January 22, 2011

The increasing cost of fighting pirates

Filed under: Africa, Middle East, Military — Tags: , , , , — Nicholas @ 11:51

Far from solving the problem of piracy in the Indian Ocean, the costs have increased dramatically:

The Somali piracy problem is not going away, despite years of efforts by an every-growing international anti-piracy patrol off the East African coast and the Indian Ocean. Since 2005, the average ship (and crew) ransom has increased over ten times (from $150,000). Thus overall cost of Somali piracy has increased to more than $5 billion a year. Most of the cost is from addition expenses for ships staying at sea longer as they avoid going anywhere near Somalia. This has cost Egypt over 20 percent of the traffic through the Suez canal, which amounts to over a billion dollars a year in lost revenue. The anti-piracy patrol costs nearly a billion dollars a year, but most of the extra costs hit the shipping companies, and their customers, who pay more for ships spending more time at sea, or the expense of additional security measures.

The problem is that piracy is a gamble, but a better gamble than anything else on offer for would-be pirates. A small vessel, a crew willing to fight, and some inexpensive weapons can be translated into a multi-million dollar jackpot. International navies on patrol rarely do more than scare off attempts, so the risk to the pirates is still low even when a patrol is in the area. Given the situation on land, it is logical for pirates to continue attacking ships passing the Somali coastline.

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