The Economic Impact of Maritime Insecurity in the Middle East

The Economic Impact of Maritime Insecurity in the Middle East
1. Introduction
The terrorist attacks of 9/11 and the response have engendered significant change in the international security environment, US strategy, and global economic climate which influence the world maritime industry. (Lunstrum et al, 2007) The war on terrorism has been an open-ended and nebulous type of conflict with no clear endpoint and degrees of success and failure in various component operations. This environment has deterred long-term investment decisions and engendered higher levels of risk and conflict throughout the international system. The global war on terrorism is not the sole concern; the new pattern of US interventionist policy has international effects from actions in the Balkans to considering the security of the Strait of Malacca.
Recent history has revealed weaknesses in the political and military balance within the region and the ability of the United States to act as a stabilizing force. These balances affect the outcomes of conflicts, the security of the sea lines of communication (SLOC) and the global economy, and the overall risk of new conflict erupting in the region. Events and conflicts in the international system are often catalysts for change and the catalyst for this consideration of the economic impact of maritime insecurity in the Middle East rises from the events of September 11, 2001 and the following global war on terrorism.
The Middle East is a critically important region with global implications and its security intersects with the global economy and overall international security. The volume of oil transported through the Persian Gulf makes maritime security in that region a vital interest for a number of nations. The US Global Positioning System (GPS) radionavigation signals are unencrypted commercial signals and the system is highly vulnerable to signal interference.
1.1 Background
Piracy has been an issue affecting global trade for centuries, but it was not until the 21st century that it re-emerged as a serious threat to world commerce. The piracy plague that has gripped the trade routes of South East Asia (SEA) over the last few years has been a major catastrophe for commerce. The large number of pirate attacks with their increasing viciousness has caused much concern among the seafaring community. The confidence expressed by some regional politicians that piracy is under control is in stark contrast to the view held by the majority of shipmasters and crews trading in the region. This paper addresses whether the assumption that the economic impact of piracy has been overstated and that the region requires a greater understanding of the root causes of piracy before effective counter-measures can be implemented. Recent geopolitical history has shown that misuse of the term “piracy” as a euphemism for political banditry is often deliberate, indicating that there is a perception gap between what is traditionally understood as piracy and its modern-day counterpart. It is suggested that this gap accounts for some of the misunderstanding of the problem and that piracy in its current state is a rational business activity for those involved.
The current events in the Gulf and the impending war with Iraq have propelled the security of the region to the forefront of international concern and has significant implication for the safety of mariners and the security of their cargoes. This paper attempts to build a complete understanding of the problem of maritime insecurity in the Middle East and its economic impact, focusing on more than just the physical acts of violence against ships, but also the micro and macro effects on the shipping industry and the broader implications for international trade and security. While there is a reasonable understanding of what constitutes a pirate attack, a clear definition of maritime insecurity and its various forms is hard to find. This has caused some debate in the past as to whether attacks on ships in the region are acts of piracy or something else. Recent attacks off the coast of Somalia have led to convicted Somali pirates receiving reduced sentences based on the premise that they were actually engaging in some form of legitimate coastguard activity. This has raised some interesting jurisprudence questions and further need for clarity on what constitutes criminal violence against seafarers and the navigation of sea craft. A comprehensive clarification of these issues will be an important platform for understanding the issues faced by mariners in the region and thus their confidence in trading in said areas.
1.2 Problem Statement
The problem statement of the research is: What is the economic impact on GCC (Persian Gulf) countries due to maritime insecurity? What are the economic losses incurred by these countries? What is likely to happen in the future given the current price of oil and the growing political tension in the Middle East? This paper is aimed at finding answers to these questions, using the experiences of simple historical examples and various economic models. To make the situation more concrete, the paper will mainly discuss the economic impact of maritime insecurity on the island of Bahrain, as one of the GCC countries. This is due to the fact that Bahrain has been one of the hardest hit countries in terms of maritime security problems and has suffered significant economic losses due to this. The current and likely future problems will be detailed and discussed throughout the paper, making use of various economic models to gauge their potential impact on Bahrain and other GCC countries. This analysis is important because it will show the severity of the problem faced by GCC countries today and also show the potential for future problems if current political and economic conditions do not change. The revealing of these potential future problems may serve as an impetus to create change in policies and political situations in the Middle East, in order to avoid future economic hardships caused by maritime security problems.
