Barclays bank says it doesn’t want to enable money laundering, but critics say it is cutting vital flows of money into the country.

By Tom Murphy/ August 13, 2013

Somalis are bracing for the impact of the British bank Barclay’s decision to sever ties with most money transfer companies in Somalia. About 250 remittance agencies lost their partnership with Barclays on Monday.

The banking giant says it is concerned that it does not know where money transfers are going and who is sending the money. With little ability to track cash flows, the company says it is much easier for money launderers and the financing of terrorist activities.

“It is recognized that some money service businesses don’t have the proper checks in place to spot criminal activity and could unwittingly be facilitating money laundering and terrorist financing,” said Barclays spokesperson Daniel Hunger to the UN humanitarian news agency IRIN.

Somalis living in and out of Somalia say that the plan will cut vital flows of money.

More money is sent to people in Somalia through remittances ($1.2 billion) than is provided in international aid (~$800 million). The sum of remittances accounts for roughly half of Somalia’s gross national income (GNI). Money set by family members living abroad helps to support the education of siblings or a parent’s business. Various vendors have proliferated across Somalia as a result of the amount of money flowing both in and out of the country through person to person transfers.

It is not only people who benefit. NGOs and civil society organizations use cash transfer services to process cash disbursements and budgetary funds. For instance, British-Somali Olympic gold medal winner Mo Farah issued a call for Barclays to reverse its decision, citing the impact it will have on Somalis and charities like his charity.

“The Mo Farah Foundation, along with some of the world’s biggest charities and organizations, including the UN, relies on these businesses to channel funds and pay local staff,” he said in late July. “This decision could mean life or death to millions of Somalis.”

Somali President Hassan Sheikh Mohamud pleaded with Barclays in June not to go though with the decision. He expressed concerns that the progress made by Somalia over the past few years may be set back.

“Somalia is on the brink of a breakthrough after two decades of chaos. We have the support ofBritain and the world and we need the support of all our friends across all sectors. Barclays are a friend and we cannot understand their sudden decision to foreclose on legitimate accounts that support money transfer,” said Mr. Mohamud.

British politicians also urged Barclays to consider delaying the implementation of its new policy. Forty-Seven Labour ministers of parliament sent a letter to Barclays and the government to consider waiting six months.

They recognize that the decision by the United States to fine the bank HSBC $1.9 billion for its weak money laundering checks has an impact on Barclays. They say that the reaction is too harsh and will also damage the British businesses that participate in the sending and receiving of money with Somalia.

Electronic money transfers are the most efficient way to send money home, writes Somali Nadifa Mohamed in the Guardian. She says her father used to have to deliver the money he made by hand to his family in Somaliland. Now Ms. Mohamed can send money almost instantly to her family who are still do not have easy access to paved roads.

Her family is not alone – an estimated 40 percent of people in the region are reliant on remittances. She says it may be a conservative guess, nevertheless it means major cuts will have an immediate impact on regional families. And there are the 80 percent of Somali businesses that use remittances for starting up funds, said Mohamed Ali, who runs the Somali NGO Iftiin Foundation, to Al Jazeera.

Electronic cash transfers are a major technological jump in Africa. Kenya’s MPESA, a service run by phone company Safaricom, allows people to send money from one cell phone to another. It can be used to make a purchase at a street-side business

Many recognize that Barclays is concerned about funding terrorist networks in Somalia. They say that should not scare the bank away, as it has for other major transfer providers. Rather, leaders should look for regulatory solutions, Mr. Ali writes.

The regulatory burden for monitoring Hawalas (the traditional money transfer system) should be placed on the government and not banks, with clear guidelines that limit bank obligations and government officials in charge of due diligence and risk evaluation of remittance agencies. Banks, regulators and Hawala operators also need to work together to develop due diligence and monitoring strategies that work within the Hawala framework, which has its own system of checks.

185 Somali civil society groups add to the list of advocates for a change to Barclays’ pending policy change. The UK government has responded to the growing chorus by saying that it is a private decision by the bank. The changes are still on course to be enacted.

