Economics and Somali Piracy

March 8, 2013 Guest Author 1 Comment

While the consensus seems to be that Somali piracy is in a terminal decline, over the weekend the Washington Post’s Wonkblog highlighted an interesting academic study from last year that attempted to determine the costs of Somali piracy since 2008. The bottom line, from economists Timothy Besley, Thiemo Fetzer and Hannes Mueller, was that piracy increased the cost for shipping bulk cargo through the region 8%, with a 14% seasonal discount between December-February and June-September when the monsoon causes sea states to be less hospitable to pirates.

Of particular interest is the economist’s attempt to measure how efficient piracy has been as a method of transferring wealth from the rest of the world to Somalia. According to their analysis, pirates generating a total in $120M in annual ransoms would possibly drive industry to spend up to ten times that amount on insurance and onboard security. Theoretically, Somalia could get the same amount of money from an .8% tax on charters than the 8% increased costs faced by shippers.

Piracy has driven some economic growth in Somalia, with one study arguing that ransoms received in 2009 were five times greater than the budget of Puntland. Such development has been uneven however and did not benefit all Somalis. Intriguingly, economic growth and development measured in terms such as construction, urbanization, and light emissions measured through overhead imagery showed significant growth in major Puntland cities like Bossasso, rather than main Puntland pirate bases like Eyl and Hobyo.

Although ransoms as a wealth transfer are a “thought experiment” which the authors don’t necessarily advocate as policy, there is a clear subtext that aid for effective security forces would be a cheaper method to achieve the security needed to eliminate piracy than paying ransoms or funding afloat counter-piracy task forces. They cite Stig Hansen’s compelling argument that the triggering event for the explosion of piracy in recent years was the Puntland economic crisis in 2008, during which the government of the semi-autonomous region suspended pay to the police and militia responsible for border security.

Of course while a tax on trade to fund a wealth transfer to Somalia may have been a much more efficient way of combating piracy than the current combined approach of naval forces afloat, industry best practices, a Kenyan invasion of Somalia, and the funding of AMISOM troops (in a previous article in Proceedings I vainly attempted to compare the relative costs and benefits of counter-piracy task forces afloat and security forces in Somalia), it does not square with any accepted notion of freedom of navigation in international waters. While an effective Somali government would certainly have the right to regulate economic activity in its Exclusive Economic Zone (commonly listed narratives for the start of piracy in the region include grassroots local efforts to regulate illegal fishing and toxic waste disposal by foreigners in Somali waters), impeding or taxing commercial shipping traversing international waters adjacent to Somalia would be unacceptable to the international community.

Lieutenant Commander Mark Munson is a Naval Intelligence officer currently serving on the OPNAV staff. He has previously served at Naval Special Warfare Group FOUR, the Office of Naval Intelligence, and onboard USS Essex (LHD 2). The views expressed are solely those of the author and do not reflect the official viewpoints or policies of the Department of Defense or the US Government.

Cyber War

From Epipole to Cyber War

March 7, 2013 Guest Author 4 Comments

From The Jaws of Victory

In the Peloponnesian War, the 414 BC final battle of Epipole showed the pitfalls of an over-reliance on communications and single circuits. During this last battle of the Athenian siege of Syracuse, the Syracusans countered the attempt of Athens to wall in the city by building a counter-wall in the projected path of Athen’s efforts. The Syracusans had gained a critical blocking position, and Athenian General Demosthenes concocted a plan to dislodge the defenders. The Athenian forces stalled during the daytime battles outside the counter-wall, when their enemies could easily observe and rally against them, so General Demosthenes planned t strike the counter-wall at night. The well-organized nighttime Athenian attack completely overwhelmed and nearly destroyed the first Syracusan garrison. As the alarm sounded, the Athenians rushed forward without allowing themselves time to re-organize and re-identify. When the first real resistance was met, the ensuing disaster captured by Thucydides is worth citing in full:

IFF degrades to, "is this person stabbing me in the face?" — Primative IFF: “is this person stabbing me in the face?”

