x Abu Dhabi, UAEMonday 22 January 2018

Pirate problem becomes a matter of urgency in Dubai

While the world worries about events on either side of the Arab world, in Libya and Bahrain, to the south of the region there is an increasingly urgent situation that will also require co-ordinated international intervention: piracy.

While the world worries about events on either side of the Arab world, in Libya and Bahrain, to the south of the region there is an increasingly urgent situation that will also require co-ordinated international intervention: piracy.

There has been an upsurge in pirate activity off the coast of East Africa over the past year, and the pirates' traditional hunting grounds - the Somali coast and the Gulf of Aden - have been extended farther east and north.

Many attacks are now taking place in the Arabian Sea just outside the Strait of Hormuz, or farther west towards the coast of India.

It is a serious challenge for GCC countries. So far, the big military naval presence in the Gulf itself has deterred piracy from slipping past Hormuz. But if the pirates manage to blockade the seas just past the Strait, it would amount to the same thing: a threat to the export of oil and gas from the biggest producing region.

The knock-on effects for the global economy would be enormous. With so many other factors threatening stability in the region, the threat of piracy is one that the international maritime industry and sovereign governments need to address urgently.

Next month, there will be the chance to do so in Dubai. The UAE Ministry of Foreign Affairs and DP World, the emirate's global ports and logistics company, are jointly calling an international conference to discuss the issues and adopt initiatives to halt the pirates.

Entitled "Global threat, regional responses: forging a common approach to maritime piracy", the two-day event will bring together foreign ministers from 50 countries and leading executives from the main international players in the maritime industry: shipping companies, ports groups, insurers and security businesses.

It is the first such co-ordinated forum since the problem really took off.

There can be no doubting the urgency of the problem. In the first two months of this year, some 80 commercial ships have come under attack in the Gulf of Aden alone, with 18 ships hijacked, according to the International Maritime Bureau (IMB).

About 40 ships are currently estimated to be under pirate control, with 800 mariners held captive.

The total cost to global trade is enormous. Taking into account higher passage and insurance charges in affected waters, increased cost of security measures and ransom payments when all else fails, the hit on the world economy is as much as US$12 billion (Dh44.07bn), according to the IMB.

The alarm bells began to ring with new urgency this year when a Greek-registered tanker, the Irene SL, carrying two million barrels of oil worth more than $200 million, was captured on the fringe of the Gulf of Oman.

Not only was it the biggest-value prize ever taken by pirates, it was also in an area previously thought to be at the extreme limit of their capability.

The conference has the backing of senior political and business leaders in the UAE. Sheikh Abdullah bin Zayed, the UAE Minister of Foreign Affairs, said: "A successful response must address not just the symptoms of piracy but also the underlying causes."

Sultan Ahmed bin Sulayem, the chairman of DP World, said: "The private sector is directly impacted by piracy and the threat of piracy, and therefore has a strong interest in contributing to finding solutions in close co-operations with governments."

Finding a solution will not be an easy matter. The problem falls in two areas, as the UAE statement recognises: dealing with the symptoms, and the underlying causes.

A host of initiatives to handle the immediate problem has been floated: an international naval force to patrol the area; the arming of merchant ships and the granting of new powers to resist attempted boarding; the establishment of a convoy system to better protect shipping in the area. All are fraught with financial, legal and security complications.

Tackling the underlying cause of piracy is a long-term issue with no obvious and immediate solution.

Most of the attacks originate from the southern shores of Somalia, where piracy has become a new and vital feature of the local economy.

You might call it the "black" economy, except that war-ravaged Somalia has so little in the way of orthodox economic activity.

The GDP of the country in 2009 was estimated at $5bn. Set against the annual cost of piracy, that is a comparatively small sum.

It would be worth the cost for governments and businesses to set up a special "regeneration fund" for Somalia that would attract would-be pirates back into mainstream economic activity.

The Dubai conference, on April 18-19, has some crucial decisions to make.