In The Economic Cost of Somali Piracy 2011, Anna Bowden and Shikha Basnet (2012) estimated the total cost of Somali piracy to the shipping industry in 2011 to be in excess of $6.6 billion (1), though a significant portion of this figure is based assumptions, rather than actual facts. Due to the space restrictions of this critique, the analysis is limited to only the piracy insurance aspect of the cost estimate (14). Accordingly, starting with the overall piracy insurance cost estimate, the authors created a “rough estimate” (15) for 2010 of $460 million to $3.2 billion. After some push-back from the insurance industry, they were able to acquire more data from multiple resources and revised the cost estimate at $635 million for the year 2011 (16). The authors assumed that the insurance resources were correct in their assessment that the cost estimate was in fact excessive. Bowden and Basnet stated they felt more comfortable with this new estimate to “further develop the precision of [their] study” (15). In reality, it is still an estimate. Using further assumptions, they derived at the new insurance cost estimate. …show more content…
In assessing the number of covered vessels and insurance premium discounts, they assumed that only 50% of the vessels in the piracy-affected region carry War Risk insurance. In addition, they assumed that 50% of those covered vessels would be granted a “no claim bonus” (premium discount) of 50%. Next, they assumed that only 50% of the estimated War Risk protected vessels had Kidnap and Ransom (K&R) insurance. For those who carried both policies, a 50% premium discount was provided. Finally, they assumed that 25% of the vessels had armed security guards onboard and considered a premium reduction of 30%. They applied at least four assumptions in the piracy insurance aspect alone during the computation of the Somali Piracy cost
Because of the "poverty, lack of employment, environmental hardship, pitifully low incomes, reduction of pastoralist and maritime resources due to drought and illegal fishing and a volatile security and political situation all contribute to the rise and continuance of piracy in Somalia.”6 For one thing the pirate trade is easy to do; there is no real fear of their targeted victims shooting at them, because “by International agreement, civilian vessels” cannot have guns.7 The money a pirate earns is great, and has made the pirates “the country's most eligible bachelors,” pirating has become “Somalia’s biggest industry.”7 In 2008, Sugule Ali, a pirate who was part of the seizing of MV Faina, a Ukrainian freighter packed with Soviet-made tanks, grenade launchers …etc. “demanded $25 million for its release told a reporter, "We only want the money."
Most people do not know this but piracy on international waters and on the coast of Somalia has become an increasingly important issue to global businesses. Since most people are unaware of this growing problem it has just now been noticed. To help stop piracy most crews are encouraged to have trained officers aboard while shipping cargo to avoid attacks by pirates. 95 percent of the piracy on international waters is by somali pirates. That’s right 95 percent. Piracy is robbery/stealing at sea. Not a lot of people are aware that piracy occurs almost everyday.
History generally depicts piracy as a radical system of violent practices and unconventional beliefs. This version of piracy is certainly more thrilling and romantic, and is arguably more entertaining, than the reality. Unbeknownst to most people, pirate society was a very well thought out system with strict rules, a judiciary body, and even social security benefits. In his book, Villains of All Nations: Atlantic Pirates In the Golden Age, author Marcus Rediker attempts to convey these truths and disprove the many common misconceptions surrounding piracy. He outlines the structure of pirate society as an egalitarian invention used to combat the unfair wages, mistreatment of workers, and poor labor conditions present aboard merchant vessels. In fact, pirate culture exemplifies the very beginnings of modern-day capitalism. Take, for example, the very promotion of freedom of the seas against the state monopolies that claimed ownership rights on sea routes. This capitalistic behavior would unknowingly contribute to today’s standards of a capitalistic society.
It costed nations millions of dollars in those days, and even more now. “ In March 2010, the average price for a geared 500-ton container ship was $10 million, while gearless ships of 6,500 and 12,000 TEU averaged prices of $74 million and $105 million respectively.” (UNCTAD). This here is just the cost of the ships. The merchandise they carry can cost hundreds of millions more on the largest of container vessels. This is obviously a huge target for any possible pirate and with poor countries like Somalia, the people there might see an opportunity for profit. Their tactics are nowadays is to hold the crew for ransom instead of taking the ship entirely. These ransoms can be upwards to tens of millions of dollars. Obviously, countries and companies don’t like losing millions of dollars to some young kids over in a third world country so they created a task force to stop them. “Combined Maritime Forces (CMF) is a multi-national naval partnership, which exists to promote security, stability and prosperity across approximately 3.2 million square miles of international waters, which encompass some of the world’s most important shipping lanes. CMF’s main focus areas are defeating terrorism, preventing piracy, encouraging regional cooperation, and promoting a safe maritime environment.CMF counters violent extremism and terrorist networks in maritime areas of responsibility; works with regional and
The origins of modern piracy can be traced back to the 17th century when European states began to commercially compete for trade routes via the high seas to exploit new markets for trade and resources. At the time oceans, lacked any regulation, law, and order. Countries such as England, France, and Spain hired pirate groups to attack enemy ships and steal materials that were found on board. This time period is often referred to as the Golden Age of Piracy, however, piracy continues to occur even today. In recent years, there has been a significant increase in the number of attacks on vessels by pirates, particularly in the Gulf of Aden, Somali Basin and the Indian Ocean.
