The cost of Somali piracy to the global economy fell 13 percent last year to about $6 billion as the increased presence of navies and private armed guards deterred attacks, according to a non-profit foundation.
The economic cost was between $5.7 billion and $6.1 billion, compared with $7 billion in 2011, according to Oceans Beyond Piracy, a project of the Broomfield, Colorado-based One Earth Future Foundation. Hijackings dropped 50 percent and attempted attacks fell more than 70 percent, the organization said in a report today.
Private security was the biggest source of costs, accounting for 29 percent, according to the report. About 50 percent of ships in the region used armed guards last year, up from 30 percent in 2011, causing spending to almost triple to $1.53 billion, the organization estimated. Industry is bearing more than 80 percent of the costs and 99 percent is spent at sea, with little investment in a permanent solution in Somalia, according to the report.
“The money spent fighting pirates at sea has started to pay off,” Jon Bellish, the report’s author, said in a statement. “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.”