Piracy costs global economy $7-12 bln a year: study

Thu Jan 13, 2011 3:29pm GMT

By Peter Apps, Political Risk Correspondent

LONDON (Reuters) - Maritime piracy costs the global economy between $7 and $12 billion a year, researchers said on Thursday, with Somali piracy in particular driving up the cost of shipping through the Indian Ocean.

Sailing from Somalia's coasts in fragile skiffs armed with AK-47s, ladders, grappling hooks and little else, Somali pirates were judged responsible for 95 percent of the cost.

Meanwhile, occasional attacks on ships continue in the Gulf of Guinea, Nigeria and Malacca Straits.

The report -- presented at London foreign policy think tank Chatham House -- said there had been some 1,600 acts of piracy since 2006, causing the death of over 54 people.

It looked at the cost of ransoms, added insurance premiums, rerouting of ships, naval patrols, security equipment, piracy prosecutions and other indirect costs including increased food prices in East Africa from higher delivery costs.

"Some of these costs are increasing astronomically," said researcher Anna Bowden from the Colorado-based think tank the One Earth Future Foundation, which conducted the study.

"What is even more concerning is that all these are simply treating the symptoms. Almost nothing is being done to treat the root cause."


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