A new report says Somali piracy cost the world economy nearly $7 billion last year, most of it spent to protect ships from hijackings.

The report, from the U.S.-based One Earth Future foundation, said Somali pirates command an average ransom of $5 million per ship.

But it says ransoms were only a small fraction of the overall cost in 2011. It says the largest amount, $2.7 billion, was for increased fuel costs as ships try to move quickly through piracy-prone areas.

It says more than $1 billion was spent on naval military operations, and another $1 billion spent for private, armed security guards stationed on board vessels.

Other major costs were for higher insurance, higher wages, re-routing of vessels, and prosecution of pirate suspects.

Somali pirates have hijacked dozens of ships in the Gulf of Aden and Indian Ocean during the past few years. Hijackings have dropped sharply in recent months, which the report attributes to increased use of armed guards and effective naval operations.

The International Maritime Bureau says Somali pirates are holding 10 ships and 159 hostages.

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VOA

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