“Although there was a bright moon they saw each other only as men do by moonlight, that is to say, they could distinguish the form of the body, but could not tell for certain whether it was a friend or an enemy. Both had great numbers of heavy infantry moving about in a small space. Some of the Athenians were already defeated, while others were coming up yet unconquered for their first attack. A large part also of the rest of their forces either had only just got up, or were still ascending, so that they did not know which way to march. Owing to the rout that had taken place all in front was now in confusion, and the noise made it difficult to distinguish anything. The victorious Syracusans and allies were cheering each other on with loud cries, by night the only possible means of communication, and meanwhile receiving all who came against them; while the Athenians were seeking for one another, taking all in front of them for enemies, even although they might be some of their now flying friends; and by constantly asking for the watchword, which was their only means of recognition, not only caused great confusion among themselves by asking all at once, but also made it known to the enemy, whose own they did not so readily discover, as the Syracusans were victorious and not scattered, and thus less easily mistaken. The result was that if the Athenians fell in with a party of the enemy that was weaker than they, it escaped them through knowing their watchword; while if they themselves failed to answer they were put to the sword. But what hurt them as much, or indeed more than anything else, was the singing of the paean, from the perplexity which it caused by being nearly the same on either side; the Argives and Corcyraeans and any other Dorian peoples in the army, struck terror into the Athenians whenever they raised their paean, no less than did the enemy.”

In Sicily, the simple task of a man not stabbing his own ally in the face with a sword was hard enough with only primordial Identification Friend or Foe (IFF) and comms. In today’s high-speed remote-control warfare and vulnerable high-tech comms, in which seconds can mean life-or-death, the potential to accidentally destroy a friend, miss an enemy, or become isolated is even greater. When the enemy knows the “watch-words,” this potential becomes a certainty as paranoia and confusion set in.

The Offense Challenge

The defender often has the simpler fight. As illustrated in the excerpt and so aptly explained by the indomitable Chesty Puller, “So they’ve got us surrounded, good! Now we can fire in any direction, those bastards won’t get away this time!” The U.S. Navy, in its typical role as the expeditionary power, will almost always have that offense-disadvantage. It has yet to fight an enemy that can attack the precious network of communications that creates such an unspeakable force multiplier in the field. When the network is attacked, the swarm of American ships, missiles, and aircraft itself becomes a liability, as were the Athenians who cut apart their own brothers ahead of them.

Protecting Less with More

The solution to the communication weakness is to stay ahead of the offense-defense struggle through aggressive capital investment and streamlined lines of communication. As with the use of setting AEGIS doctrine to auto-respond to anti-ship missile (ASM) threats, cyber-warfare is far too fast for human operators. Our virtual-defense infrastructure may be significant, but it is slow, human, and defending far too many unnecessary and redundant communications. A response is a smarter investment in cyber-defense capital and a more disciplined use of our vital communications networks.

"We got the info via e-mail? Good! Bill, request a message. Susanne, request it be added to three status and SITREP messages. I'll request voice reports on two different circuits. I'll also need 6 of you to chat them every 3 minutes from your individual accounts. After that, we'll send a powerpoint for them to update. Also, one of you be sure to forget this is high-side information and constantly ping them until they cave and email it from Gmail. Get to it, people!" — “We got the info via e-mail? Good! Bill, request a message. Susanne, request it be added to three status and SITREP messages. I’ll request voice reports on two different circuits. I’ll also need 6 of you to chat them every 3 minutes from your individual accounts. After that, we’ll send a powerpoint for them to update. Also, one of you be sure to forget this is high-side information and constantly ping them until they cave and email it from Gmail. Get to it, people!”

