Mayors urge feds to find solution to Somali remittance crisis

Panel member, Abdihakim Hashi, of Itin Hawala speaks about his struggles as a owner of a remittance business in Seattle. (Photo by Jama Abdirahman / The Seattle Globalist)
Panel member, Abdihakim Hashi, of Itin Hawala speaks about his struggles as a owner of a remittance business in Seattle earlier this year. (Photo by Jama Abdirahman / The Seattle Globalist)

Seattle Mayor Ed Murray and other mayors from around the country on Monday urged U.S. Secretary of State John Kerry to take federal action to help Somali immigrants resume sending money to friends and family in Somalia.

In the past few years, U.S. banks have stopped offering Money Transfer Operations into Somalia, which does not have a formal banking system or transfer services. The banks cited the difficulty in meeting federal regulations aimed preventing money getting sent to terrorist or criminal organizations.

However, the transfer system, called hawala, is key for the families in Somalia that rely on money from friends and relatives working abroad.

“Like many immigrants, Somali-American families want to send financial support to their loved ones back home,” Murray said in a prepared statement. “These refugees who have found a better life in the United States are doing what any of us would do for their family members. The federal government must find a path forward to allow these remittances to continue.”

Nongovernmental organizations and charities that work in Somalia are also having difficulty sending financial resources to the country.

Members of the Somali community in Seattle told the Globalist earlier this year that being able to send foreign money to Somalia helps bring a measure of stability to that nation, which can help keep people from turning to crime or terrorist organizations.

Murray and Minneapolis Mayor Betsy Hodges crafted the resolution signed at the U.S. Conference of Mayors meeting in San Francisco. The two cities have the largest Somali populations in the United States. Murray met with Kerry during the secretary’s visit in May and discussed the issue of Somali remittance.

According to the press release from Murray’s office, Somalia receives approximately $1.3 billion in remittances each year and more than two million people depend on the money.

Oxfam America, an organization that has been working on the issue, reported last week the State Department has opened a $3 million grant application to bolster Somalia’s banking system by helping develop a banking infrastructure that can meet international standards. However, Oxfam America senior humanitarian policy advisor Scott Paul added that he was skeptical that the grant projects alone would solve the issue, and said the banks, which have voluntarily withdrawn from the system, should also be consulted.

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