Pirates: those cartoonish Caribbean characters found across children’s toys, pop culture, and the entertainment industry. In most people’s minds, pirates invoke a harmless, fleeting fantasy of Jack Sparrow and the Pirates of the Caribbean franchise. But for thousands of sailors around the world, pirates are deadly criminals capable of wreaking enormous havoc. The U.S. Department of State actively communicates the threat of piracy to citizens traveling internationally. The practice of piracy poses significant threats to maritime trade, international security, and the global economy.
Operating from shore, pirates frequently threaten cargo ships, cruise lines, and private vessels through armed robbery, kidnapping, and hijacking. In 2017, piracy in East African waters resulted in $1.4 billion of economic damages, including ransom payments, disruptions to trade routes, and theft. With 54 incidents affecting over 1,100 seafarers, firms in 2017 spent $300 million on contracted security in East Africa to protect their ships. In the same year, regional governments invested $200 million in naval activities intended to deter and fight piracy. In 2019, there have already been fifteen attacks on commercial vessels by pirates in West Africa, Central America, East Africa, Southeast Asia, and China.
Unlike the seafaring societies depicted in Hollywood films, pirates are often based on the shores of developing nations with weak economic infrastructure and low government regulation. An especially present threat is Somali piracy, which has accounted for over half of worldwide piracy events in recent years. Somalia, a coastal state, has primarily been run by regional clans and tribes without a central government, leaving no authority to enforce or prosecute maritime crimes within the region. With ransoms in the millions of dollars and average wages around $2 per day, many young men have decided to embrace a life of piracy.
In response to a rising tide of piracy and armed robbery at sea in the past two decades, governments and NGOs have developed task forces to protect maritime commerce and safety. As global authorities and organizations like INTERPOL have coordinated their maritime safety efforts, piracy has decreased or stabilized in most areas around the world. Businesses engaging in commercial shipping through pirate-infested waters have begun to establish basic security protocols and armed guards as industry standards, with the costs reflected in their shipping charges.
As international enforcement efforts grow and the governments of developing nations stabilize, the threat of piracy is expected to decline and to release its grasp on international commerce over the coming years. The projected decline of piracy is expected to allow firms to reduce their expenditures in counter-terrorism measures, instead opting to pass on savings through their supply chains. However, the potential for the resurgence of piracy or external threats should be considered as firms evaluate their future transportation needs.
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