Somalia’s economy has been seriously weakened by the devastating civil war. In this part, agriculture is considered as the most important sector for livelihood as the livestocks account to 40% of the GDP and 65% of export earnings. In this area, a large portion of the population is occupied by the nomads and semi nomads. They directly depend on the livestocks growing in this land. Well, the small industrial sectors, based on the processing of agricultural products have been shut down due to the civil strife. However, there is a constant intervention in Somalia economy by the Italian Fascists, Somalia Marxists and International Monetary Fund (IMF) economists for restoring the economy.

The IMF has set three agendas on the list in order to rebuild the Somali economy. At last after 22 years, IMF extends its support to check the Somali economy. As a matter of fact, the focus is on restoring security and to meet humanitarian needs, establish institutions and offer services to the citizens. So, IMF is trying to establish central bank as well as fiscal institutions in Somalia.

Recently, the Federal Government of the Somalia received international recognition. So, it’s easier for the IMF to provide technical support as well as offer policy advice to war devastated east African Nation.

After two decades, the IMF is trying to bridge the gap with Somalia and it is attempting to understand country’s current economic and institutional facts. In fact, Somalia has been severely affected with constant internal conflict over 20 years. During this phase, the Somalia didn’t have a central government that got international recognition. Previously, IMF didn’t have a counter government with which it managed to coordinate.

In 2012, the situation started improving with the election of the new Federal Parliament along with broad representation from all across Somalia. In this situation, President Hassan Sheikh Mahmoud elected as the head of the new Federal Government of Somalia. He and his team governed the nation successfully and managed to build friendly relation with the international community. The Federal government allowed the IMF to provide Somalia technical help as well as advices on implementation of different policies.

As a matter of fact, Somalia is considered as one of the poorest and least developed country in the world. Its horrific past in relation to the civil wars and internal conflicts took a toll on the country’s infrastructure as well as human capital. In this part, most of the Somalis escaped to other countries for better education and life. Well, the economy of this country is largely based on agriculture and fishing. This part of the economy is sluggish due to fractured nature of the country and has suffered setback in terms of infrastructure development.

However, the Somalia’s federal government is focusing to restore peace and security of the country that addresses immediate need of the population that has been trampled by the long civil war. Therefore, the Federal government requires cooperation from the International partners restore peace and stability in the country with the help humanitarian aid.

In collaboration of Federal Government, the IMF is planning to build capacity in the key economic agencies like the ministry of finance, the central bank, and the statistics office. The Ministry of Finance managed to raise capacity as well as control public finances. The central bank staffs will be assisted by the IMF for developing the ability to license and monitor commercial banks. In addition to this, the IMF will also assist to establish functioning domestic and international payment system. They may prioritize in restoring systems to collect and process vital economic data in the areas of national accounts and price statistics, money and banking along with the public finance.
But the IMF has avoided providing new loans to Somalia and extending its support to clear the pending liabilities of the country to IMF. In this situation, the IMF is only concentrating on providing technical assistance and advice the authorities on appropriate macroeconomic policies. A sound economic policy is being established for the betterment of the country.

By Savion Sage

SomalilandPress.Com

Date: 31^st May 2013

To: H.E Ambassador Sayid Sherif Hassan

Somali Ambassador in Pretoria

South Africa

Dear Ambassador Sayid Sherif;

I write for a two-fold purpose; first to express my sentiments on the establishment of the Somali embassy in Pretoria, and then to suggest on impact projects that the embassy may become involved.  I have been resident in South Africa for well over 13 years – a period in which I gained insight into the socio-economic and academic structure of our host society.

Congratulations on your appointment as the ambassador of Somalia to the Republic of South Africa. I am delighted at the opportunity to serve Somalia accorded to you. You have no reason to be alienated as Somalis have established themselves as a participative community. Welcome to South Africa.

I am writing this very important communiqué as it coincides with the 50th anniversary of the Organisation of African Unity (OAU), the forerunner of the African Union (AU).

Over the years, the search for a better life saw us (as the Somali community) migrating to South Africa. A better life some have found, nonetheless the thought of a lack of such back home leaves a fowl taste in the mouth. The Somali community is therefore motivated to contribute to the development of Somalia and at the same time plough back to South African society.

Further, the presence of an embassy now gives impetus to this cause, knowing our individual and collective rights are now protected, even in a foreign land. Receive therefore our pledge to support efforts toward the progress of Somalia in the re-making.

