Piracy off the coast of Somalia is felt worldwide, harming trade, slowing regional development and preventing humanitarian aid from reaching the poorest nations of east Africa, according to a State Department official.

"Also, piracy is causing insurance rates to rise and increasing the costs of goods shipped through this region. So we are all paying a price for piracy," said Donna Hopkins, the State Department program manager on piracy issues, in a webchat May 26. She said Somali pirates are holding about 200 hostages, whom they use to extort ransom from shipping companies that want to get back their cargo, vessels and crew. About $30 million in ransom was paid to pirates in 2008, and the number of pirate attacks has doubled in the past year.

"Piracy offers quick money to young Somalis who have few alternatives that pay as well as piracy," Hopkins said. "Unfortunately for both these young men and their victims, piracy is a serious crime that damages their country's chances of recovering from civil war and building a sustainable future. International investors are unlikely to invest in a country where criminal gangs could threaten their investments. Piracy is organized crime, which makes Somalia less attractive as a place in which to invest to provide employment."

She detailed the steps the international community is taking to fight the menace: sending naval ships to interdict pirate attacks; helping commercial ships to protect themselves against pirate attacks; adopting legal procedures to prosecute pirates; helping the Somali government develop its own capacity to control its territory and bring security to its people; and discouraging concessions to pirates.

The international Contact Group on Piracy off the Coast of Somalia was established in January to focus on piracy in the Gulf of Aden and the Somali Basin. It serves as an informal venue for governments to share information about their policies and programs, Hopkins said.

Participating countries and organizations are encouraged to contribute to an international trust fund, endorsed by the group on May 29. Trust fund monies will pay for the prosecution of suspected pirates and other efforts to fight piracy. Courts in Kenya are holding trials for some accused Somali pirates.

"The Government of Kenya is rising to the challenge of helping to counter piracy by agreeing to try suspected pirates in their courts," Hopkins said. "Several countries, and most recently the European Union, are providing support and assistance to Kenya to help them build additional capacity to prosecute pirates."

In April, U.S. Navy SEALs rescued merchant ship Captain Richard Phillips, who was being held hostage by Somali pirates.

Following the rescue, President Obama said, "I want to be very clear that we are resolved to halt the rise of piracy in that region. And to achieve that goal, we're going to have to continue to work with our partners to prevent future attacks."

The head of the State Department's political-military affairs bureau, Stephen Mull, told the U.S. Senate Foreign Relations Committee April 30 that international efforts to stamp out piracy are beginning have effect.

"Naval patrol interventions are increasingly active, international naval forces have intervened to stop dozens of attempted piratical attacks in the past nine months, and we're seeing a significant upswing in the number of countries willing to commit assets to the effort," Mull said, although he conceded that political and legal obstacles remain.

Hopkins, in the America.gov webchat, said the Somali people must develop economic alternatives to piracy and create institutions to control criminal activity.

"Helping Somalia to stabilize and rebuild is very important, and many countries and organizations are trying to do that very thing," Hopkins said. "It will take time, much money, and ultimately, only the Somalis can stabilize and rebuild Somalia."