The ongoing battle with Somali pirates and their plundering peers off the Horn of Africa is costing the global economy $18 billion a year.

A new World Bank and United Nations report entitled ‘Pirate Trails, the International Criminal Police Organisation’ reveals the war on piracy leaves the world with the whopping annual bill as navies and security forces patrol the waters to protect ships and sailors.

The report also reveals that Somali gangs have raked in $413 million in ransom money from 2005 to 2012. However, the report’s authors stress the costs are necessary.

“Unchallenged piracy is not only a menace to stability and security, but it also has the power to corrupt the regional and international economy,” said Stuart Yikona, a senior financing specialist at the World Bank and co-author of the report.

However, while the pirates are doing the looting – they don’t reap rewards. The report says criminal kingpins behind the gangs take 50 per cent of each ransom, which soared to an average of $5 million per ship in 2011.

The majority of the money from the pirate activities is used to fund other criminal operations – including funding militias, arms and human trafficking. A high percentage of the ransom money is laundered through the trade of the drug khat, especially in Kenya. The dossier on piracy around Djibouti, Ethiopia, Kenya, Seychelles and Somalia was compiled from interviews with former pirates, crime-fighting agencies, government officials and bankers.

While a two-day anti-piracy conference in Dubai in September heard that piracy was at record lows, the World Bank/UN report says that a financial task force is needed to stop the money laundering networks. It also calls for greater cross-border controls and tighter co-operation in the Middle East and Africa.

“The international community has mobilised a naval force to deal with the pirates,” said Yikona.

At the Dubai conference in September, UAE Foreign Minister HH Sheikh Abdullah bin Zayed Al Nahyan pledged that the country would continue to help Somalia to battle the bandits.

duncan.hare@7days.ae

Source: 7daysinDubai