Monday, November 9, 2009

Pirates: Not Just in the Carribean

Lately, there have been threats to international business emanating from ungoverned spaces. For example, government snipers had to intervene to rescue the captain of a high jacked U.S. cargo vessel.
Off the coast of East Africa, piracy growth is explosive. In 2007, 41 ships were attacked, in 2008 it was 122, and in 2009 by mid-May, already 102 ships had been attacked. Often, the cargo and the crew were held hostage until a ransom payment was made. With estimated payments of over $ 100 Million, piracy has emerged as a very lucrative industry.
Even though it often appears as if today’s governments are taken by completely by surprise when such piracy happens, the phenomenon itself has been around for a long time and has had a major impact on international business.

During the times of Julius Cesar, Rome’s carriers of wheat were so often under attach by pirates, that Pompeius was issued with special powers and a fleet to end this abuse. In the early 16th century, the North African pirate Barbarossa conquered Algiers and Tunis and used them as bases to attack the ocean ships.

In 1661, a Chinese pirate named Koxinga led 100,000 men and seized Taiwan from the Dutch. A few decades later a confederation of 40,000 pirates based in Canton dominated the South China Sea.

Ship owners typically tried to avoid arming their ships or providing a proper defense. Rather than taking cuts in their profits, they expected their home navy and government to come to their aid. Governments in turn often paid large tributes in order to assure safe passage for their ships. But even with such payments, piracy continues as a threat.

It appears that the key approach to reducing piracy is to constantly challenge the pirates. Whether one sends ships of war for protection, hires private pirate hunters, offers pardons to former pirates or chases pirates at sea and on land, it is crucial to track and intervene in piracy. The cost for the pirates must go up and their rewards must go down, if a reduction of the problem is to occur.

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