1.3 Objectives
Various studies on maritime insecurity have been conducted. Most of them, however, only bring up to date the current state of affairs, analyzing the seriousness of the situation and recommending policies without really assessing the economic impact of maritime insecurity to the region affected and, most importantly, to the country involved. They are descriptive and not analytical. Obvious limitations can be seen already in trying to assess the economic impact of maritime insecurity in an isolated approach. Individual country studies cannot hope to provide a complete picture of the economic cost. For example, though Malaysia has been affected by maritime piracy and sea robbery, with attacks occurring in the Straits of Malacca and South China Sea, and Abu Sayyaf terrorist activities in the Eastern Sabah, definitely the cost of burden does not only apply to Malaysia only, but is shared together by Indonesia, Philippines, Brunei, and even Thailand and Singapore. Whether it is in providing for security checks or even the redirected trade between countries to avoid higher risk areas and to use Malaysia as an example, the cost of importing to replace natural resources which were raided during an attack. Hence, in view of this, the objectives of this paper are as follows.
2. Trade Flows and Maritime Insecurity
Data, this economic study suggests that a major disruption of trade flows could have a detrimental impact on Middle Eastern economies, as the reliance on seaborne trade means there are no viable alternatives to the products being imported. Disruption to imports of food and other essential goods may be cause for concern if it leads to domestic inflation of said goods. This may have a negative impact on the lower-income nations in the region who rely on cheap imports to ensure an acceptable standard of living. Inflation may also result from increased cost of imports if shipping companies factor in higher maritime risk with higher transportation costs. This would be damaging for many of the nations in the region who rely on imports to sustain their current level of development.
Brief macroeconomic studies are provided for the various nations of the Middle East to quantify the importance of the maritime sector in terms of imports and exports (defined as the total of exports and imports over GDP). There is a high degree of variation in the importance of seaborne trade between different nations in the Middle East. For instance, Kuwait, being a relatively resource-rich state, has a low trade to GDP ratio (almost all exports are oil), while nations like Egypt and Jordan, who have little resources and rely heavily on trade, have much higher ratios. It is generally observed that the resource-poor nations in the Middle East rely heavily on maritime trade. A breakdown of what Middle Eastern nations are trading with the rest of the world is also provided using data obtained from the UN. This gives a good indication of the direction of Middle Eastern trade and what nations are reliant on others for specific goods. This information is pertinent when considering the potential impact of maritime insecurity on the regional states.
2.1 Impact on Import and Export Activities
The countries most greatly affected by maritime insecurity in the Middle East are the war-torn and poorest states of the region. Import and export activities are a matter of life and death to these countries. Export revenues are necessary to fund essential imports such as food, which a country like Somalia, unable to produce sufficient food to feed itself, must import. Any loss or reduction of export earnings, particularly when due to decreased production and higher transport costs, can be serious. For example, between 1990 and 2001, the average annual growth rate of GDP dropped to an annual figure of 1.45%, a rate far below that of population growth, which meant that it was only through opening up greater access to the external market in later years that the economy just managed to keep pace with population. This high economic vulnerability makes the countries in this region exceptionally dependent on world market access. Any loss, real or potential, of access to key markets will affect these countries severely. High incidence of small-scale, low-value goods trade with neighboring countries has increased these countries’ dependence on secure and low-cost transport services. And for many, the present or potential loss of secure export markets is viewed with great anxiety. A recent survey reports that most would require at least the same level of profit to be induced to change trades.
Maritime insecurity in the Middle East is heavily influencing import and export activities throughout the region. This is especially true for smaller states and those states that are in any form of conflict or tension. The more powerful Gulf States are generally able to bypass most of the economic impact as they export the oil and gas resources so vital to the world economy through pipelines rather than by sea. Smaller states such as Yemen are not so fortunate and rely heavily on the export of raw goods such as coffee to keep their economy afloat.
