Somali Piracy Is Wildly Profitable

Douglas McIntyre at 24/7 Wall St. has done us all a favour and worked through the maths on Somali Piracy. It proves, neatly, that the problem isn’t going away anytime soon. It’s just too profitable — not just by Somalia standards, but by the standards of any business.

By his numbers, total pirate loot for this year will probably be somewhere around $200 million. Of course they have various expenses, such as boats, GPS equipment and most importantly protection — some would liken that to a mafia payoff, though in developed economies we’d call it “taxation.”

Anyway, the bottom line is that even after all that, the pirates are still pulling down $120 million per year, which on $200 million in revenue is an insanely high net margin.

Then you consider the fact that that heroic Somali pirates, when they come back to shore, are greeted with women who want to marry them.

Women + profit margins… nope, this isn’t going away.

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