Somalia: Balancing Remittance with Support for Terrorism
1840 Words8 Pages
Somalia has been a country of concern for the United States since the 1991 civil war led to the collapse of its government. Somalia borders the Indian Ocean and the Gulf of Aden providing an entrance and exit point to the Suez Canal; a vital shipping lane utilized by American shipping companies. The Somali's history and cultural responsibility to family have created an atmosphere where Somalis who have left the country continue to provide financial support to family members. The primary mechanism for sending money to family in Somalis is through the remittance1 or hawala2 system. The remittance system is fairly straightforward whereby an individual contacts an agent of the remittance company in the country where they reside, presents the cash they want to remit, pays the fees, and supplies information of the recipient. The agent then deposits the cash in a local bank account to be transferred to the company bank account, wherever that may be, while simultaneously contacting a clearinghouse with a description of the amount sent and details of the recipient. The clearinghouse then contacts the agent closest to where the recipient lives and delivers the cash completing the transaction (Abdusalem, 2002). This is very similar to something like Western Union only the reach into foreign locales is much greater. This paper will provide some historical perspective while seeking to contrast the benefits of using the Somali remittance system with its largest detraction; providing funds to the terrorist group al-Shabaab concluding with an outlook on the future of remittances from the United States to Somalia.
Somalia has, since its inception, been associated with trade and the exchange of goods. Between the seventh and tenth centu...
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