The Power and the Money

Canadian policy on captured pirates: let ‘em go. ¿¿De veras??

  As our few readers know, we've been covering piracy for some time on this blog.  Our first post on the topic, in fact, took on the myth that European navies refused to enforce the law against pirates.  Only now Robert Farley tells us that the Canadian and Dutch navies went ahead, captured pirates, and released them.  Er?

Well, NATO is not the problem.  It is true that NATO, which is not a sovereign state, does not have arrest powers.  But the national navies operating under NATO command do have such powers.  Now, I'd be happy with giving an international organization arrest powers, but I can see why some politicians might be reluctant to take that step.  That said, the truth is that not only do national militaries have the power to arrest pirates on the high seas, since December they've had the ability to do the same thing anywhere in Somali territory, sea or land.

So if this and this story are correct, something isn't working.  In the Dutch case, it seems to have been a low-level screw-up.  Ships under European command have standing orders to turn captured pirates over to Kenya for prosecution and punishment; ships under NATO do not.  There was a deputy from the justice ministry on board the Dutch ship (for precisely this reason), but whoever it was decided to let the pirates go.  Parliament appears to be annoyed.  At some point, I suppose, we'll find out who made the decision and why.  We might even find that circumstances made it a wise choice.  But it isn't Dutch policy, and it seems to be causing the government some headaches at home.

Canada seems to have a deeper problem.  The Globe and Mail has deeply misinformed its readers by reporting, contrary to fact, that “Canadian sailors, like their NATO allies, lack the authority to make arrests in international waters.”  Of course, the Globe and Mail is parroting what seems to be Ottawa's official line.  After all, the Prime Minister said in Port-of-Spain that the Winnipeg did the right thing by releasing the pirates.  “Those were the appropriate measures under the circumstances.”  Elsewhere, a Canadian admiral alluded to mysterious legal difficulties.  “There's the rule of law that needs to be applied, so we're not currently regularly detaining them, no. There are all kinds of challenges with that.” 

Now, I can understand why a country would fear becoming a dumping ground for pirates ... but it isn't as though hundreds or thousands of them are being captured every year.  Nor is organizing a piracy trial under normal criminal rules all that difficult.  (And they have, by definition, been caught red-handed.) 

So, Canadian readers, I ask you, what the hell?

Pirates and convoys

  I clearly need a new tag.  What should it be?  “Pirates” is too specific for my taste.  “Failed states” is a possibility, but seems a bit, well, anodyne given the rather horrible reality of just what happens when a state fails in the modern world.  “Empire” is another, but might be too ... whatever the opposite of anodyne is.  I'm looking for a short pithy one or two-word phrase that covers places and situations in which the writ of the local state does not apply (or at the very least is not the sole source of authority) and in which other states or institutions might have to substitute for the local government.  Ideas?  Reasons to pick either “failed states” or “empire”?  C'mon, help me out. 

Returning to the topic of the day, in theory there is a way to make policing the sea lanes leading to the Suez Canal much easier.  For reasons which I do not yet fully understand (help?) the Suez Canal authority organizes transits in three daily convoys.  The implication is that, in theory, such convoys could be organized not at the Canal entrance, but at some point in the Indian Ocean.  Naval vessels could then shadow the three daily convoys.  This would require far fewer ships than the impossible 180-vessel armada. 

The organizational details, however, seem rather daunting.  Still, it might be possible for an enterprising contractor to organize convoys around their protective vessels.  It would be more expensive than simply hiring out a security vessel, because the convoys would need to be managed, but it would allow the security firm to enjoy economies of scale from the point of view of the companies that hired its services:  the more clients, the less cost-per-client. 

Thoughts?

More thoughts about pirates

  Pirates attacked 11 vessels in the Gulf of Aden in November.  They attacked an additional 6 in the Indian Ocean off the Somali coast.  Of the 11 incidents in the Gulf, all occurred right outside Yemenese territorial waters, which passing ships have taken to hugging as they head to and from Suez.  Of the 11 attacks in the Gulf, the pirates took their targets six times.  NATO warships stopped three and a tanker crew managed to avoid the tenth.  Of the attacks in the Indian ocean, the Indian navystopped one (sinking the pirate vessel involved), the crews involved evaded three (two by outrunning the pirates and one by turning firehoses on them as they tried to board, knocking their shoulder-held RPGs into the water), and two took their targets. 

