News / Africa

Study: Piracy Costs World Up to $12 Billion Annually

In this image provided by the U.S. Navy, the guided missile frigate USS Nicholas steams through the Atlantic Ocean, 7 May 2006 (file photo)
In this image provided by the U.S. Navy, the guided missile frigate USS Nicholas steams through the Atlantic Ocean, 7 May 2006 (file photo)
Michael Onyiego

As attacks in the Indian Ocean continue, a new study estimates Somali Piracy to cost the international community billions of dollars every year.

With piracy on the rise worldwide, a United States think tank is attempting to measure the toll it is taking on the international economy. Colorado-based think tank One Earth Future has released a report which estimates the cost of piracy in 2010 to be between $7 and $12 billion worldwide.

While available data from areas such as West Africa and the Malacca Strait in southeast Asia have been included in the groups accounting, the bulk of the cost of international piracy stems from hijacking committed by Somali pirates.

The Associated Press has reported that at least 28 ships and 660 crewmembers are currently being held in Somalia. 2010 saw a spike in ransom prices, with some ships, including the South Korean Samho Dream being released for a reported $9.5 million ransom.

But according to report author Anna Bowden, ransoms are only one of the many costs created by Somalia’s pirates.

"A number of ships will not go through piracy zones right now," said Bowden.  "They’ll actually reroute around the coast of Africa, via the Cape of Good Hope. Costs there are about $2.4 to $3 billion per year. Other costs are security equipment, insurance premiums and so on. There are also costs to government that we need to remember.  There are costs of naval forces.  There are also costs of prosecution, as well as anti-piracy organizations."

A cost of $12 billion per year may seem low, but Bowden emphasized the figure was a conservative estimate which could potentially increase. The analyst told VOA the number was likely deflated by the worldwide economic crisis; Bowden expects that figure to increase as international shipping rebounds.

Bowden’s report is more than just a calculation. The study is part of One Earth Future’s Oceans Beyond Piracy Project. The system used to estimate the cost of piracy was developed as an open-source model which will allow the international community to contribute data and more accurately estimate the crime’s global impact.

Meanwhile it has been reported that six crewmembers of the Danish vessel M/V Leopard have been kidnapped while transporting weapons in the Gulf of Aden Thursday. The Leopard was found floating empty by NATO forces and it is believed the crew is being held aboard a Taiwanese ship also captured by Somali hijackers.

You May Like

For Lebanon-based Refugees, Desperation Fuels Perilous Passage

In a war that has caused an estimated three million people to flee Syria, efforts to make perilous sea journey in search of asylum expected to increase More

South African Brewer Tackles Climate Change

Mega-brewer SAB Miller sent delegates to climate summit in Peru, says it is one of many private companies taking their own steps to fight climate change More

Indonesia Reports Increase in Citizens Joining Islamic State

Officials say more than 350 of its citizens are now in Syria or Iraq to fight with Islamic State - 50 more than last month More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Refugees Living in Kenya Long for Peace in the Home Countriesi
X
December 16, 2014 2:14 PM
Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.
Video

Video US-China Year in Review: Hong Kong to Climate Change

The United States is pushing for a code of conduct to resolve territorial disputes in the South China Sea as it works to improve commercial ties with Beijing. VOA State Department correspondent Scott Stearns reports on a year of U.S. policy toward China from Hong Kong to climate change.
Video

Video Japanese Leader’s Election Win Raises Potential for Conflict with Neighbors

Japan’s Prime Minister Shinzo Abe and his allies easily won a two-thirds majority in parliament Sunday, even though the country has slipped into recession under his conservative policies. VOA’s Brian Padden reports from Seoul, that the prime minister’s victory will empower him to continue economic reforms but also pursue a nationalist agenda that will likely increase tensions with Japan’s neighbors.
Video

Video Nuba Mountain Families Hide in Caves to Escape Aerial Bombings

Despite ongoing peace talks between Sudan's government and the rebel Sudan People’s Liberation Movement-North, or SPLM-N, daily aerial attacks continue in South Kordofan province’s Nuba Mountains. Adam Bailes was there and reports for VOA that government forces are targeting civilian areas, rather than military positions, with their daily bombardments.
Video

Video Indonesian Province to Expand Sharia Law

Indonesia has the world’s largest Muslim population and a legal system based on Dutch civil law and Indonesian government regulations. But in a 2001 compromise with separatists, Aceh province in Sumatra island’s north was allowed to implement Sharia law. Since then, religious justice has become increasingly strict. VOA correspondent Steve Herman reports from Banda Aceh.
Video

Video Some Russian Businesses Thrive in Poor Economy

Capital flight, the fall in oil prices and Western sanctions are pushing Russia's staggering economy into recession. But not companies are suffering. The ruble’s drop in value has benefited exporters as well as businesses targeting increasingly frugal customers. VOA's Daniel Schearf reports from Moscow.

All About America

AppleAndroid