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Piracy Problem and Its Effects on World Trade Essay


Piracy

The shipping industry supports every aspect of global trade (Daniels 2012). The International Chamber of Shipping (ICS) reported that ‘over 90 percent of global trade is supported by the shipping industry’ (Yanchunas 2014, p. 41). Shipping has transformed the nature of international trade. Today there are over 50,000 ships ferrying cargo across the globe (Helmick 2014). Shipping has therefore increased the efficiency of world trade.

Despite these developments, the industry faces a major challenge that affects its success and effectiveness. The problem of piracy is a major threat to global trade. Helmick (2014) defines piracy as ‘any form of criminal violence and robbery at sea’ (p. 18). Individuals who engage in such criminal offenses are known as pirates. Such pirates usually attack crews, loot vessels, and sometimes injure victims (Yanchunas 2014). They also demand a ransom before freeing their victims.

Areas of Piracy

Yanchunas (2014) believes that ‘there are specific regions where the threat and terror of pirates have reached epic proportions’ (p. 42). The first area is the Strait of Malacca. This strait is the main gateway to the Suez Canal. Studies have indicated that the area is characterized by increased cases of piracy. The other region in the South China Sea whereby pirates from Indonesia and Malaysia attack cargo ships. The Gulf of Aden has for centuries supported international trade. The importance of this area makes it a favorite for many pirates. Benin is West Africa is also a high-risk area (Johnson 2014).

The coast of Somalia is infamous because of its pirates (Kraska & Wilson 2009). Issues such as poverty and terrorism have led to unrest in the region (Daniels 2012). The other region known for piracy is ‘the Gulf of Oman’ (Helmick 2014, p. 23). These regions have recorded increased cases of sea piracy within the past two decades. There are also other regions associated with piracy such as Indonesia and Nigeria (Essien & Adongoi 2015).

How Piracy Affects Global Trade

Maritime shipping is what sustains global trade operations and economies (Bateman 2010). Many companies in the maritime shipping industry play a major role in supporting global trade. They transport containers and cargoes from destination A to B thus supporting the changing needs of the global consumer. Many shipping companies have therefore been forced to deal with the problem of piracy. As a result, such companies lose billions of dollars annually. The malpractice also disorients every logistical operation aimed at supporting and sustaining global trade. Piracy is, therefore, malpractice that makes it impossible for cargoes to be delivered in a timely manner (Mair 2011).

Companies involved in shipping usually inflate logistical costs because they have to deal with the problem of piracy. Many cases of piracy occur in international waters. Astonishingly, such culprits are not punished or deterred from committing similar criminal acts. The problem of piracy forces many firms to consider other transportation methods in order to fulfill the needs of their clients. The use of air transportation is costly for many people. These decisions have been undertaken because of the issue of piracy and global terrorism. The consumer is eventually forced ‘to purchase different products at increased prices’ (Mair 2011, p. 45). New measures are therefore needed in an attempt to deal with this global problem.

Why Piracy Should be Stopped

Piracy should be stopped because it threatens the concept of globalization. International trade has been facilitated by maritime shipping for very many years. The presence of pirates in different regions discourages many companies and stakeholders from joining the shipping industry. Such pirates also force existing players to charge increased transportation costs (Treves 2009). These issues should, therefore, encourage different governments to deal with the problem of piracy.

Piracy is also closely linked to security. Most of the areas associated with piracy tend to have numerous security issues. Experts believe that the ‘presence of terrorist groups in Somalia catalyzes piracy along the Indian coast’ (Johnson 2014, p. 11). Most of the efforts used to deal with terrorism should also focus on the issue of piracy (Rengelink 2012). Malpractice also affects international relationships. Strained international relationships can affect the economic performance of many societies. This argument shows clearly that piracy has copious economic implications. International players and governments should, therefore, come together in order to deal with this challenge.

List of References

Bateman, S 2010, ‘Maritime Piracy in the Indo-Pacific region: Ship Vulnerability Issues’, Maritime Policy Management, vol. 37, no. 7, pp. 737-751. Web.

Daniels, L 2012, Somali Piracy and Terrorism in the Horn of Africa, Scarecrow Press, Lanham. Web.

Essien, S & Adongoi, T 2015, ‘Sea Piracy and Security Challenges of Maritime Business Operation in Bayelsa State, Nigeria: An Empirical Study’, International Journal of Humanities and Social Science, vol. 5, no. 2, pp. 213-221. Web.

Helmick, J 2014, ‘Maritime Piracy and the Supply Chain’, Global Supply Chain Security, vol. 1, no. 1, pp. 17-34. Web.

Johnson, L 2014, ‘The Consequences of Somali Piracy on International Trade’, Global Tides, vol. 8, no. 1, pp. 1-15. Web.

Kraska, J & Wilson, B 2009, ‘Somali Piracy: A Nasty Problem, a Web of Responses’, Current History, vol. 718, no. 1, pp. 227-231. Web.

Mair, S 2011, ‘Piracy and Maritime Security’, SWP Research Paper, vol. 1, no. 1, pp. 1-94. Web.

Rengelink, H 2012, ‘Tackling Somali Piracy’, Trends in Organised Crime, vol. 3, no. 1, pp. 180-197. Web.

Treves, T 2009, ‘Piracy, Law of the Sea, and Use of Force: Developments off the Coast of Somalia’, The European Journal of International Law, vol. 20, no. 2, pp. 399-414. Web.

Yanchunas, D 2014, ‘Masters, Ship-owners Face Liability Risk from Armed Guards’ Mistakes’, Professional Mariner, vol. 1, no. 1, pp. 41-44. Web.

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IvyPanda. "Piracy Problem and Its Effects on World Trade." July 16, 2020. https://ivypanda.com/essays/piracy-problem-and-its-effects-on-world-trade/.

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IvyPanda. 2020. "Piracy Problem and Its Effects on World Trade." July 16, 2020. https://ivypanda.com/essays/piracy-problem-and-its-effects-on-world-trade/.

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IvyPanda. (2020) 'Piracy Problem and Its Effects on World Trade'. 16 July.

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