Ransoms bring wealth to Somali pirate bases

A video grab from an undated television footage shows pirates walking on the beach in the town of Eyl in the north of Somalia, November 20, 2008.

BOSASSO, Somalia (Reuters) - As dawn breaks over the Indian Ocean each morning, elders in Somali pirate bases sip strong coffee and clutch mobile phones to their ears, eager to hear the latest from the gunmen out at sea.

Have any more ships been hijacked or ransom talks concluded? Any news of the Western warships hunting them?

Last weekend's spectacular capture of a Saudi Arabian supertanker loaded with oil worth $100 million has jacked up the stakes in what is probably the only growth industry in the failed Horn of Africa state.

Massive ransoms have brought rapid development to former fishing villages that now thrive with business and boast new beachside hotels, patronized by cash-rich buccaneers who have become local celebrities virtually overnight.

Investors have been attracted from around Somalia.

"There are some 'pirates' who never shoulder a gun or go out into the ocean, but they own boats which earn them a hell of a lot of money," gang member Bashir Abdulle told Reuters by phone from Eyl, the most notorious of the pirates' strongholds.

Just three years ago, maritime security experts estimated there were just five Somali pirate groups and fewer than 100 gunmen in total. Now they think there are more than 1,200.

Some analysts trace the gangs' roots to ties forged with criminal networks across the Gulf of Aden in Yemen during years of people-smuggling operations.

Others say the buccaneers began life as a rag-tag "coast guard" formed by elders enraged by European fishing fleets illegally trawling Somali territorial waters for tuna, and even more clandestine craft dumping deadly toxic waste on its shore.

LINKS TO REBELS?

But the biggest lure now, of course, is the vast ransoms being paid for captured ships. Kenya says it thinks the pirates have received more than $150 million this year alone.

Many young men who used to work as bodyguards and militia fighters for Somalia's many warlords and feuding politicians have quit with their guns to chase the rewards available out on the waves.

And most worrying for the international community, some analysts see links between the pirates and Islamist militants who control Somalia's south and are advancing slowly on Mogadishu.

In some areas, residents say the pirates are the only ones allowed to defy night time curfews imposed by the Islamists.

For their part, militant leaders deny any connections and have vowed to attack the gang holding the Saudi supertanker in retaliation for their hijacking a "Muslim" ship.

Russia has proposed raiding the pirates' land bases such as Eyl, but the NATO alliance has said African nations must take the lead. Few in the gunmen's strongholds showed any fear.

"I know piracy isn't good, but if it wasn't for them I wouldn't be able to make a living," shrugs Kadija Duale, a mother of four in Eyl. She sells the gunmen $3 cups of tea on credit, then collects when they receive their share of ransoms.

A kilo of khat, a popular mild narcotic plant, now costs $65 in Eyl, compared with $20 elsewhere, thanks to pirate demand.

Eyl is in the semi-autonomous northern province of Puntland -- whose main port is Bosasso -- though the Saudi ship is being held further south in Haradheere port, another center of piracy.

As the profits from the crime wave draw in businessmen from around the country, residents in the pirate's coastal bases -- and some inland towns -- have seen development in recent months that is unprecedented in their anarchic nation.

Abdiqadir Yusuf Ow Muse, the Eyl chairman, said his village had existed since 1927, but had long been only a tiny fishing community. This year, he told Reuters, all that had changed.

"Now it's a district with almost all facilities you would expect, because of the convergence of rich pirates," he said.