Streamlining comes from bringing all communications under control, or more accurately bringing under control those using them. We are the Athenians screaming our watch-word at one another because no one bothered to re-organize before charging in. It boils down to paying attention and staying calm; what we have is seventeen sources pinging a ship for the same information that is held in 8 PowerPoint trackers, 2 messages, at least one call over the voice circuits, and 30 emails with at least half the lazy people asking for the information in the CC line. The sheer bandwidth of material that needs protection and monitoring could be decreased with a “ctrl-f” search of email and message traffic. It also leaves a veritable treasure-trove of information lying around in hundreds of different locations, making it easier to steal or detect. Better training – not only in proper communications procedures/methods, but basic computer literacy, – could solve this problem.

Unfortunately, people are not as good at defending us from cyber attack as John McClane might have you think. — Unfortunately, no matter what Hollywood would have you believe, most cyber attacks can’t be defeated by John McClane.

The speed of cyber-attacks only allows the “labor” side of the equation to be reactive; capital investment would concentrate more money in autonomous and innovative defensive programs: 10th Fleet’s AEGIS. Proactive patrol and detection can be done with greater advances in adaptive self-modifying programs and programs that can learn or understand context. Recent developments in computing systems point to more organic systems that can”live” in the systems they defend. Biological processors and organic computing allow for hardware that thinks and learns independently, potentially giving defensive networks the added advantage of an instinct and suspicion. The development of mutable indium antimonide magnetic processors mean that the circuit hardware of a device may now be as mutable as the software running it. Imagine the vast new horizons in the OODA loop of defensive cyber systems with hubs sporting the defensive animal instinct and the ability to re-wire their own hardware. The image painted is dramatic and far-off, but modest investment and staged introduction would serve as a better model than the dangerous possibility of a “human wave” mode of thinking. With better fluid cyber-defense systems guarding more disciplined communicators, the U.S. Navy can guard its forces against Epipolaes.

Matt Hipple is a surface warfare officer in the U.S. Navy. The opinions and views expressed in this post are his alone and are presented in his personal capacity. They do not necessarily represent the views of U.S. Department of Defense or the U.S. Navy.

Strategic Outlook

A Post-Chavez Maritime Order

March 6, 2013 Guest Author Leave a comment

U.S. and Venezuelan Sailors work together during counter-drug operations in 2009.

In the next few days there will undoubtedly be a glut of post-mortems on the Chávez era and predictions for the future (not least because much of Washington’s “blogging class” is home for a snowstorm)¹. Much of it will be by experts on the region or those armed with interesting facts. I’m not aiming to compete or replicate their work; what I want to look at is the implications for defense cooperation, specifically naval and maritime matters.

Danse Macabre Venezuelan
America’s tumultuous relationship with Venezuela under Chávez is well documented – from coups to theatrical UN speeches to declaiming Halloween’s frights as acts of “imperialist terror” – but it wasn’t always this way. Prior to Chávez’s inauguration in 1999, the U.S. enjoyed many fruitful defense ties with Venezuela including intelligence-sharing, counter-narcotics, military training, and defense exports.

Most of these ties continued during Chávez’s first term in office, although an initial indication of Chávez’s wariness of the American military may have arisen during floods and mudslides in December 1999-January 2000. After allowing in roughly 100 U.S. troops, he cancelled plans for additional U.S. military construction corps members to assist in the recovery efforts.

On the other hand, as late as 2002 Chávez still enjoyed interacting with the crews of visiting naval vessels, as this post by Chris Cavas, detailing a port call by the USS Yorktown (CG 48), and a declassified U.S. State Dept. Memo highlight. However, a mere 5 weeks later, the April 2002 coup would irreparably alter relations.

The U.S. military came under particular criticism from Chávez, both for allegedly – and without proof – directly aiding the coup attempt and subsequent espionage and coup-plotting efforts. Venezuela expelled a string of military attachés on these grounds, a tradition continuing to this day (see below). Chávez also followed up his words by severing most of the existing military ties between 2003-2005, including ending training-support missions and participation in the annual UNITAS naval exercise. It may have been his calculation that there was greater value in showcasing an external “imperialist” threat to shore up support, in the tradition of Vladimir Putin, than to maintain ties with the U.S. But whatever the reason, military relations after the coup were quickly curtailed.