2.2 Disruption of Supply Chains
This is due to the increasing globalization trends and the Just In Time (JIT) production system that requires constant and reliable shipments of parts and products. The basic concept of a supply chain is that of a network of retailers, distributors, transporters, storage facilities, and suppliers that take part in the production, delivery, and sale of a product. Maritime insecurity is said to impact supply chains as a result of changes in trade routes and methods of shipping goods, the threat to cargoes and shipping vessels, and the increased costs and delays that reduce the efficiency of moving goods between the point of production and the point of sale. A simulation model developed by Sisik and Bayındır (2002) analyzes the impact of maritime attacks involving the seizing of vessels, and attacks on the straits used to transport oil. This results in an increased utilization of air freight as a result of significantly increased shipping costs, though it is noted that even if higher transport costs are incurred, there is still a risk of damage through attack in which case shipments may be completely stopped.
The threat of maritime insecurity to supply chains also extends to the types of shipping methods needed to move products. A study by Li (2004) details the impact of increased insurance rates on shipments of Chinese electronics, machinery, and textiles to Europe and the USA. Using the example of a 2500 twenty-foot equivalent unit (TEU) shipment of electronic products, Li explains that higher premiums would add to the costs of manufacturers and exporters. This in turn would result in them either trying to pass the added expense to customers, or seek different transport method or routes to recoup the increased costs. In areas of high risk shipping it is possible that some products may become economically unviable to ship by sea. An assessment by Powell (2006) on the potential threat to Australia’s coal exports through the use of terrorism describes a situation where the added cost and complexity of protecting cargoes and ships may lead to an increased used of processed coal and alternative energy sources that do not involve overseas shipment of coal Sisik and Bayindir (2002). By the very nature of maritime insecurity, supply chains are threatened to greater or lesser extents, though the resultant changes in methods and routes of product shipment can ultimately impact the ability of producers to get goods to desired markets. This form of indirect disruption is best characterized by the LPG shipping market during a time of crisis in the Middle East. Hine and Murphy (2007) explain that loss of several vessels and the detention of others led to a significant decrease in the number of charters passing through the Gulf, thereby reducing availability of LPG to the market. This caused repositioning of cargoes through longer shipments, direct switch to other LPG sources by some countries, and complete abandonment of buying LPG from Middle Eastern sources. The net result was decreased market supply of Middle Eastern LPG despite the actual lost ships and cargoes being very small.
2.3 Increased Costs and Delays
The costs of implementation are significant, with some estimates suggesting that a medium-sized port in a developing country could face initial costs of $4-5m and further annual costs of $2m. This has caused some to suggest that costs may be so high that it will put some ports out of business. The cause for concern is warranted given that the code allows for the exclusion of ships from ports if it is decided that they pose a security threat, a decision that according to Jan Kopernicki in Lloyd’s List, could well be influenced by economic as well as security considerations. Exclusion from certain cargoes has also been a consequence of maritime insecurity. An example of this is the decision following the September 11th attacks by the US President to suspend the unloading of certain dangerous goods cargoes from all non-US flagged ships.
Increased costs and delays are a normal outcome of the disruption of supply chains and impact heavily on import/export oriented industries, leading to inevitable erosion of profits. Whereas the oil industry has largely been able to pass incurred costs onto consumers through increased prices, other industries have suffered. For example, the doubling of insurance rates after the 11th September attacks and the introduction of the International Ship and Port Facility Security (ISPS) code, which came in the wake of the attacks, have increased costs across the board and had an impact on the competitiveness of the industry. The ISPS, an amendment to the SOLAS convention, was adopted in 2002 and came into force in 2004, stipulates certain security standards that must be met before ships are allowed to enter a foreign port.
