Informal money transfer services offer a resilient source of income for some 40 percent of Somali households that lack other meaningful sources of income, let alone access to basic financial services. With $1.0–1.5 billion being remitted from the diaspora each year, remittances serve as a vital lifeline to Somali communities. Yet growing concern over terrorist and criminal exploitation of poorly regulated remittance flows—as demonstrated by Barclays decision to discontinue the accounts of money transfer companies by the end of September 2013—threatens to place the livelihoods of millions of already vulnerable Somalis in jeopardy. Capitalizing on Trust explores the complex economic, social, and political impacts of Somali remittances and offers ideas for improving their regulation, including combating money laundering and countering terrorism financing, and harnessing the power of remittances to help rebuild Somalia.
Capitalizing on Trust: Harnessing Somali Remittances for Counterterrorism, Human Rights and State Building
As part of the Global Center’s expanding work on transnational threats, this policy brief examines the effects of “dirty money” on security and governance in West Africa and the Sahel. Illicit money, particularly from drug trafficking, is rapidly undermining the region’s political and economic governance, infecting legislatures, police forces, militaries, courts, and presidential offices, as well as chambers of commerce, in countries across the region. The brief considers the nature and provenance of these problems and some unorthodox ideas to tackle them.