So what can we, in Seattle, do to help?
I hope this doesn't sound totally naive, but why can't they use a global service like PayPal or something? Anyone with a cell phone could access such an account, I'm assuming.
Great Question Callie! Definitely check out the hashtag #IFundFoodNotTerror. Also, senators are lobbying John Kerry to step in, this needs to be handled on a government level. I'm checking to see if there is currently a petition headed his way that people can sign.
#2 Shotsix: Somalia is a cash based economy with no banks. Actual cash has to be sent.
@2 Paypal and similar services rely on the recipient having a bank account. These remittance services go through a money transfer organization, and the person ultimately receives cash from a local store after verifying their identity (like Western Union).… <- has a good overview of how the system works.
@2 @5 Also, traditional merchants like Western Union do not operate there due to lack of security.
I wonder if a local credit union could step in.

Unfortunately, it probably isn't feasible for a local credit union to open branches in Somalia.
what is "community love"?
A recent New Yorker article on the trial of Basaa…, who was convicted of using the hawala system (informal Islamic money-transfer system) to fund terrorism, when the money was probably actually being used in defense against attacks by Ethiopia, makes it clear that the US anti-terrorism operation is a complete clusterfuck of incompetence that doesn't even have basic understanding of what the issues are (the war with Ethiopia, for instance). They just want more and more data, but they have no idea how to use it intelligently, which is great if you're a privacy advocate but sucks if you're a member of a targeted population -- and makes telling the difference between real terrorists and people just trying to send money harder, not easier.

The only option to hawala is people traveling to Somalia with suitcases full of cash, which is a terrible, terrible way to have to operate for many reasons.
@11, very funny.

@10, the sentence "we’re talking about the people who members of our community love" refers to people loved by members of our community, i.e., Somalis. I do wish the word "whom" wasn't disappearing.
@13: so dense today. that makes sense.

this is basically insolvable except by the feds. and if it requires the congress to do anything but say no, then Somalia is fucked (more).
The implications of an all cash society in a place with very little security seem too crazy to fathom. It would be a real life Mad Max movie with the biggest bully simply stealing everyone's money. You would live in constant fear (assuming you're not the bully).

And, what stops the remittance guy at the local store from taking a huge cut? The UN should have mobile financial institutions for these situations.
@15 The persistence of clan and tribal allegiances, as well as eye for an eye vendettas, stands in for a legal system in this scenario.
@15, often, Muslims won't use non-Muslim finance sources. They see them as violating religious proscriptions on usury, for instance. That's what hawala is for. It's a quite sophisticated system.
Terrific reporting. I was completely unaware of this situation. Let's hope it catches the attention of someone with influence.

But there are no banks there. A local CU doesn't need to open a branch there.

Which raises this: how does this actually work? Say someone here remits a hundred bucks for their cousin in Somalia at a bank here. I assume part of this involves electronic transfer. Who's the next person or organization to get a hundred dollar bill and how does the cousin get the hundred dollar bill?
@4 & @19: There are banks in Somalia.…
@20: Most of those listed are closed, and the rest are all one bank, with one branch.
No banks and even if there were banks Muslims wouldnt use them. Is that what I'm reading at #17? No Seattle solution so it's a State or Fed issue. Fed I assume. Does the USA community of Somalia people have any suggestions? If their own government won't help...
I am a Seattlite of Somali descent. I can explain the system to you guys.

Basically the system is called "Hawala" (Hawilaad in Somali). It developed precisely because Somalia disintegrated and international banks and transfer companies like Western Union cannot set up shop there.

There is no way to send anything to a needy kin in Somali through the international finance system.

To make something complex very simplified, Somalia may have lost courts and a functioning "state" apparatus but there is a highly complex customary tribal law in place called "Xeer" (pronounced Hare in English with a guttural Somali "H" ) which makes transfers of money unofficially very safe, reliable, and efficient through the "Hawala" system. Basically it relies on trust and Islamic code of honor. The consequence of breaking this trust is a brutal and vengeful tribal revenge that will engulf not only the person breaking the trust, but their families and kin. It is called "Aano Qabiil" (translation: Tribal Wrath). It is a deterrent and to my knowledge it hasn't been tested yet at least with Hawala business which shows you how reinforcing it is.

That's what keeps Hawala safe and efficient (responding to the commentator who said the money can just be "stolen by a bully"). So what is Hawala? There are multiple competing Somali service providers who have opened up accounts in Dubai linking them to international banks. These service providers then have offices in many places the Somali diaspora live. These offices are open to any Somali who wants to remit money to Somalia. Essentially an individual (in say Seattle) will go in and for service fee (5-10%) can send a maximum of $1000 at a time. He will name the recipient, their clan and sub-clan, and their phone number, and where in say Somalia. The service office will immediately send word to their sister office near the location of the recipient and immediately give the recipient their remittances. I mean almost immediately, less than a day at max. [Quoted for truth; even if Western Union could they couldn't compete with how Somalis find Hawala so convenient]. Meanwhile the money at the Seattle service office and service fee will be wired through an international bank to the Hawala's main account in Dubai (usually).

The person who originally sent the money is totally trustful that their money has been given to the recipient. No avenue of official arbitration if the service office for instance all of a sudden tries to deny. Yet, it works perfectly. 100%. Based entirely on a sacrosanct Xeer customary law and code of honor.

The issue here is that because of new regulations, the international banks that will wire the money from say the Seattle service office to the Hawala company's main account in Dubai can no longer provide that transfer because they can't meet the stringent bars set by the US government.

The irony here is that the entire system developed because there is NO OTHER AVENUE to send money. To understand how important this is...if the world thinks Somalia has been a humanitarian catastrophe, you can't imagine how it would be without Hawala. The world bank and Oxfam recently did a study where it found Hawala is the very reason Somalia eked along. Somalis remit almost $2 Billion every year, more than any other component of the economy and dwarfing humanitarian aid. Everything is remitted there from funeral money, emergency aid, health money, subsistence money, school money, food money.

It's just cruel to not find a way to let Somalis continue to remit to their families and relatives while finding a way to mitigate the risk new regulations analyze.

Please wait...

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