2.4 Case Studies
Cameroon has been affected by the conflict in the eastern Democratic Republic of the Congo, which has created a land transport demand given the inaccessibility to normal transit regions. Cameroonian goods are currently being offloaded at Angolan and Namibian seaports and then transported by road back across Zambia and Zimbabwe. This avoiding East and Southern African maritime routes has seen an increase in transport costs. Take the case of a Zambian importer of European foodstuffs and South East Asian electronics. His consignments have traditionally been forwarded as mixed loads ex Europe to Durban, and then split into two containers, one being destined for Dar es Salaam, and the other going to landlocked Zambia. The Congolese conflict means that the consignee first has to use a more expensive reefer container to get the foodstuffs from Angola to their final destination in Zambia. Then for both types of goods an increase in transit time means higher inventory costs and lower sales for the importing company. With a secured maritime route, the importer could have sent the container destined for Tanzania via traditional S African transit and the cargo bound for Zambia by the same method being used by European goods and the Chinese electronics. High maritime transport costs and long delays have forced many importers and exporters to consider air freight as a viable alternative. This has been the case for Zimbabwean floriculture whilst Kenyan tea producers have offset declining revenues associated with competitive pricing in the global market by reducing production costs and maintaining profits through lower sales volume. The DRC has confirmed plans to end conflict and promote governmental reform. This in itself may not alleviate the country’s status as a landlocked nation, but a state of increased security in East and Southern Africa would see a return to normality for previous trade patterns and thus a reduction in transport costs for a myriad of importers and exporters.
3. Tourism and Maritime Insecurity
Tourism is considered to be the most visible and direct link between the local economy of a particular country and the global market. In recent decades, the tourism industry has become one of the largest grossing global industries. The WTO projects that international tourist arrivals are expected to reach 1.6 billion by the year 2020. Tourism is an especially important source of income for many of the countries of the Middle East. According to Matheson and Anness, tourism is one of the most dynamic sectors of the economy in the Middle East, accounting for ten percent of the GDP for both Lebanon and Syria and as much as 30 percent of the GDP for a country such as Oman. The Middle East has many draws to the tourist such as the rich history and archaeological significance of the region, the fine climate, natural beauty, and of late a number of man-made attractions such as the United Arab Emirates Burj Khalifa and the Palm Jumeirah. However, despite the allure of the Middle East as a tourist destination, the global economic downturn experienced in the first decade of the new millennium combined with increasing political strife and violence in the region has affected the number of tourists visiting the Middle East. High income elasticity of long-haul travel coupled with the relative ease of which travel plans can be cancelled or redirected means that potential tourists to the Middle East are more likely to cancel their travel plans in times of political tension or economic uncertainty.
Decreased tourist arrivals to the regional level can cause tradable and non-tradable leakage within these nations’ balance of payments. Tradable leakages occur when tourism provides a link (either through import or export) between the economy and the rest of the world. High levels of import leakage will mean that tourism actually increases the deficit of the country’s balance of payments. With less tourism revenue coming into the country, the government may engage in import substitution to protect domestic industries. In other cases, a decrease in tourism receipts may induce cost cutting by industries. To increase productivity, some of these industries may replace workers with capital or technological advancements to reduce costs. This could cause further unemployment of unskilled labor which was working in the tourism sector.
3.1 Decreased Tourist Arrivals
The tourism sector in the Middle East in general, is highly susceptible to loss of tourist arrivals due to the abundance of alternative travel destinations and the relative ease by which tourists can avoid the Middle East when compared with changing plans for travel within their own country.
In the case of the September 11th 2001 terrorist attacks in the United States, the event did not physically damage all the tourist attractions at the time, but the subsequent notable decrease in tourist arrivals to the US was estimated to have resulted in $600 million in lost revenue for all US national parks and at a 1.4 million job loss in the travel industry. The lost tourism revenue after events of insecurity, means an opportunity cost as tourists spend their money on alternative destinations. This impact can be permanent, as the perception and image of an insecure area can linger for many years, and the opportunity cost is depending on if the areas improve security and try to win back tourists at a later date.
High levels of safety and security are essential preconditions for the growth of tourism, as tourists are unlikely to visit areas where their personal safety or property is at risk. It is widely known that perceptions of risk and safety are often more important to the tourism industry than actual statistical evidence, as evidenced by the rapid cancellation future bookings from tourists or travel advisories issued to citizens by their home countries following a security incident in a tourist destination. If an area becomes associated with political instability, demonstrations, crime or terrorism, tourists are likely to avoid it, leading to a decrease in tourist arrivals by various means such as postponing or cancelling planned trips, or avoiding the area for future travel destination. This decline in tourist arrivals has been identified as the most severe unintentional economic impact of events affecting tourism.
