The argument put forward by the sector regulator, the Office of the Comptroller of the Currency, is that they are concerned that money from these remittance companies is somehow being funnelled to extremist groups in Somalia like AlShabaab which threaten global security. While this may be a plausible argument, there is limited evidence to support it where Somalia is concerned.
The effects of the new regulations are such that they provide no legal means of transferring money from Somali-Americans to their loved ones and dependents in Somalia who rely on it for their daily existence. The leaders of the remittance companies whom I spoke with regularly all expressed great concern that without legitimate US bank accounts and banking services to process their financial matters, it would be impossible for them to continue operating in any way, shape or form from America. The impact of this is genuinely catastrophic for all concerned.
The Somali remittance companies in America are legitimate businesses which create and provide employment, training, skills and a vital connection between loved ones forcibly separated by war and terror. They also pay taxes to fund public services and the impact on their operations will affect all their employees and local communities disproportionately. However, the vast majority of the pain will be felt in Somalia.
Somali remittances are without doubt a lifeline. The United Nations estimates Somalis in the diaspora send home around $1.6bn annually which is substantially more than the entire foreign aid Somalia receives annually from all sources. Much of these remittances are used for everyday needs by their beneficiaries such as food, clothes, education and shelter. There is little or no credible evidence thus far to suggest that any of these remittances find their way to terrorist organisations as is feared by the Office of the Comptroller of the Currency.
Somalia is steadily heading towards security, stability and peaceful progress. Of course, major challenges still exist but the Somali people no longer want the violence and destruction of the past and nor are they willing to give in to terror to be led back to this painful and disastrous period. The people I have met in Somalia are determined to go forward and herald in a new age of peace and prosperity built on the pillars of security, good governance and economic growth. This is why the once lawless and violent Mogadishu skylines are now dotted with cranes and construction workers while local markets are buzzing with activity and commerce.
The desire for change is in every Somali and, as stability returns, remittances from abroad are being used to invest in all sectors of the economy including real estate, education, health and the establishment of small to medium enterprises which will certainly be the real engine of economic growth going forward. This is the genuine impact of remittances from American loved ones on the ground in Somalia and, in order for this momentum to continue, the remittances need to keep coming.
Somalis are the greatest victims of terrorism both at home and abroad. As a result, terror groups like AlShabaab have limited support, if any at all, among the Somali people wherever they maybe. It is therefore unlikely that any remittance the average Somali person receives or sends from abroad will ever find their way into the pockets of terrorist organisations that seek to destroy their national ambition for peace and progress.
The security challenge to the world today from terrorist organisations is well documented and cannot be taken lightly. As these organisations become more sophisticated, the international community must respond with greater cooperation and vigilance. This means sharing data, intelligence and harmonising anti-money laundering and financial transparency laws and procedures. However, it should not be translated into totally cutting off the lifeline to the poorest people in the world who have no other option but to rely on their family members abroad to survive.
Without the legal means through which money can be transferred to Somalia via the Somali remittance companies in the USA today, there is a greater risk that these funds will find their way to the black market where they are virtually impossible to regulate or trace. The sad irony of the closure of the accounts of Somali remittance companies in the America is that, rather than disabling terrorists, they provide them with a golden opportunity to recruit poor desperate young foot soldiers for pittance and establish underground markets which will only exacerbate the problems of extremism, piracy and other related crimes which are real obstacles to Somalia’s national progress.
The government and people of the United States of America are valued allies and friends of Somalia and the Somali Federal government made very clear that it stands ready to work with the responsible institutions in the U.S in any way to ensure the transparency of financial transactions to Somalia through the remittance companies. This is an opportunity that ought to have been explored in more detail as the alternative, and current reality as of yesterday, disproportionately punishes the most vulnerable in the fragile but slowly recovering Somali state that used to receive remittances from their loved ones in America.
Indeed, in the near quarter century absence of functioning national banks, both the Somali government and people remain grateful to the remittance companies for responsibly and cost effectively providing an absolutely essential service, which without, Somalia would not be enjoying the progress it is today. This very progress that is widely celebrated internationally is endangered by the decision of the Office of the Comptroller of the Currency in the U.S because of its indifference to the potentially disastrous consequences it can, and is likely to have, on Somalia and its people.
In these difficult times, it is important that the U.S government chooses hope over fear and signals its trusts of the hardworking Somali people by reversing this pernicious and counterproductive policy.
Liban Obsiye
Email: libanbakaa@hotmail.com
Twitter: @LibanObsiye
