Somalia’s Pirates Under
Business Monitor International
May 24, 2012
Although BMI does not see the issue of Somali piracy dissipating any time soon, the pirates are increasingly under pressure. Although this will be welcomed by the shipping industry, the growing business of maritime security forces will suffer as a result. The rise of piracy off the coast of West Africa remains a concern, however.
EU NAVFOR, the UN-approved European naval force operating in the area, on March 23, 2012, had its remit expanded to allow it to attack pirates’ supply lines on the shoreline. This has been welcomed by the force, as its commanders have been frustrated by having to cease engagements with pirates as soon as the latter return to base. Last week, on May 15, helicopter gunships attacked and destroyed five pirate vessels. No one was hurt in the engagement on either side, and NAVFOR has stressed that there were no ‘boots on the ground.’
The raid puts the Somali pirates under increasing pressure. Globalpirate attacks were already down 28% in the first quarter of 2012, according to the International Maritime Bureau, with a sharp drop in the waters off Somalia. Naval patrols have become more effective, and the presence of armed guards on vessels has become more prevalent. This has led to a booming industry, especially in the UK, of startup maritime security companies. Although we do not see piracy in Somalia coming to an end until the dearth of mainstream economic opportunities and lack of effective central government are rectified, should the number of incidents drop dramatically, this could present a challenge to these security companies.
However, the rise in piracy in other parts of the world, in particular West Africa, presents further opportunities for these firms. This time last year, Somalia accounted for 60% of pirate attacks worldwide; this year the country accounted for 40%.
Any decrease in Somali piracy will be good news for global shipping – the cost of the problem has been estimated at US$7bn in 2011. Money can be saved on hiring guards and insurance premiums could decline, although we do not envisage this having a dramatic effect on shipping rates. The pirates will not give up without a fight, however, and may simply move bases further inland, outside the extended NAVFOR remit, giving rise to risk of mission-creep. Equally, they have stated that they will kill hostages if in danger themselves.
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