Is Somali piracy over?

Difficult economic conditions have pushed many a business leader into early retirement. But Mohamed Abdi Hassan – the Somali pirate kingpin nicknamed “Afweyne” or “Big Mouth” – surely never expected to be among them. The notorious crime boss made a splash at the beginning of this year when he announced his decision to “quit” piracy after eight lucrative years in the business. Coinciding with news reports that pirate attacks in the Indian Ocean have plunged to a five-year low, Hassan’s “retirement” raises an unexpected question: is Somali piracy over?

Certainly, the statistics paint an optimistic picture of fewer attacks and fewer successful hijackings. The International Maritime Bureau’s 2012 annual report noted that the number of recorded pirate attacks fell dramatically, from 237 in 2011 to just 75 last year. Attempted attacks also dropped sharply, from 189 in 2011 to 59 in 2012, although this figure is likely complicated by increased in the underreporting of such incidents. Pirates were also less successful at hijacking commercial vessels, capturing only 14 last year, down 50 percent from 2011. These statistics have encouraged some to claim that the Somali piracy bubble has burst.

But is it too soon to write off this business?

Certainly, the international community’s circumspect reaction to these figures is telling. U.N. Secretary General Ban Ki Moon warned in November that despite the sharp decline in attacks, progress was fragile and “easily reversed if we do not address the causes of piracy.” Other leaders have echoed this sentiment, suggesting that the falling numbers are not necessarily evidence of a firm positive trend.

So what is really driving Somali piracy to its lowest level in five years? For a start, there are the ongoing international naval patrols in the Gulf of Aden and Indian Ocean. In particular, enhanced cooperation among international navies has been a key factor behind the steep drop in piracy. For example, regular naval patrols led by the “big three” missions – NATO’s Operation Ocean Shield, the EU’s Operation Atlanta, and Combined Task Force 151 – have been supplemented since last year by an increase in unilateral deployments by China, India, Japan, Russia, and South Korea. Indeed, on any given day during 2012, there were between 21 and 30 vessels taking part in east African counter-piracy efforts.

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But patrolling an area of about four million square kilometers – roughly equivalent to one and a half times the size of mainland Europe – is expensive. In fact, Oceans Beyond Piracy calculated in its 2012 Economic Cost of Piracy report that the total military cost for the big three naval operations was around $1 billion. With the global economy still sluggish, and with governments cutting budgets, it is difficult to imagine there will be the political will to sustain a long term counter-piracy presence in the Indian Ocean. Moreover, the declining number of pirate attacks could well be interpreted as proof that the missions have fulfilled their objectives. All this means that there is a risk that pirate activity could well pick up after the EU and NATO’s counter-piracy mandates expire in 2014.

Still, deploying impressive military hardware isn’t the only way to keep shipping safe. Commercial vessels have also been increasingly employing privately contracted armed guards. So far, this appears to have been effective – not a single ship with private armed security on board has been hijacked by pirates to date. For many in the shipping industry, this regularly touted fact – coupled with the diminishing number of assaults – validates the growing use of armed guards. However, their use is not without its own set of challenges. Around half of all ships transiting the “high risk area” – which stretches from the Persian Gulf to the Seychelles in the south and up to the western coast of India – employ on average four-man teams of private armed guards. As a result, shipping companies are now spending between $1.15 billion and $1.53 billion dollars per year on these armed security teams, according to the 2012 Economic Cost of Piracy study. And while private security firms can justifiably claim to have made the seas safer for their clients, they continue to operate in a largely unregulated space, under uncertain rules of engagement.

A final factor in driving down incidences of piracy has been the implementation of the shipping industry’s current best management practices manual. In particular, it recommends that ships should transit at “full sea speed” (or at least 18 knots) throughout the high risk area – a tactic that has been successful in thwarting hijack attempts in recent years. So far, no vessel traveling at this speed or faster has been successfully hijacked. But this too comes at a price. When ships “speed up” while transiting the high risk area, they burn fuel more quickly. As a result, “shipping companies spent an extra $1.53 billion on fuel costs associated with steaming at faster than optimal speeds in order to prevent pirate attacks,” according to Oceans Beyond Piracy’s latest report.

Undoubtedly these high-cost band aids have been effective in reducing the number of pirate attacks and hijackings at sea. But the reality is that a comprehensive and lasting solution to piracy will have to take place on land, in Somalia.

Is this likely?

There was some reason for hope last year. The military gains made by AMISOM (African Union Mission in Somalia) forces against al-Shabaab militants were matched by significant political progress, including the approval of a new constitution, the swearing-in of a parliament, and the election of President Hassan Sheikh Mohamud. But a series of suicide bombings in Mogadishu, coupled with the warning last week by the British government that it believes terrorist attacks are being planned in Somalia’s capital, are reminders of just how much remains to be done.

For now, Somalia remains fragile, meaning piracy could remain the most visible outgrowth of chronic economic and political instability onshore. The question the international community now faces is how willing is it to continue applying billion dollar band aids that temporarily mitigate, but do not truly eliminate, the threat.

By Urmila Venugopalan, Special to CNN

Editor’s note: Urmila Venugopalan is the South Asia manager at Oceans Beyond Piracy, a U.S.-based non-profit. You can follow her on Twitter @Urmila_V. The views expressed are her own.