Why Piracy Matters

Why does the failed state of Somalia (along with the failure of the world to recognize the independence of Somaliland) matter to the world? Why should the world care about the failure of nations like Somalia and Indonesia in integrating themselves into genuinely united federal nation-states? A big part of the answer is piracy, a subject of considerable interest on this blog [1] [2] [3] [4] [5]. Those of us who (like myself) are interested in trade and logistics are often concerned about the threat of piracy and its results on supply routes, prices, and other related matters.

As it would happen, I came across a website that explored the phenomenon of piracy in a particularly beautiful way [6], and I thought it worthwhile to share its graphic with my readers:

The Impact of Somali Piracy
From: Travel Insurance Guide

And now, for some commentary: 237 ships were targeted by pirates last year, and 28 were successfully hijacked. This means that a ship has between an 80-90% chance of successfully fighting off/avoiding a hijacking, but also means that almost a ship a day is attacked somewhere in the world by pirates today. The last three years have been particularly bad for piracy, a big reasons why the subject is of interest to many people (myself included). The rise of piracy, especially in key geopolitical spots, makes for fragile trade routes and that endangers the well-being of those nations and cultures and businesses (and people) who depend on far-flung supply lines.

Among nations, it is no surprise that the #1 national origin of captured pirates is Somalia and Puntland, with almost 30% of the total of 1,069 arrested pirates. India (!) is number two, Kenya (!!) is number three, Yemen (no surprise there) is number four, and Somaliland comes in at number five. Perhaps this suggests another reason why Somaliland has been so strong against piracy, as standing against piracy is away of preserving its own internal control of its territory as well as a way to ensure greater trade wealth into Berbera (and maybe even Zeila). It is a wonder that Somaliland and Puntland have not seen the benefits of this solution yet.

If you get hijacked by pirates, the odds are that no one is going to be seeing you for a while. The average length of a hijacking situation is 6 months, with an average ransom of $4.7 million per person, paid by dropping waterproof containers of American dollars into the ocean near the greedy and bloodthirsty pirates. I can’t say that anyone thinks my own life is worth $4.7 million, so I just hope I never get hijacked. Not surprisingly, pirates like to hijack or attack cargo ships (because that’s where the loot is), but there are some surprises. Bulk carriers attract 26% of pirate attacks, Fishing vessels (are the pirates that hungry or are the defenses weak?) 18%, chemical tankers (!) 15%, oil tankers 15%, general cargo vessels 11%, and “other” at 15%. Pirates apparently like food and loot and tend not to attack highly armed vessels, largely because they are looking for easy pickings. None of this ought to be surprising.

The biggest reason why piracy is kind of a big deal is that piracy is expensive. Nearly $7 billion were spent because of piracy. To put this in some comparison, the rent-to-own industry in the whole United States is worth about $7 billion [7], as is the forestry industry in Ohio [8], and the surfing industry in the United States [9]. This is how much Somali piracy alone costs, and that’s a very large costs. There’s a lot you can do with $7 billion. I might even be able to make a dent in my college loans with that kind of money. The $7 billion cost of piracy is spread rather unequally among the following expenses: the biggest is the increased fuel costs that result from increased ship speeds as ships try to outrun the pirates and waste gasoline, next comes military expenses as thirty nations (including the US, Germany, India) fight against pirates in one way or another, then travel insurance, then the time and fuel spent in re-routing ships around danger areas, then increased hazard pay for logistics employees on ships, and then finally a few percent for ransoms for the unlucky souls hijacked by pirates. Quite frankly, I’d rather spend my money on other things.

