This post continues my obsession with the economics of piracy and the lifestyles of modern day pirates. I woke up this morning to a post over at The Economist's Free Exchange blog that linked over to an interview that Scott Carney did with a Somali pirate. The interview is really interesting. Here are some interesting excerpts (click the link above to read the entire conversation):
From what I’ve seen, initial demands tend to be about 10 times the previous publicized ransom, is this a rule of thumb?
We know that we won’t get our initial demands, but we use it as a starting point and negotiate downwards to our eventual target. But as a rule, yes, that’s about right.
Does the length of a hijacking change the ransom that pirates are willing to accept?
Yes. Armed men are expensive as are the laborers, accountants, cooks and khat suppliers on land. During long negotiations our men get tired and we need to rotate them out three times a week. Add to that the risk from navies attacking us and we can be convinced to lower our demands.
How much does it cost to outfit a pirate mission?
A single mission with 12 armed men and boats costs a little over $30,000. But a successful investor has to dispatch at least three or four missions to get lucky once.How are the pirates organized? (Are there pirate leaders, financiers, and specialists?)
The financiers are the most important since they organize and plan the big shot operations and are able to pay running cost[s]. Financiers always need to forge deals with traders, land cruiser owners, translators, business people to keep the supplies flowing during operations and manage the logistics. There is a long supply chain involved in every hijacking.