Somali pirates cost global economy '$18 billion per year', reveals World Bank report

Washington, Apr. 14 (ANI): Somali pirates are pushing global trade costs up by billions of dollars per year, severely affecting the economic activities of neighboring countries, a new World Bank report has found.

The report - "Pirates of Somalia: Ending the Threat, Rebuilding a Nation" - launched in the Somali capital of Mogadishu, states that although hijackings in the region have dropped significantly since last year, piracy could still cost the global economy an estimated 18 billion dollars annually.

The increased costs come as shippers are forced to change trading routes, sending fuel bills soaring, as well as pay higher insurance premiums and security bills for guards on board, reports the CNN.

The threat of piracy in one of the world's most important trade gateways is also an economic blow for neighboring East African countries, particularly in the pillar sectors of tourism and fishing, said the report.

Piracy in the region is thought to have tarnished its image as a stable holiday destination, with visits to impacted East African coastal nations down by nearly 6.5 percent relative to visits to other countries.

According to report, exports of fish products from piracy-hit countries have also suffered, declining by 23.8 percent since 2006, the year the report takes as the starting point of piracy.

The piracy-affected countries include Comoros, Djibouti, Kenya, Mozambique, Madagascar, Mauritius, the Seychelles, Somalia, Tanzania, as well as Yemen, Pakistan and the countries of the Persian Gulf.

The economy of war-torn Somalia, which last September moved closer to stability after electing its first president on home soil in decades, is also severely hit.

The report said the solution to ending piracy will only come with the recreation of a functional Somali state and urged the international community to focus on helping the East African county build a viable political system.

According to the report, 1,068 attacks have been carried out by Somali pirates since January 2005. Attacks peaked in 2011, but have declined sharply since, largely because of increased mobilization of international naval forces and tighter security adopted by the shipping industry. (ANI)