Piracy and the Global Economy
With the ever-increasing rise in maritime piracy - what is the impact on the global economy?
A study by the One Earth Future (OEF) Foundation calculated the cost between $6.6 to $6.9 billion per year in 2011.
With approximately 80% of world trade currently travelling by sea, seaborne trade has doubled every decade since the end of the Second World War and this represents over approximately 93,000 merchant vessels, 1.25 million seafarers and nearly 6 billion tons of cargo.
Some factors contributing to the overall costs of piracy :
- Ransom: 2011 saw 31 ransoms being paid to Somali pirates totalling around $160 million. Average ransom was approximately $5 million.
- Insurance: The total cost of war risk and K&R insurance was approximately $635 million in 2011.
- Cost of Re-Routing: an estimated $486 to $680 million per year is spent on re-routing ships to avoid piracy each year.
- Security Equipment and Guards: Ship owners have more obligations to protect their property and crew from attacks by preparing their ships with security equipment and/or personnel prior to transiting the high risk areas. The reported cost deterance to the shipping industry as calculated by the OEF Foundation is between $1.06 to $1.16 billion per year.
Latest News and Alerts
- Piracy and Armed Robbery Against ships
- +++ Vessel Attacked +++
- Gulf of Guinea wants convergent laws on piracy
- Warning as pirates buy Libyan arms
- Lost in Translation?
- West African Pirates
- Potential Impact on Senegal by Foreign Fishermen
- Don’t Play Politics with Maritime Security – Agaba
- Arabian Sea / Greater Somali Basin – Piracy Activity
- +++ Dhow Hijacked 26/03/2012 +++
