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The Economics of Piracy

April 2011 | 27 pages | ID: E24A5737F6CEN
Geopolicity Inc.

US$ 500.00

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In 2011, Geopolicity established a global economic model for assessing the costs and benefits of international piracy; adding significantly to the debate on the causes and consequences of piracy.

The Economics of Piracy report provides key piracy trend analysis, while also highlighting across the ‘Pirate Value Chain’ (PVC) where the greatest rates of return on international counter pirate investment and policy are to be found. It provides: (i) cost-benefit analysis at the individual pirate level, based on existing socioeconomic and market data; (ii) assessment of the aggregate costs and benefits at the international systems level; and (iii) comprehensive data on the resurgence of piracy by functional classification and sovereign jurisdiction; to include trend, comparator and predictive analysis.

The report has been designed to inform strategic political and investment decisions in counter-piracy. It further serves as a critical resource to private investors, operating across all major African, Middle Eastern and Pacific Rim maritime systems, as it estimates and forecasts:
  • Pirates number annual increase rate;
  • Piracy incidence rate;
  • Piracy-induced operation and investment risks;
  • Aggregate cost of piracy to the international community
  • Piracy impact on the financial sector, both formal and informal.
  • Supply and demand for piracy services;
  • Piracy generated income off the Coast of Somalia, including financiers/sponsors share;
  • Pirate vs. non-pirate income disparity range.


1. Introduction
2. Methodological Observations
3. The Pirate ‘Value Chain’
4. Estimating the Cost of Piracy
5. Estimating the Benefits of Piracy for Pirates
6. Tracking Financial Flows
7. The Hawala System
8. Independent Action Research Framework


Annex 1 Global Piracy Incidents


Map 1 Geographical Expansion of Piracy (2005-2011)


Figure 1 Indicative Pirate Value Chain
Figure 2 Agency & Institutional Actors Across the ‘Pirate Value Chain’


Table 1 Low-High Case Annual/Lifetime Pirate Revenues in US$ Based on 1,500 Pirates
Table 2 Low-High Case Annual/Lifetime Pirate Revenues in US$ Based on 3,000 Pirates
Table 3 Maritime Piracy Financial Investigation Options


Box 1 Observations on Primary and Secondary Data Sources
Box 2 Piracy & Profiteers

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