Dangerous Waters. The economic impacts of maritime piracy

Maritime piracy is one of the contemporary challenges to the maritime industry. The Gulf of Guinea, the Western Indian Ocean, and Southeast Asia are considered to be High Risk Areas in terms of maritime piracy activities. In this regard, both the international community and the coastal countries of the regions have deployed every effort to address the problem. While progress has been made recently with the adoption of antipiracy measures, vessels are urged to remain vigilant when sailing High Risk Areas, since the threat of maritime piracy is not “eradicated.” Maritime piracy represents a serious and sustained threat to economic security, affecting international trade through an increasing insecurity related to the prompt delivery of the transported goods. The global economic cost of maritime piracy is immense (over US$ 7.2 billion in 2015), but the human cost of piracy is incalculable. In addition to the resulting significant and increasing costs related to the security measures, maritime piracy seriously jeopardizes the economies of the coastal countries affected by the phenomenon. Although the threat of maritime piracy is one of the main international security issues, the repercussions for the global economy have not been analyzed in depth in quantitative economic literature. This is mainly due to the rather unsatisfactory data availability as well as to a general interest on that topic which has only recently emerged, i.e. during the recent intense period of maritime piracy attacks (between 2008 and 2011). Therefore, after an extensive study of the existent literature, I decided to analyze this topic in Economics applying quantitative methods. The topic of the thesis is about the economic impacts of maritime piracy. In particular, the purpose of this work is to study how maritime piracy affects economic growth and international trade, and to assess the risk of pirate attacks. The aim of the research is to analyze these aspects by focusing on the three regions most affected by the phenomenon―i.e. the Gulf of Guinea, the Western Indian Ocean, and Southeast Asia. In doing so, I intend to enrich a part of the academic literature in Economics on this topic. In fact, as has already been mentioned, analyses in quantitative economic literature which have been made so far are not sufficient. Throughout the Ph.D. program, as suggested by my supervisor Prof. Bruno S. Sergi, I improved my research and working methodology carrying out a visiting period abroad, participating at several conferences and seminars in the field of International Economics both in Italy and abroad, and having the support of the principal scholars related to the literature of my research. Considering the topic and in order to develop the thesis research, the main sources used are academic (such as papers, articles, journals, and books, especially on International Economics), institutional (such as official data of Ministry of Foreign Affairs, Italian Navy, and CONFITARMA), and non-governmental. In this regard, analyses of the most known research institutes and libraries of the main international organizations, such as the United Nations, the World Bank, the International Monetary Fund, and the International Maritime Organization, are also included. The thesis is structured as it follows. The first and second parts introduce the topic of the thesis. The first part specifically reviews the literature revolving around maritime piracy, while the second part points out the recent trend in pirate attacks in the three regions most affected, and briefly illustrates the main data sources. In the third part, I examine the impact of maritime piracy on the economic growth of the Sub-Saharan African countries. The fourth part analyzes the case study of Southeast Asia, evaluating the effects of maritime piracy on the intra-regional trade. The fifth part assesses empirically the risk of maritime piracy in the three regions most affected by the phenomenon. In the last part, I show the main results of my empirical work and I present my conclusions, suggesting ideas for possible further research.