Somali piracy costing international community billions

by Alister POOLE on May 13, 2011

Piracy off the coast of Somalia costs the international community around $8.3bn a year, according to a new report published by the Geopolicity consultancy.

This sum might reach $13-15bn in the next four years 2015, it says while also calculating that a pirate is able to earn anything up to $79,000 per year. The report warns that considering the supply and demand there is for pirate services, plenty of room to expand is vacant.

Geopolicity, a specialist in economic intelligence, forecasts annual increases of 200-400 with regards to the number of pirates currently operating off Somalia’s coast. Piracy in 2010 cost between $5bn and almost $8.5bn, it estimates, with the effects on trade volume taken into account. This is the mentioned expanding area that pirates operate in and more sophisticated tactics are having to be employed to combat them. The risks of piracy are becoming a problem across the waters that belong to African and Mediterranean countries as well those on the Pacific Rim, it warns.

Total income for pirates was $75m-$238m last year, the study says. It highlights pirates’ earning potential in an impoverished nation where there are few other opportunities, as well no government or rule of law. While individual pirates might earn $33,000 to $79,000 per year, the next best job in Somalia only brings in $500 per annum, or $14,500 when stretched out over a lifetime.

While pirates have targeted lucrative cargo ships, rich tourists on yachts have also been taken hostage and held ransom on a regular basis.

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