During the 16th, 17th and early 18th centuries, piracy was rampant in the Atlantic, specifically in the West Indies. Piracy has existed since the earliest days of ocean travel, for a range of personal and economic reasons. However, one of the major reasons why piracy was wide spread and rampant in the 16th, 17th and early 18th centuries was Great Britain’s endorsement and usage of piracy as an asset; in wars fought in the New World. Great Britain with its expanding power and conflicts with other nations would make piracy a lifestyle and lay down the foundation for the Golden Age of Piracy and eventually bring what it created to a screeching halt.
To effectively analyze the effects of piracy we must look at three important aspects which are, most to least important, how pirates changed the “status-quo” of the Caribbean, the greatest pirates and bases, and finally the effect on European nations and the
The Somali pirates ask for ransoms not because it is how they have fun but because they have to. I do not condone these actions, but for some, this is the only way they know. Joanne Mariner says, “Millions of Somalis live in famine…”(15). These people can not afford to buy food, so the easiest way for them to make money is piracy. Also, the pirates will not continue with piracy if there is to of a risk. The money is needed, but will no longer be worth it when the penalty is death or imprisonment. According to James Carafano,”If piracy were not profitable at an acceptable level of risk to the pirates there would be little or no piracy,”(12). Even with the money, the pirates have turned to terrorist organizations for further financial advancement. For any of this to stop the United States must use
Piracy in Somalia has come about due to years of internal fighting and weakened government. With the overthrow of the president in 1991, Somalia has been a complete anarchy with only the laws of rival clans who have been in power. Though long before that the country has been in constant war between the people of the country because money and food have been always been scarce. Small amounts of money have been made through some exports but the real money came from the fishing off the coast. Recently because of the lack of laws commercial fisherman from all over the world have been over-fishing the waters and leaving the Somalis with too few fish to survive. European companies have used this lack of laws as a way to easily dump their
Unlike buccaneers in the past, many of these new pirates were concentrated around the Horn of Africa on the shores of Somalia. The 1991 civil war in Somalia, which overthrew the current system of government, left it to be a hub for nefarious actions. As the Somali government and its services began to diminish, many saw piracy as a way to escape the collapsing economy. One reporter stated that because of the chaos brought about from the failing government, “Somali waters have become the site of an international ‘free for all’” (Tharoor, 1). Prosperous harbors where a resident could have made a decent living became cesspits of pirate and criminal activities. In 2013, most of the
Are you concerned about pirate attacks on your ocean voyages? Although it may only seem like a good movie plot, the threat of piracy still exists. Nowadays, pirate incidents are often not covered in mainstream media. One researcher commented on the topic, saying that piracy has “…been romanticized in such films as Disney’s Pirates of the Caribbean” (Lunsford, “What Makes Piracy Work?”). Nevertheless, pirates have proved their aggressive behavior through history and their effects on society. Modern and past pirates share similarities and differences, and countries around the world are looking for ways to control the issue before it spreads.
For this reason, on December 5, 1989, the SNM Coast Guard seized a ship flying a Panamanian flag enroute to Berbera. This is a major port still in the hands of the loyalist troops of the Mogadishu Regime.” (IMO, 1989) This was just the beginning of Somali piracy. There have been several cases of piracy, all differentiated by the type of act that was performed. “Resource pirates” came to be after the complete collapse of the government. They include companies from Asia, Europe and Africa who are driven by the lure of Somalia’s unprotected rich fish resource. (United Nations Environment Programme, 2010) Defensive pirates came about in hopes to protect marine resources and to fend off trespassers. Most of them were formerly from the government’s coast guard. (Samatar, Lindberg, Mahayni,
Many people of Somalia find piracy to be acceptable. The reason being that it is for the good of others, others meaning them. Piracy had become their way of life. Had other nations reached out to Somalia, things would have been different. However, the world is harsh and cruel, and many would rather look after themselves than a stranger. Instead, nations began to trash the land of Somalia. The people no longer see a point in trying to gain profit through ‘morally’ correct manners, more so because their endeavors are fruitless. “It began with fishermen who were tired of foreign fishing fleets taking advantage of the instability in the country, dumping toxic waste and illegally fishing in the Somali waters. These activities hampered the economic, environmental and health of the country and its people” (Johnson). The people of Somalia
Currently, the pirates who operate off of the coast of Somalia are having a much harder time. The recent number of successful attacks has declined due to “better
In recent years, internet piracy or "file sharing" of copyrighted material has gained much popularity. It has been the recent advances in our technology that has made it main stream in the eyes of the general public. “Film makers, record companies, and many other entertainment industries suffer from billions of dollars in lost profits every year… this loss comes as a direct result of internet piracy” (Cherry 1). There is rising debate on the issue of file sharing as an unethical crime. Many consider it to be no different than downright theft. But are internet pirates being looked upon like criminals? For years, American authorities have made numerous attempts to stop piracy in its tracks. However, many court cases involving software theft have shown that not all pirates are being punished equally. With piracy becoming a rising issue between American authorities, it