We ought not to think that piracy is purely a Somali problem, though. Even though the Indian Ocean and Gulf of Aden around Somalia and Yemen is the biggest pirate hotspot by far, extending down into Kenya and Tanzania, the world boasts a couple other somewhat notable pirate havens. Indonesia has some significant pirate bases in Sumatra and Borneo as it struggles to keep a unified hold on its Java-based nation state. Indonesia’s problems, slightly less severe than Somalia’s, have still resulted in its coastal territory (including the critical Strait of Molacca) being a notable pirate chokepoint. Likewise, the Gulf of Benin and Nigeria itself are a somewhat signifiant pirate base, unsurprising when we think of the poor state of unity within Nigeria and other West African states. The South China Sea (Chinese pirates?), Mediterranean Sea (off the coast of Egypt and Libya), and South America (plenty of corrupt and unstable regimes there) attracted a few pirate attacks. Wherever geography (such as a giant canal) and weak or corrupt governments than turn a blind eye to theft and piracy combine, we can expect pirates to be found. And that is the case.

The larger question is, what do we expect to do about it? Piracy is one of those problems that requires a significant source of solutions. People must have a respect for the property of others, and that respect is generally lacking in countries like China, and even to a certain extent in the West. This respect for property is essentially a moral concern. There are also economic concerns, as the areas where piracy is most prevalent (Somalia, Yemen, West Africa, and Indonesia) are not particularly wealthy societies, even as piracy undermines the development of more beneficial trading relationships in those places. We need to fight against piracy, but also replace it with mutually beneficial business that offers economic opportunity to those whose level of moral development has reached the level where they see that respecting the property rights of others helps encourage others to respect their own property rights in their own territory. Mutual reciprocity in such matters can only be a good thing. But changing hearts and minds is not likely to happen overnight. It will certainly take years, even generations, if we desire to do it correctly.

[1] https://edgeinducedcohesion.wordpress.com/2012/03/29/somaliland-update-establishing-sovereignty-german-anti-piracy-solution/

[2] https://edgeinducedcohesion.wordpress.com/2011/04/03/somaliland-update-anti-piracy-efforts-tax-codes-important-meetings-war-crimes-ssc-surveillance/

[3] https://edgeinducedcohesion.wordpress.com/2011/02/23/id-rather-be-a-ninja-than-a-pirate/

[4] https://edgeinducedcohesion.wordpress.com/2011/02/19/somaliland-update-norway-aids-somaliland-anti-piracy-efforts/

[5] https://edgeinducedcohesion.wordpress.com/2011/01/25/somaliland-update-student-ambassadors-and-pirate-prisons/

[6] http://www.travelinsurance.org/impact-of-somali-piracy/

[7] http://www.rtohq.org/apro-rto-industry-overview.html

[8] http://www.ohioview.org/wp-content/uploads/forestfacts.pdf

[9] http://www.forbes.com/forbes/2012/0507/technology-surf-michael-stewart-environment-when-green-is-rad.html

About nathanalbright

I'm a person with diverse interests who loves to read. If you want to know something about me, just ask.
This entry was posted in Somaliland and tagged , , , , , , . Bookmark the permalink.

15 Responses to Why Piracy Matters

  1. Thank you for sharing this typographic layout on explaining the impact and the trends of piracy, very interesting!

  2. Pingback: Why Piracy Matters | Piracy Watch

  3. Great article and well covered.

  4. Pingback: Non-Book Review: Aboard The Pirate | Edge Induced Cohesion

  5. Pingback: The Power Of Empty Spaces | Edge Induced Cohesion

  6. Pingback: A Modest Proposal For A Plebiscite To Resolve The Status Of The Republic Of Somaliland | Edge Induced Cohesion

  7. Pingback: Book Review: Stalling For Time | Edge Induced Cohesion

  8. Pingback: I Came Not To Bring Peace, But A Sword: Some Thoughts On China’s Rise | Edge Induced Cohesion

  9. Pingback: Book Review: Ninety Percent Of Everything | Edge Induced Cohesion

  10. Pingback: Book Review: Large Family Logistics | Edge Induced Cohesion

  11. Pingback: Audiobook Review: Thomas Jefferson And The Tripoli Pirates | Edge Induced Cohesion

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s