I can't link to the source; it's what I was told by intel officers in the U.S. Coast Guard.  Don't worry, it's unclassified.  Another good data source is here, and a third here.

So what is the scale of the problem?  Well, in 2006 roughly 51 vessels passed through the Suez Canal each day.  Given the length of the Gulf of Aden, the fact that the pirates seem to be able to range about 450 miles beyond that, and an average ship speed of 22 knots, that would mean approximately 90 ships within pirate range every day.  (This assumes that vessels headed around Cape Horn could fairly easily re-route to remain out of pirate range.) 

The implication is that a rotating flotilla of 180 armed vessels could probably deal with the problem.  Djibouti may no longer be a French territory, but it hosts several thousand French troops and at least 450 American ones at Camp Lemonier, and it has a (relatively) modern port.  In other words, it isn't right to think that stabilizing Somalia is the only solution.  Of course, the pirates use swarming tactics, where they attack with multiple boats, which poses a very serious tactical problem for the escort vessels.  (Under the current rules of engagement, there is maybe a 15-minute window to attack a pirate ship.)  Alternate strategies are possible; the real point is that the problem is manageable even without any attempt to stabilize Somalia or, alternatively, a smash-up of the pirates' coastal havens.  (The human cost of the latter would not be low.)  One could imagine alternative operations involving continuous aerial patrols of the effected areas, although speaking as someone with some experience, managing such a thing would not be easy and the chance of a major cock-up would be high. 

The big problem?  See below.

Imperialism can really pay

So there's Panama.  Well, what about Suez?

The Suez Canal started under very different political conditions, inasmuch as the Egyptian government was on-board with the project.  So on board, in fact, that it not only put in 45 percent of the initial capital (£1.5 million), it promised the Compagnie de Suez the free use of forced labor to build the thing. 

That wasn't nada.  In 2007 pound sterling, the Egyptians put in £149 million.  But as I've mentioned elsewhere, the world was poorer then:  relative to the growth of the British economy since then, that would be equivalent of plonking in £4.3 billion today.  That would be a lot of scratch for the current Egyptian government; it was an amazing amount of scratch for 1854's. 

So far, so non-imperialistic.  Awful for the poor people who had to live under Cairo's despotism, but that'd be like blaming Russia for the shortcomings of the Kazakh government.  (Wait ... no, I'll leave that to those who know more.)

The story gets better, though.  It's an amazing bit of imperial skullduggery ... and perhaps the coolest thing about it is that it could easily happen today.  I mean, it's not like world powers scarf off strategic parts of nearby states for strategic gain these days.

So, with the caveat that what I'm about to tell you is pieced together from primary sources and could well be wrong, the story is below.

In 1863, the Egyptian government decided to abolish forced labor.  This did not make the French shareholders of the Suez Canal particularly happy.  They took the Egyptian government to international arbitration, the 19th-century version of ICSID. 

Oddly enough, Napoleon III was the arbiter.  Even more oddly, because of Egypt's strange international position (it was a country, yet not a country) an uncaring Turkish government handled Egypt's side.  Napoleon III ordered the Egyptian government to pay an indemnity of  £3.6 million ... either £256 million or £5.3 billion, depending on whether you want to know its absolute or relative cost in 2007 terms. 

Think about it:  Egypt decides to stop forcing its own citizens to labor on public works projects, and then has to pay a French company for the resulting losses under threat of sanction.

In the words of those great poets, but wait it gets worse.  The Compagnie de Suez was a financial wreck.  In order to save it, the French pressured Egypt into accelerating its arbitral payments.  When that didn't work, Paris in 1867 basically ordered Cairo to issue £1.2 million in bonds collateralized by its shares in the Suez Canal, which it would then use to subsidize Canal construction.  (Once again, in modern money, that'd be either £75 million or £1.7 billion today, depending on how you think about these things.)  Unsurprisingly, as many of you probably know, Egypt defaulted. 