In 2006, due to a lack of cooperation in anti-terrorism efforts, the U.S. followed suit by sanctioning arms exports to Venezuela. Despite these impediments, informal ties between the two militaries continued as the Venezuelan military backers of Chávez have reputedly been of a more pragmatic strain than their leftist civilian government counterparts.

One area of considerable focus has been counter-drug (CD) efforts. Despite the appearance of Chávez’s personal enmity, the U.S. Navy and Coast Guard have still managed in recent years to work with their counterparts, although this has reportedly been on a case-by-case rather than formalized basis. According to the GAO:

DOD allotted about $3 million for counternarcotics and related security assistance in Venezuela in fiscal years 2006 through 2011. Through 2009, this assistance was used in part to provide tactically actionable intelligence to both US and select Venezuelan law enforcement agencies.

CD efforts will continue to loom large as avenues for cooperation and potential sticking points if the next election returns a “Bolivarian” government. The Wall Street Journal reported this January that attempts to improve ties between the U.S. and Venezuela are hampered by

…allegations of high-level involvement by the Chávez government in drug trafficking. The U.S. has put seven top current and former Venezuelan officials on a Treasury blacklist for their alleged drug and arms dealing links to Colombian guerrillas based in Venezuela. Those links were exposed in 2008 after the Colombian military captured computers used by a guerrilla leader killed on a cross border raid in Ecuador.

Among the officials put on the Treasury list are Gen. Henry Rangel Silva, the former minister of defense who was recently elected governor of the state of Trujillo. Mr. Rangel Silva and the others say they are innocent.

Venezuela’s immediate future looks to be tumultuous and relations could in fact worsen. Vice President Nicholás Maduro moved to expel two American diplomats and claimed that Chávez had been poisoned with cancer by Venezuela’s “historical enemies.” This may have been mere posturing to aid power-consolidation for the immediate transition and new the elections that are constitutionally required to be held in 30 days – but it is a sign that things are far from certain to improve.

Despite today’s focus on Chávez’s death, however, the more meaningful impact on U.S.-Venezuelan naval and maritime efforts may have come from last week’s enactment of Sequestration. As Sam Lagrone describes, the forced budget cuts have dealt a blow to Operation Martillo’s CD efforts, suspending deployments to SOUTHCOM of U.S. Navy frigates USS Rentz (FFG-46) and USS Thach (FFG-43). Just as an opening may occur for increased cooperation in the next few months or years, the U.S. may not be able to take full advantage of it.

LT Scott Cheney-Peters is a surface warfare officer in the U.S. Navy Reserve and the former editor of Surface Warfare magazine. He is the founding director of the Center for International Maritime Security and holds a master’s degree in National Security and Strategic Studies from the U.S. Naval War College.

The opinions and views expressed in this post are his alone and are presented in his personal capacity. They do not necessarily represent the views of U.S. Department of Defense or the U.S. Navy.

Current Operations

Borneo Violence Escalates

March 6, 2013 Guest Author 2 Comments

Malaysian police search suspects leaving the security cordon in Sabah.

In the aftermath of Malaysia’s “Operation Sovereign,” I’ve got another update over at USNI News about the stand-off in Sabah between Malaysia’s armed forces and the followers of the self-styled Sultan of Sulu, including new naval developments. More news has come out since, with Reuters reporting Malaysian officials have found 13 bodies and detained several more followers during their post-op security sweep, although it’s unclear if the deaths occurred during our prior to the assault. As I sum up in the USNI Post:

Amid reports that more fighters had arrived despite the naval patrols, a fragile peace process in the Philippines, and an unsettled Filipino population in Sabah, the fears are not just that the violence will continue, but that the violence may spread.

At The Diplomat you can read some of the strange conspiracy hypotheses swirling around in the background of the stand-off.

Fostering the Discussion on Securing the Seas.