[Market Economy Guide] Somali Pirates and Government

“Why There Are So Many Pirates in Somalia: Because People Are Poor

Another Cause Is the Absence of a Government That Protects the Rule of Law and the Market”

Along the African coast, pirates who seem as if they belong only in movies are still rampant today, threatening foreign vessels. In particular, the Gulf of Aden near Somalia and the waters off East Africa are notorious for frequent pirate activity. This region is a key maritime transportation route, yet the coastal security capabilities of the countries concerned are weak. Somalia in particular is a representative case of a country lacking public security, which is why Somali pirates have been among the most violent and active in East Africa.

They Became Pirates Because They Had No Way to Make a Living

In Somalia, not only public security but also the economy had completely collapsed due to a prolonged civil war. As a result, severe inflation occurred and unemployment soared, leaving the Somali people in extreme hardship. On top of that, drought devastated the agricultural base, and indiscriminate fishing by foreign boats depleted fishing grounds as well. In this situation, Somalis who needed to survive turned to piracy.

As pirate income became more lucrative than expected, warlords and even foreign businessmen began to actively join pirate operations. As a result, pirates gradually became more professional, expanding their activities into increasingly bold and brutal forms, including boarding ships, kidnapping, armed clashes, and even the assault and murder of hostages. For a time, anti-piracy operations by major shipping nations had reduced pirate activity in East Africa, but it is now increasing again.

Somalia Is in a State of Anarchy

In an anarchic or lawless society like Somalia, there is no way to protect the safety and rights of the people. As a result, looting and violence inevitably become widespread, and even obvious criminals may be praised as heroes. Therefore, in order to properly protect the safety and rights of the people, a law-governed society must be established in which the authority of public power and the strict enforcement of the law are properly upheld.

On the other hand, a situation in which the government intervenes in everything, issues orders, and controls citizens’ behavior is not desirable either. A control society in which public power is mobilized indiscriminately or regulations are abused through rigid standards at every turn is not a desirable law-governed society. In other words, just as a society that falls into anarchy and loses the rule of law is undesirable, so too is a society in which the government constantly monitors and controls people’s behavior.

The desirable case is a society that uses the law to give priority to protecting individual freedom and private property. In other words, only a free democratic state with pro-market laws and institutions can truly be called a society governed by the rule of law.

Whenever an economic downturn or crisis strikes, governments around the world tend to intervene aggressively. This is because they believe they must present visible remedies in order to win public support. However, Adam Smith saw the government’s role as that of a night-watchman state. That means it should take responsibility for public security and national defense and leave the rest to the private sector. When the government remains faithful to its essential role, a country can maintain its vitality. History proves this principle: countries that have concentrated power in government while pursuing all kinds of intervention have fallen behind or suffered bitter setbacks, whereas countries that focused only on what governments absolutely must do have led economic growth.

To encourage vibrant business activity and achieve strong economic growth, what is needed is a government that remains faithful to the basics. Such a government is a market-friendly government with laws and institutions consistent with the principles of a market economy, including expanding markets and guaranteeing free exchange.

The Government Must Protect Property Rights

Korea is a country that achieved rapid industrialization through market-friendly open policies. However, in the course of that industrialization success, which was achieved through free trade and competition policies, government interventionism also crept in and produced side effects. Examples include government-led bad investments and anti-market regulations.

If Korea is to escape the trend of low growth and become a country where new businesses thrive, market-friendly efforts to ease unnecessary regulations are urgently needed. In the government’s proper areas of responsibility—the things it must focus on—namely protecting property rights, maintaining public security, national defense, infrastructure, and welfare, all of which safeguard the rule of law and free competition, the government must carry out its role clearly and thoroughly. That is the real reason the government must uphold the authority of public power and the strictness of the law.

■ Please remember

To encourage vibrant business activity and achieve strong economic growth, what is needed is a government that remains faithful to the basics. Such a government is a market-friendly government with laws and institutions consistent with the principles of a market economy, including expanding markets and guaranteeing free exchange.

Sung-no Choi, President, Center for Free Enterprise (CFE)

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Original title: [시장경제 길라잡이] 소말리아 해적과 정부

Author: Sung-no Choi

Date: 2019-04-01

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=14&idx=20061