In short, of the £16.9 million cost of the canal (overbudget by a factor of 2.2), the builders managed to get Egyptian taxpayers to kick in 40 percent of the cost and wind up with pretty much zero equity in the project.

Teddy Roosevelt was a piker. 

Whether Gladstone and Eden then managed to piss away what Napoleon III got is a different question, but one I'd be happy to try to answer next year. 

Doug leaves Burundi

Doug should be back in Germany by now.  He spent his last day in Burundi by the shores of Lake Tanganyika, thinking about tourist potential and the mind-boggling idiocy of the Belgian empire.

I wish him an easy trip home and a wonderful time with his growing family.

Doug in Burundi, Part 9

Doug discusses three separate Burundian issues in his penultimate post in the Burundian series.  The first topic concerns the country's ethnic divide.  It's pervasive, but considering recent history the story is remarkably positive. 

The second topic concerns customs duties.  Burundi, like many African countries (and a few Central American ones) relies heavily on trade taxes for a quarter of its government revenues.  This is the unheralded elephant in the room during free trade discussions.  These countries have a pressing need for more public revenue, to build infrastructure and pay judges and carry out very basic state functions.  Yet they lack the administrative capacity to collect high levels of internal taxes.  Borrowing to build a state could square that circle, in theory; in practice, that hasn't worked out so well.  So what to do?

One possibility is to make like Angola or Mozambique, both of which have effectively handed control over their customs administration to foreigners.  (British foreigners, at that.  Crown Agents, whose flag is pictured above, specializes in running revenue collection in other countries.) 

That sort of empire-by-invitation doesn't seem to be on the table in Burundi, however, although one might think that the French government might be able to play a more pro-active role, if it wanted to.

The third and final topic concerns an issue I find fascinating:  how do banks function in an environment where the politics is unstable and the rule-of-law close to nonexistant?  I wrote my first book about that, and it's fascinating to watch a Togolese (or is it Nigerian?) bank and Burundian politicos deal with the same issues today.  Ecobank is an institution that bears further watching.   

Doug in Burundi, part 8

Here Doug discusses what cheap labor really means on the ground.  And he means cheap labor.  According to the U.S. State Department, workers in Burundi received on average 1,500 francs per day, or $1.40.  Since a 12-hour day wouldn't surprise me, Doug's estimate of 20 cents per hour might even be high.

You don't need to go to Western Europe to see just how poor that is.  To give an example with which Americans are familiar, production workers in Mexican maquiladoras cost US$2.64 per hour in 2006.  Production workers in all Mexican manufacturing cost US$2.75.  Total hourly direct pay for all employees (including benefits but not taxes and other social charges) averaged US$3.32 per hour.  (That'd be 5,752 pesos per month.)  Even farmworkers in the country's northern states make about US$1.50 an hour.  In short, Burundi is impoverished compared to Mexico.

Anyone who spends time in Latin America can see some of the effects of cheap labor, but nothing on the scale of what Doug describes.

Doug in Burundi, part 7, time for some coffee

Doug discusses the Burundian coffee economy here. 

A decade ago (or thereabouts) I got involved with an NGO that advised Chiapan villagers in the area off Mexico-199 between Paleque and Ocosingo. To get there, you had to leave the paved road, travelling along dirt paths maintained (and unofficially tolled) by the locals.  The agricultural areas were served by little "towns" barely worthy of the name, usually consisting of a church (often Protestant — there had been a great deal of religious fighting in the area, and towns tended to be segregated) and a general store.  Electricity was scarce, although cellphones worked fine in some surprising places — the Mexican army made sure of that.

The chief cash crops were cacao and coffee.  More below the fold.

Doug in Burundi, part 6, with hope and vaccines

Vaccination has made an astounding improvement in Burundian public health, even in the midst of civil war.  The question is how Burundi vaccinated so many in the midst of so much instability.  Below is a graph of disease incidence, indexed so that the number of cases in 1980 is set equal to 100.

