The Cost On Land As Well As At Sea
For all the attention Somali piracy has attracted, not least from the armada of warships keeping watch over the Indian Ocean and the Gulf of Aden, the total cost to the world economy appears to have been underestimated
The Cost On Land As Well As At Sea
By D.H., The Economist
For all the attention Somali piracy has attracted, not least from the armada of warships keeping watch over the Indian Ocean and the Gulf of Aden, the total cost to the world economy appears to have been underestimated. Shipowners, insurers and a handful of middlemen reckoned it was draining an estimated $53m a year in ransom payments.
Similarly, governments in the region noticed they were losing millions more by getting fewer tourists and catching less fish. A report published earlier this year by Oceans Beyond Piracy, an American non-profit organisation, estimated the total cost to have been around $6 billion in 2012.
But the World Bank has now put an annual price on piracy, during its surge between 2005 and 2011, of $18 billion. That is equivalent to the Somali buccaneers imposing a tax of just over 1% on all the ships passing through the waters they prowled.
Hence the economic sense in fixing the problem. The crisis is not as acute as it was. The number of attacks on ships peaked in 2011 at 243. That was down to……[access full article]
