THE PROSPECTS FOR ENDING PIRACY AT SEA

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Abstract

Since the earliest days of maritime trade, piracy has been a great cause of concern for the maritime community. During recent years it has evolved into a highly lucrative “profession”, which serves as a financial outcome to people in some of the poorest regions of the world, including Somalia, while disrupting important international supply chains at a great cost to trade. This paper investigates the geography of modern maritime piracy and the common socio-economic circumstances that underlie the causes of Somali piracy. Key findings include the fact that maritime piracy in the Gulf of Aden has recently declined as a result of coordinated international efforts, but remains a serious threat with cost implications for the maritime transport industry and world trade. The paper concludes by identifying the need in Somalia to change the incentive structure that promotes piracy as an alternative to legal pursuits. This can be achieved by restoring a central authority in the country, creating a stable and safe social environment, and re-establishing formal economic and financial systems.

Keywords: Piracy, International Supply Chains, Maritime Transport Industry

How to cite this paper: Goedhals-Gerber, L.L., & Freiboth, H.W. (2014). The prospects for ending piracy at sea. Risk governance & control: financial markets & institutions, 4(3), 16-24. https://doi.org/10.22495/rgcv4i3art2