In the Middle East, where much of tourism is based on the unique historical, cultural and natural heritage of the region, tourism has been targeted by many governments for development as a way to diversify their economies and reduce dependence on hydrocarbon resources. Tourist arrivals to the Middle East have more than doubled in the past two decades from 24 million in 1980 to 50 million in 2000. This growth compares favorably with the rest of the world and with the exception of sub-Saharan Africa, the Middle East has been the fastest growing region in the developing world for tourism during the 1990s.
The value of tourism is widely recognized in the study of numerous economic sectors and activities. Tourism can be defined as the activities of persons traveling to and staying in places outside their usual environment for leisure, business or other purposes. It is a key economic driver that commands the attention of a wide range of government and private sector organizations. It is one of the world’s largest industries, with global economic activity estimated to be 3.5 trillion US dollars in 2000. Tourism activity can vary from a single individual visiting a country for one day, to a family taking an extended vacation, or a large cruise ship or airline with tens of thousands of passengers.
3.2 Negative Perception and Image
In contrast of the positive home country perception, many maritime insecurity incidents in the Middle East lead to a negative foreign perception of regional security and safety of tourist destinations. Due to the fact that many incidents are widely publicized and often exaggerated by media outlets, regional security incidents become blown out of proportion and are viewed as widespread threats to both regional and foreign tourists. Foreign countries are likely to issue travel advisories warning against travel to countries affected by maritime security incidents. These advisories can greatly affect the tourism industry in the home country. The most serious form occurs when foreign tourists are advised to leave the country or cancel future holiday plans. This happened when Indonesia was placed under advisories principally brought on by the Bali bombings in 2002 and 2005. The diving industry in Indonesia suffered greatly from these advisories as many foreign tourists who had prearranged diving holiday plans were forced to cancel. Travel advisories can deal heavy blows to the tourism industry. It has been estimated that the travel advisories against travel to Indonesia issued by several foreign governments following the Bali bombings had a total opportunity cost of US$548.25 million. Finally there are countries, on hearing of security incidents may reposition major international events and conferences to other locations. This occurred as Singapore had to relinquish hosting rights for a major international event to Australia because the event’s organizers felt it was unsafe to hold the event in Singapore.
The negative impression and image received by other countries on the security conditions in the Middle East are problematic in the attempt to sustain economic growth in the region and hard to overcome. There are two types of perception that must be differentiated. The first is the positive perception of the home country regarding the security situation. The second is the foreign perception and opinion of the security situation in the country. First discussing the positive perception, which is held by many of the home country governments and civilians. Due to the fact that a high percentage of the maritime security incidents are happening in international waters and involving foreign perpetrators, many regional countries feel that their security situation is safe and is not harmful to their own citizens or tourists. This is the perception that the UAE holds in their own security situation. UAE citizens and tourists are not directly affected by the security incidents happening in other regional locations and will continue to frequent local tourist attractions and beaches. This point is significant for countries not directly affected by the security incidents. Due to the fact that their own security is unaffected they will have no reason to deter from usual activities, thus causing no direct economic impact on the home country.
