Politics & Media
Nov 25, 2008, 11:40AM

To pirate, or not to pirate

The case is made for Somali pirates.

Look at the numbers:

Dear reader, do not be misled by media reporting. Keep in mind that there are a lot of legitimate business interests not of the United States that are facing a difficult challenge with Somali piracy. However, there are no significant US business interests threatened by Somali piracy, Somali piracy does not represent even a minor economic threat to the United States. Even with the hijacking of a Saudi supertanker, and even if every supertanker from the Persian Gulf has to take the long route around the Cape of Good Hope, this amounts to less than 1 penny per gallon cost for the American citizen.

Perspective is important. The most serious cost estimates of Somalia piracy are suggesting it is having a $14 billion dollar impact, and that is probably a very optimistic guess because I honestly can't find more than $1 billion, and I study this stuff. For context, assuming $14 billion dollars, then that doesn't account for much in a $7.8 trillion dollar global industry. Even at the super estimate of $14 billion dollars, that means piracy is impacting the industry a whole 0.1%.

  • American business interests are not affected that much directly because of the geographical location. There are not many America-bound vessels that use that particular stretch of the shipping channel simply because most of our stuff come from either the Pacific side or from Europe. That leaves only a tiny percentage of it coming through there and affected by piracy. This, by no means is an incentive for any country to grow complacent on piracy.

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