Yemeni Pirates Aren't Cuddly
Children around the world love playing as pirates with bandanas on their heads and with toy characters walking the plank. It all seems very cute from afar, until they ask, "Do pirates exist today?" Recent events in Yemen have shown that pirates do indeed live now as the country’s civil war moves into its 10th year. Many large ships have chosen to navigate through the Cape of Good Hope instead of the Suez Canal to avoid these pirates. It's not so cute anymore.
These headlines have suddenly made the world aware that Yemen’s civil war, a proxy war between Iran and Saudi Arabia, has rendered the country extremely violent since 2014. Indeed, the conflict has been as serious as the wars in Ukraine and Afghanistan, even though few hang Yemeni flags off the front porch. The graphs below show deaths from political violence per billion population per month for the conflicts in Yemen, Afghanistan, Ukraine in more recent years. Time to get a Yemen flag for the porch?
The Yemeni economy plummeted after the civil war began. In Thomas Hobbes’ famous paragraph describing life being “brutish” and “short” during civil war, he also discusses the challenges of business during such a period: “in such condition, there is no place for Industry; because the fruit thereof is uncertain.” This can be seen in the comparison of Yemen's imports in USD over time with those of Saudi Arabia (a country decidedly not in civil war), providing some perspective on the history of the conflict. Yemeni imports have stabilized in the last few years at this lower level.
Looking at countries like Egypt, UAE, Morocco, Oman, and Saudi Arabia, each country has experienced a very different pattern of political violence over the last 10-20 years. The data are scaled to deaths from political violence per billion of the population, measured quarterly, making the countries comparable. The bloody headlines do not represent the same experience in each country.
The tone of the press these days suggests as if the flare-up in Yemen is brand new and decidedly worse than at any time in the recent and distant past. That isn’t the case. Yemen has been experiencing significant violence for about a decade now. Surely the various conflicts threaten to spread into something wider. But each country is unique with its own history, culture, borders, and political legitimacy, some decidedly more stable than others.
This document is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase any securities or investment advisory services. I am the Portfolio Manager of Barca Capital, LLC, but the views I express are my own not necessarily those of my firm.