There is some sad information in the data:  most of the improvement occurs before the outbreak of civil war in 1993.  (The Buyoya regime killed its opponents with impunity, but the state still functioned.  Mostly.)  Then there are disease outbreaks until 1997, which happens to be around the time the fighting started to trail off, right before the '98 peace agreement.  After that, disease resumes its downward trend, save for an outbreak of measles in 2000.

Burundi has not been peaceful since 1998, but nor has it been the scene of full-fledged civil war.  The state functioned.  In 2002, the vaccination program went into high gear, with many rebels even agreeing to respect the “Days of Tranquility,” during which the government set up 990 different vaccination sites around the country.    Here is a brief discussion of the logistics of vaccination campaigns in Africa.  Things were slightly easier in Burundi, where 77 percent of the population had access to health services in 2002 and foreign aid workers operated relatively freely. 

None of this is to minimize the accomplishments of the Burundian public officials who travelled off into the hinterlands to vaccinate the population.  It is simply to say that Burundi is not the worst of the worst in Africa, and the civil war was a terrible setback in a place where public health had been improving.  Backsliding is still a real worry.  Chronology here.

Doug, I would very much like to know more about the role of foreign officials in managing Burundian affairs.  There are countries (like Liberia and Afghanistan) where you can't turn around without encountering a foreign manager or a foreign agency carrying out state functions.  That happens even in Angola and Mozambique.  Elsewhere, foreigners are advisers, facilitators, and funders, but not managers.  What's the situation in Burundi?

Doug in Burundi, part 5

More about Burundi, starting with the presence of the African Union, moving on to the rebels, and ending with a discussion of the country's really really bad transport problems.  It appears to still be raining in Bujumbura.

One point that I'll repeat on Doug's comment page:  narrow gauge isn't a problem.  Narrow gauge railroads can be upgraded to carry similar loads and operate at close-to similar speeds as standard gauge.  They simply lose most of their initial cost advantage.

Doug in Burundi, parts 3 and 4

Looks like it's rainy in Bujumbura.  It's been weirdly tropical in Massachusetts this summer:  black downpours so heavy that you can't see across the street followed by bright actinic sunshine.  Thankfully, that seems to have ended here; let's hope it ends soon in Burundi.

Over here, Doug explains why there's a Greek deli in the middle of Bujunbura.  It seems as though there was a small community that came down the Nile from Alexandria with the British; some kept going and wound up in Burundi, where they helped administer the place and played a role in commerce.  The messiness of independence, though, drove most of them back to Europe (I assume), leaving a big consulate and what seems to be a very nice deli.

Doug in Burundi, part 2

Catch it here.  Although I dunno why it's on AFOE instead of HDTD.

Doug in Burundi, part 1

Available here.

Piratas atacan la madre patria

Newsflash:   pirates just captured a Spanish fishing boat off the coast of Somalia.  A Spanish frigate has been dispatched from the Red Sea and Madrid has requested assistance from NATO countries with a naval presence in the area. 

Considering as I just posted about pirates, I figured that it'd be remiss not to mention that the French raid doesn't seem to had an immediate deterrent effect.  Not that there's anything surprising about that.

Pirates!

In a scene of most superior uber-cool, the French military arrested the Somali pirates who’d captured a cruise vessel returning from the Seychelles on April 4th. 

So, of course, the New York Times would take the opportunity to publish an op-ed blaming namby-pamby British cupcakes for failing to enforce international law by arresting Somali pirates.  Why did the author claim that the Brits were wussing out? Because they were all worried that these scurrilous lawbreakers might claim asylum if they were brought back to the U.K.  Worse yet, the Somali government might violate their human rights if they were turned over to Mogadishu.   

“The British attitude has come a long way since the days when pirates were chained to pilings at Wapping and left there until the tidal water of the Thames ebbed and flowed over the bodies three times. So much for Britannia ruling the waves.”

Sounds good, right?  Fits a whole narrative of European decline, although, well, the part about French military prowess doesn’t quite fit.   

Too bad it’s all complete crapola.  Details below the fold.