Somali Pirates Cost the World Economy Billions

According to a renowned consultancy company in the US, piracy in the Arabian Sea and adjacent waters cost the international community up to 8.3 billion Dollars in 2010.

The consultancy company Geopolicity writes in a recently published report, that in 2010 the damage to the world economy inflicted by Somali pirates was between 4.9 and 8.3 billion US-Dollars. At the same time, the pirates generated a total income of up to 238 million Dollars. Assuming there are about 1,500 pirates active in the area, that would mean that each pirate could earn as much as 400,000 Dollars during a 5-year career! The next-best (legal) choice to create an income would earn a man 14,500 Dollars – in an entire working life!

The forecast looks even worse: Geopolicity calculates, that by 2015 the world economy will sustain damages inflicted by Somali pirates in the region of 15 billion Dollars annually. The number of pirates will grow by 200-400 every year based on a demand analysis and the problem will spread – if unchecked – from the Arabian Sea, the Gulf of Aden and the Gulf of Oman to include all major African, Middle Eastern and Pacific Rim maritime systems. In 2011 the pirate’s attacks already covered the entire western part of the India Ocean.

The number of attacks is also rising steeply: in the year 1991 the number of reported incidents in African waters was zero, in 2000 it was 68 and last year 258 incidents were reported. By April 2011 already 150 attacks had happened and if the development continues like this, 600 attacks might happen during 2015!

But it would be wrong to assume that the piracy problem is only located in Somalia. True, the most powerful groups engaged in piracy are operating out of that country. But people who provide financing and/or getting profit from piracy can be found worldwide. The Geopolicity report specifically points to financiers in Lebanon and the UAE as well as criminal gangs in Yemen.

With Institutions like the Combined Maritime Forces, EU NAVFOR Somalia and others the international community already tries to tackle the problem. Navies from more and more countries take the gloves off when dealing with the pirates in open water (rumor has it that the Russians simply shot a group they captured last spring). But the increasing use of  force only deals with the symptoms without addressing the cause of the problem: the political anarchy and the poverty in Somalia.

(Sources: Geopolicity, Middle East & Balkans News own research; 15 July 2011)


About Johann Brandstätter

Photojournalist and documentary photographer based in Bulgaria, working mainly in the Balkans and the Middle East. Conflicts & crises, social and environmental issues, defense & military, travel, transportation.
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2 Responses to Somali Pirates Cost the World Economy Billions

  1. Pingback: Zwei Schiffe im Roten Meer von Piraten angegriffen « Nahost & Balkan News

  2. berlink1 says:

    Well done blog site! Our Senior Fellow, Dr. Andre Le Sage has just written two papers on issues in Africa. We welcome you to visit to see them. Thank you, Kimberley Berlin, Outreach and Communications for INSS.

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