrying automobiles to Saudi Arabia. Somali pirates normally do not steal the cargo of the ships they capture, instead they make their money in ransoming the ship and crew, but the automobiles could make for a lucrative payday if they can figure out a way to get them off of the ship. Thanks to 20 years of neglect, most of Somalia's port facilities are in total disrepair, meaning that there's no easy way to off-load bulk items - like automobiles.

It's estimated that pirate clans are currently holding a dozen ships and more than 250 crewmembers.
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