We all have heard about this concept; either from popular media such as films and word-of-mouth thus have our understandings of what it may be. Some assume that a black market is where terrorists and mercenaries get their arsenal while pirates trade their loot to other visitors; mostly the aforementioned, refugees and low-class people. However, this is mostly a stereotype representation that a good number of us has seen in fiction and news media therefore, while exceptions are surely in abundance, it is important to delve into the black market dichotomy. The black market relates to “parallel” economy as it disregards all state regulations along with being encouraged by local instability (wars, natural disasters and revolutions) which is a prominent factor in today’s maritime landscape.
The maritime industry has always made significant contributions to transport/freight of commercial goods as well as natural resources therefore relates to the exchange of goods on an international basis. Black markets, thus relate in ways that they tie into the globalisation business much like shipping.
Firstly, it is important to consider that black markets specialise in rare goods that are either in scarcity or hard to obtain for certain reasons; rare goods command high prices and interest. Black markets, as establishments are illegal for many reasons (no trade license, criminal records of owners and traders etc) therefore making transactions illegal; however goods and services exchanged within are not necessarily outlawed. Along with this, black markets, obviously are more prominent in developing countries therefore are sources of income in places where job opportunities and economy is unstable and therefore less.
Knowing the above facts, we have established that black markets are an occupation which provides income for local people. However, the logistics by which the goods for sale are obtained hence giving way to smuggling, theft and borderline corruption; involving the shipping industry. Black markets also accommodate piracy (more as a bi-product of it) as a medium to sell loot as market for rare goods is always high; commanding respectable profit from loot.
Our exploration of black markets starts from piracy since most goods is plunder from commercial vessels; plunder includes resources such as oil and crew belongings. Recently, piracy was on the rise in West Africa (specifically Guinea) and this is due to the growing instability of the regional oil industry along with the general socio-political infrastructure; with oil companies displacing the communities to build their installations. Due to instability and associated with the local oil industry where pipelines are robbed thus oil not delivered; sometimes employees get kidnapped therefore proper channels not followed; extortion where oil companies are pressured for protection fees; Niger Delta conflict.
The above factors lead to the booming market for black market oil as the resource becomes harder and more expensive to obtain; leading to piracy/raids on oil tankers. This questionable availability of oil, a useful fuel source makes the black market useful for those in demand for it. However, black markets can not only be used by local communities but also those who pass by that location; including seafarers.
Black markets, knowing the above are a convenience for locals to make money delivering convenient services in that certain location. Instability especially helps the trade to grow since the economy and therefore job markets are limited to only those professions that are in demand. To compare to, a more developed nation which has a black market will attract more (higher income due to demand) therefore, legal businesses will suffer due to lack of employees.
Legal businesses can suffer also due to the affordable nature of black markets since goods are lower price than those legally-sold, however the rare goods can be more expensive due to their nature. This fact not only leads to legal businesses losing profits but also a potential for corruption is present since other seafarers can steal from their own vessels (fuel oil, cargo etc) for instant profit; which goes into their own pocket.
So far, black markets provide jobs in unstable regions along with goods not easily accessible in that certain region altogether. However, since the trade is illegal and not under any control from any entity which sometimes become criminal syndicates, it can have consequences affecting global maritime operations. Black markets, firstly create ground for piracy due to being the only place to sell loot and plundered goods; corruption is also a factor since profit from black markets is relatively attractive.
However, West Africa is not the only region where black markets and related logistics are prevalent as South East Asia has it in abundance. Enter cargo theft and pirate attacks where the former happens at ports and latter in Strait of Malacca and Singapore Strait; (125 pirate attacks reported in 2013) about 130,000 vessels arrive in Singapore each year. Knowing the above it is also possible to derive that such logistics maintaining black market merchandise flow increase prices for legal purchases to cover security, collateral and maintenance expenses for companies.
Finally, after exploring how black markets are represented and how they really affect the global maritime landscape it is possible to derive that black markets affect global economy with increasing prices and expenses along with the safety of seafarers due to increases in piracy and robberies. However, they are also a convenience in politically unstable regions where the local economy is crippled due to political struggles, wars or natural calamities. Black markets provide a medium to generate income in places where the job market is non-existent; especially during wars and political struggles where the most lucrative jobs would associate either with military or guerrilla fighters. The black market, however gives relatively safer jobs where requirements are only possession of rare or “interesting” goods.