The Economic Cost of Somali Piracy - 2012 Report

April 2013

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A report detailing the overall economic cost incurred worldwide from Somali piracy has recently been released by Oceans Beyond Piracy (OBP), a project of One Earth Future Foundation.  

According to Jon Bellish, author of OBP’s Economic Cost of Somali Piracy 2012: “The report shows that the money spent fighting pirates at sea has started to pay off. Activity is down, but even with the lower number of attacks reported in 2012 there was very little movement of resources toward investing in the long-term solution ashore.”

This year’s most compelling findings include:

  • Overall Cost of Somali maritime piracy to the global economy has dropped slightly from $7 Billion in 2011 to $6 Billion in 2012
  • Numbers of successful highjackings on ships down significantly
  • Cost of Armed Guards has increased dramatically

While the numbers of attacks and hostages held by Somali pirates are down significantly, those who continue to be held face deplorable conditions.  The report shows that even with notable gains at sea – achieved mostly by private armed security guards and by aggressive naval activity – the overall cost to the international community remains considerable.  The report estimates an overall cost for 2012 to be close to US $6 billion, a fall of about US $1 billion from 2011.  But when considered in relation to the lower number of piracy attacks in 2012, the cost to prevent each attack has gone up significantly, notes the report.  

BIMCO Deputy Secretary General Michael Lund commented: “The findings of the report underscore the importance of the continued focus of Government and Shipping Industry stakeholders on combating piracy, and it also illustrates well that problems like the Somali piracy problem can grow extremely costly over time. The implied lesson learned is that there is every reason to tackle similar upcoming problems swiftly and with early determination to avoid the problem becoming institutionalized and to minimize the cost of restoring law and order afterwards.”

The report, together with a summary, can be viewed and downloaded below with kind permission of the One Earth Future Foundation which sponsors the Oceans Beyond Piracy Project.

Based on Oceans Beyond Piracy press release of 9 April 2013