3.3 Damaged Infrastructure and Attractions
Maritime insecurity has been the key factor for fewer tourist visits to some nations. The sudden 9/11 attacks and the 2002 Bali bombings triggered major travel alerts from the United States and Australia to several Southeast Asian nations, sparking drastic drops in tourist numbers. Laxman Perera, the Director General of Sri Lanka Tourism in 2003, conceded that the global travel advisories against visiting Sri Lanka, which were continuously repeated for the last two years, have kept the high-spending long-haul tourists at bay. Despite propelling an all-out war against the LTTE, the nation’s harboring insecurity due to intermittent LTTE sea Tiger’s international attacks, EU’s issue on banning the nation’s airbuses to EU, all have culminated in the deterioration of tourism prospects in Sri Lanka. Movement of cargo vessels and tankers carrying oil, chemicals, and other substances at sea are often prime targets of maritime terrorists. Any direct strike on such vessels could create an oil spill or release of hazardous substances, which has the potential to cause severe environmental damage and health risks to the local population and visitors. The Malacca Straits, a key moment for significant terror threats [citation needed], has been allegedly stated by U.S.-based Henry L. Stimson Centre researcher Zachary Abuza was never closer to having a terror network, and this pattern is dangerous and has long-term implications on regional and global security. An oil spill can be an accidental act due to a mishap from vessels and may not always be because of a terrorist attack. An oil spill from an act of maritime sabotage would create widespread and lasting ecological damage. Sri Lanka is still grappling with the adverse effects of two unrelated incidents involving an LTTE suicide attack on The MT New Galle carrying 30,000 metric tonnes of oil, where wreckage occurred near Unawatuna beach, and a collision between a US and Japanese vessel that resulted in a 2003 spill at the entrance to the country’s main harbor. Both events have resulted in significant damage to marine life and beaches. According to estimates, the cost of cleaning and compensating the affected will be around 10 to 12 million USD for the latter incident and a further 1.5 million for compensating fisheries around Hikkaduwa for the New Galle incident. The economic cost for both incidents would be many times the initial cost in terms of revenue lost from the surrounding tourist destinations. One major concern involving the safety of tourists is the several reports on the kidnapping of tourists for ransom money occurring in the region of islands of Eastern Sabah and recently in the Philippines. Although not widely reported, apparently these incidents are still affecting the travel advisories of several western nations. High Jirn, a tour operator from Bull nak trans tropical trips in Semporna, stated that tourists from Sipadan have dropped by 60% since the 2000 Sipadan kidnappings. He further states that in some European countries, travel advisories are still in effect and unfortunately, due to widespread pessimism and the world economic downturn, some scuba diving enthusiasts are putting off travels due to fears of safety and affordability.
4. Coastal Communities and Maritime Insecurity
Naval and military activity off the Somali coast has led to a decline in the number of fish catches in the north. This has led to a rise in illegal fishing by foreign tuna and shark fishing fleets. Increased human and financial losses of these foreign boats from pirate attacks have caused neighboring coastal states to accuse the foreign fishermen of being the cause of the piracy and thus supporting their own fishing industries. A number of these states, including Kenya, Tanzania, and Yemen, have called for the foreign fishing fleets to provide protection for their fishing vessels and compensation for the damage caused by illegal and legal fishing in Somali waters. In September 2007, the Seychelles, whose principal food source and only renewable natural resource is its Exclusive Economic Zone, was the first state to declare a total ban on fishing by foreign vessels in reaction to the increased piracy and hijackings in the region. Coming from one of the smallest and most vulnerable maritime states in the Indian Ocean, this decision reflects the recognition by states of the link between maritime security and the sustainability of their fishing industries. By banning foreign fishing vessels, the Seychelles hopes to eliminate any possible connection between piracy and the fishing industry and protect its fisheries and the employment opportunities they provide for the citizens of the Seychelles. This decision was supported by the ministers of agriculture and fisheries of the African Caribbean and Pacific group of states, who have asked for the EU Common Fisheries Policy to be reviewed in cases where it has a negative impact on ACP states’ fishing industries. This includes the situation in the Gulf of Guinea, which is suffering from problems with overfishing and illegal fishing of tuna by foreign vessels, an area which has also seen attacks on civilian mariners and oil and gas platforms.
Impact of maritime insecurity on the economic activities of coastal communities and the implications for human security: A case study of fishing in the Gulf of Aden.
4.1 Livelihoods and Fishing Industry
Coastal communities are likely to feel the impact of maritime insecurity most acutely due to their dependence on the maritime environment for survival. This environment encompasses much more than just the sea; it includes the shore, wetlands, estuaries, creeks, and rivers. Destruction of this environment has far-reaching consequences for the communities that depend on it. The most common source of income for these communities is small-scale, artisanal fishing and fish processing. This form of fishing is a labor-intensive, low-tech, traditional, and in the case of the Gulf, mainly a seasonal activity that relies on the natural abundance of fish and invertebrates in nearshore areas. Seasonal weather patterns are very important in determining fishing activities and the direction of these activities has a large bearing on the vulnerability of the fishing communities to hazards. An onshore wind, for example, may cause some fishing communities in the Gulf to remain in port and consequently lose earnings. This form of fishing is particularly vulnerable to any form of resource degradation, whether it is contamination from oil spills or depletion of fish stocks caused by a shift to alternative livelihood strategies, for example, smuggling. Smuggling can take many forms ranging from the smuggling of drugs or arms to illegal immigrants or stolen cars. This work will focus primarily on the smuggling of weapons and its impact on the livelihoods of fishing communities in the Northern Emirates of the UAE.
