Somaliland: Searching for a Solution for Somali Remittances


Somali Americans gather to discuss the issue of Somali remittances at the New Holly gathering hall on March 31 Jama AbdirahmanThe Seattle Globalist

Somalilandsun – Money transfers from people in the U.S. to relatives in third-world countries continue on a spotty basis even after the last bank handling such transfers abandoned the practice earlier this year.

Shukri Olow is worried about a 15-year-old relative in Somalia. He is target recruiting age for the al-Qaida affiliate al-Shabab, a militant group in the country, and the best way to ensure he stays out of their hands is to keep him in school.
Problem is, her family here in Seattle can’t figure out a direct way to send him money for the school fees.
“[My aunt] is going to send money to his uncle in the U.K., who is going to send it to an uncle in Nairobi, who is then going to send it to an uncle in Mogadishu,” says Olow, who goes on to explain that the convoluted process is worth it. “It’s … $200 to save a kid’s future, you know?”
Olow’s family is only one of thousands of Somali-American families in Washington and across the country that are struggling to find ways to get money, also called “remittances,” back to loved ones in Somalia.
In the past Money Transfer Operations (or “MTOs”) here in the U.S. worked with counterparts in Somalia (a country with no formal banking system) to move funds. This system required an American bank that helped settle accounts between the two MTOs by regularly wiring money to the country (which has no money-transfer services like Western Union).
But this method, often referred to as hawala, or “transfer” in Arabic, has all but disintegrated over the years. The system has been used by a few to send funds to al-Shabab (there was one such case in Kent last summer). Resulting federal restrictions have spooked U.S. banks that fear they can’t comply. One, by one, banks have announced an end to money-transfer services to Somalia — essentially cutting off a crucial lifeline to this fragile nation.
I wrote about this a year and a half ago, when Barclays bank declared it would no longer provide transfer services between MTOs, and again in February, when one of the last banks providing this service in Washington state — Merchants Bank of California — also decided to call it quits.
Now, a little over a month after the Merchants Bank announcement, spotty MTO service continues for the moment. According to Oxfam America, a nonprofit working on this issue, some banks are still doing money transfers to Somalia — though only in small amounts.
But a permanent solution ensuring a secure, transparent system for sending remittances to Somali (which by Oxfam’s estimate accounts for between 25-45 percent of the country’s economy) was what people were looking for Tuesday night at a town-hall style meeting between the Somali community and local officials.
“It literally impacts everyone that I know,” said Olow who was at the crowded New Holly Gathering Hall in the Rainier Valley neighborhood offering her testimonial alongside others who spoke of remittances that pay for medical bills, education and basic living expenses.
Elected officials at the meeting — which was organized by immigrant-rights group OneAmerica — expressed their support but made clear that a solution must be found at a federal level, where international-banking policies are decided.

Somali Remittances campaigners outside Barclays Lomdon/file
“It’s a frustrating situation,” says congressman Adam Smith, who represents the 9th District (and area with many Somali-American residents) and has done much in recent months to push the remittance issue in D.C., “They’re still not addressing it, and all you can do is keep pushing it.”
Smith — who says he has met with the Department of the Treasury, the Department of State and the National Security Council — says the key is linking remittances and national security.
He argues that hawala system doesn’t support terrorism, but instead helps to defeat it by providing resources and support to a vulnerable population beset by poverty and conflict.
“Why don’t we stabilize Somalia so there aren’t any bad guys in Somalia?” asks Smith.
Olow agrees that remittances help stabilize her home country but worries solutions won’t come fast enough.
“There isn’t tons of time …” says Olow, “The next al-Shabab member could be a 10- year-old who doesn’t have basic necessities or education anymore because he doesn’t have that [remittance] money.”
Washington, D.C., may not care about that, but it should. Sourced from seattletimes
Sarah StutevilleThe author Sarah Stuteville is a multimedia journalist and co-founder of The Seattle Globalist,, a news site covering Seattle’s international connections. Sarah Stuteville: Twitter @SeaStute