A new assessment of escalating costs provides further insights

An article from Defence IQ provides more data on the growing piracy problem in the Indian Ocean and the effect it is having on local economies.  You can read the article here.

Here is a short summary of the data presented:

-         Number of global piracy attacks in 2009: 406 (highest number since 2003).

-         Average ransom paid: between $2M and $3M

-         Average cost of a hijack (to shippers): $1M.

-         Value of hijackings to Somali economy: $90M (to Nov 2009).

-         Number of nations contributing to naval anti-piracy forces: 20.

-         Average number of warships patrolling daily: 17.

-         Drop in attacks since patrolling began: 50 percent.

-         Number of cargo ships that transit yearly: 30,000 (= 80 daily (approx.)).

The article reports that a meeting of the East African Community Sectoral Council on Transport, Communications and Meteorology in Arusha, Tanzania, resulted in a declaration by ministers attending: “Piracy off the Somali coast is having a serious impact on the local economy and transportation.”  They urged all partner states to support anti-piracy efforts in the Indian Ocean.

The article also records complaints about the expense of the current naval-centric approach.  Thomas Countryman, Principal Deputy Assistant Secretary of Political-Military Affairs with the U.S. State Department, is quoted as saying: “The locus of pirate activity has shifted and we are trying to deal with it.  It's expensive, and that's why we feel strongly the need to pursue the lowest-cost options to deter piracy. Defensive measures taken by ship owners and crews are the lowest-cost and most-effective way to deter pirate attacks.”

Another article in Defence IQ, entitled “Security Companies Cash In on Anti-Piracy Operations,” reports: “However, these criminals have become bolder, as well as better armed and equipped, so attacks have grown dramatically both in number and ferocity.”

The great value of the gains from piracy means that the revenues are now a ‘vital interest’ to the sub-national forces in Somalia.  They will continue to innovate, escalate the use of force, improvise and operate further a field to continue the flow of cash.  Secretary Countryman’s comment that “defensive measures taken by ship owners and crews are the lowest-cost and most-effective way to deter pirate attacks” is a not-too-subtle declaration that the rising cost of naval operations to counter a criminal activity could be reduced or prevented by adequate commercial operators.  The dynamic tension over whose responsibility it is to counter pirates is now clearly stated.

The third party in this relationship is the global consumer public.  The cost will be passed along, either in the form of increased taxes or rising commodity prices, or both, if one or the other, or both, of the operational players decides that piracy is no longer their problem.

Regionally, the consequences could be much more serious than increased costs.  The meetings in Tanzania are clear indications that the local effects of piratical attacks against the sea transportation system are straining already fragile local economies.  The support for anti-piracy operations from the regional partners could take many forms and should increase as the realization that their own vital interests are at stake.  Whether this situation escalates into a regional conflict remains to be seen, but the understanding that vital interests are threatened indicates that the potential for such an outcome has heightened.

Tactically, the prospects for incidents of violence are also increasing.  As the seriousness of the situation for the global and regional actors rises, the likelihood of the use of force increases.  The pirates are clearly increasing their tactical capabilities and the naval forces in the region are increasing in number.  At some point, the efforts by both sides to deter and intimidate will become a provocation.  The question then becomes: “Which side will resort to violence first?