4.2 Environmental Consequences
The environmental consequences of maritime insecurity in the Middle East are both widespread and long-term, affecting shipping lanes, coastal waters, and regional states. Whether through conflict, smuggling, or piracy, maritime insecurity has led to a sharp increase in oil and other toxic substances being spilled into the Gulf water and the Sea of Oman, the primary causes being operational accidents or deliberate spillage to avoid confiscation. According to a report in 2003, around six million barrels of oil, roughly 9 times the amount released during the Exxon Valdez disaster, has entered the Gulf per annum since the early 1980s. Oil spills cause immediate physical damage to the marine environment through smothering and poisoning of organisms but the long-term effects can be even more damaging, changing the population structure of biological communities, reducing the resilience of affected organisms and the environment they inhabit. In addition, conflicts and acts of piracy affect the location and type of traffic through marine environments. Major changes occur to shipping routes and the shipping industry becomes more reliant on the use of smaller, older ships with less advanced equipment and containing hazardous materials. This in turn increases the risk of operational accidents and the potential for further pollution of the marine environment.
Another significant environmental impact of maritime insecurity is damage to marine ecosystems and depletion of marine resources, particularly through overfishing. Conflict and acts of piracy lead to a breakdown in effective management and regulation of fisheries, allowing for drastic increases in illegal, unreported, and unregulated fishing activities. Such activities often involve the use of highly destructive methods. For example, during the 1980s the Gulf, Sea of Oman, and Red Sea became a haven for shrimp trawlers from countries such as Egypt, Iraq, and Kuwait. Ecosystems such as coral reefs were damaged, pushed towards a state of long-term degradation. By the mid-1980s, the overexploitation of shrimp stocks and incidental trawling of other species led to a reduction in the total catch and the local extinction of some important commercial species. In recent years, the Gulf has seen a significant increase in fishing effort for various species, again largely due to foreign fleets seeking to exploit resources in less secure states. The caught of so-called ‘commandos’ carrying out operations under cover of darkness have taken to using blast or spear fishing due to its high profitability. A single explosive charge or compressor-driven spear can cause an enormous amount of damage for an individual, and the combined effect of such activities is having a serious impact on marine ecosystems and the sustainability of resources in the region.
4.3 Social and Cultural Impacts
The social and cultural impact of maritime insecurities in the Middle East is something that will affect generations to come. The Gulf area in particular has been a dense urban area for more than 7000 years. Persians, Greeks, Romans, and Babylonians all have history in this area. It is home to a unique culture and soul. The Gulf populations are still dependent on income coming from the sea. Iran and Iraq have both been increasing development and GDP; however, they still rely on the fish stocks in the Gulf. Fishing is one of the few continually profitable businesses in the region. With increased shipping and military activity occurring near the mouths of the Tigris and Euphrates rivers, local fishermen are finding that they cannot access once lucrative fishing spots. This has led to some tensions between the local fishing communities and naval forces. United Arab Emirates has a history of traditional pearling and it was once a main export industry. However, due to climate, economic and social changes, the pearling industry went into decline by the 1950s. It was the recent wars in the Gulf region that have all but destroyed the last remaining links to this industry. For many local people, it has taken away a sense of tradition and cultural heritage. Coming from a once booming oil industry, Kuwait has been working on restoring their environment and natural resources. Marine pollution in Kuwait has decreased, but persistent contaminants still come from surrounding countries during wartime. The results of oil, smoke, and soot can be found on shipwrecks and rusting hulks from the latest wars. This becomes unsightly for Kuwait residents and the future generation who would be unfamiliar with the cause of damage. High levels of marine traffic and war in the Gulf have also led to various forms of physical damage to the environment such as, but not limited to, oil spills and degradation of coral reefs. An ex-Iraqi naval officer once recalled that the highest concentration of shipwrecks and pollution in the Gulf is near the Iran-Iraq disputed territories. This continues to prevent Iraq from access to, or restoration of resources lost during the war years with Iran.

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