Sea piracy off the coast of Somalia was estimated to have cost the global economy between $5.7 Billion to $6.1 Billion in 2012. The total economic costs were 12.5 percent lower than 2011.
A portion of the decrease was attributed to the increased security presence in the area. The costs to arm guards travelling on ships increased by nearly 80 percent and was costing the shipping industry between $1.15 Billion to $1.53 Billion. The rise in private security led to the decrease in international military operations, whose costs fell 14 percent to $1.09 Billion.
The amont of ransom paid out to pirates in Somalia also decreased in 2012. The Somali Pirates were estimated to have received $31.75 Million in ransom payments in 2012, compared to $159.62 Million the year before.
Source: Reuters, “Global cost of Somali piracy down as higher security deters attacks,” Yahoo News, April 9, 2013.