A number of issues are contentious. What resonates with many are memories of the violence against Somalis and xenophobic attacks against migrant Africans at large. Most regrettable, are the remedies to this phenomenon which have not been pragmatic and failed to eliminate xenophobia in totality.

In a country whose Truth and Reconciliation Commission is renowned as a classic case study, it is unfortunate the principles of the TRC have not been implemented in dealing with hate crimes such as the very current horrific scenes and hate related crimes taking place some of the informal settlements within Gauteng, Free-State and in P.E in the Eastern Cape. Fairly so, the host government is not solely responsible for amicable community relations and integration. This is the opportunity for the embassy to move beyond administrative routines by engaging the South African citizens.

Through various higher institutions in S.A including; GIBS in the University of Pretoria’s Social Entrepreneurship Programme, Wits Business School, UJ and other civic organisations and social enterprises, a Social Entrepreneurship program is proposed. In this entrepreneur skills hands-on and practical course to empower youth and communities we trade with, I’m working hard with Somalis businesses like Salama Cash and Carry to enhance the outlook of township retailers by transferring soft skills, while the hard skills will be exchangeable as well.

The objective is to diminish negative sentiments and utterances against our community and make integration with host society easy and successful; the programme can then be scalable to others. This is also serving as a public relations vehicle for the Somali government, showcasing their contribution towards the disadvantaged youth who are unemployed and mostly unskilled/unemployable and general communities’ development in South Africa. Meanwhile tensions amongst Somali and South African township retailers will subside and social integration will take place throughout this beautiful country.

I wish to discuss this amongst other ideas with you, at the earliest opportunity. The scope of discussion ranges from the involvement of the embassy in this social entrepreneurship program, to establishing Somali-South Africa trade forums. Kindly advise if I should furnish you with particular details.

Thank you

Sincerely

Mr. Saeed Furaa

Mr. Saeed is a Social Entrepreneur, Freelance Journalist, Entrepreneur, founding president of the newly established Horn of African Social Entrepreneurs in South Africa.  HASEFSA are passionate about addressing socioeconomic and environmental challenges from South Africa to Horn of Africa.

Saeed has also chiefly contributed in the establishment of Salama Cash and Carry (biggest Somali owned Cash n Carry in South Africa) and served as a member of its executive board.

Johannesburg

South Africa

E-mail: hasefsa@gmail.com

E-mail: sedsa.edu@gmail.com

E-mail: saeed@salamacashncarry.co.za

Friday 9 August 2013

The closure of UK bank accounts belonging to cash-transfer firms would force many people to find new ways of sending money home. What are the alternatives?

Studying in Istanbul on a full government scholarship, Somali student Nur Hassan Bukhari is worried that attacks targeting Turkish interests could derail relations between the two countries.

“It was brutal,” Bukhari told Al Jazeera of a bombing on the Turkish mission in Mogadishu on July 27. “Al-Shabaab always wants our country to become lawless. I hope our relations with Turkey will not suffer.”

A Turkish police officer was killed along with three attackers when an explosives-laden car rammed into an office building housing the Turkish embassy staff in the Somali capital.

While the killings shocked the Turkish public, analysts are not suprised that al-Shabaab claimed responsibility for the bombing.

The al-Qaeda-linked group has long opposed the Turkish presence in Somalia. Denouncing Turkey’s involvement as a cover for Western invaders, al-Shabaab posted a message on Twitter to justify the attack.

“The Turkish are part of a group of nations bolstering the apostate regime and attempting to suppress the establishment of Islamic Sharia,” it read.

Al-Shabaab  was forced out of Mogadishu by Somali and African Union forces two years ago. In August 2011, Turkish Prime Minister Recep Tayyip Erdogan traveled to Somalia, making him the first non-African leader to visit Somalia in the past two decades.

Erdogan brought a plane full of ministers and consultants with him, during one of the worst famines to hit the Horn of Africa in 60 years. Since then, Turkey has launched a major diplomatic, economic and humanitarian effort in Somalia.

Soft power

“Turkey gave more than $1bn in humanitarian aid in 2012,” the Global Humanitarian Assistance 2013 report says , making it the fourth-largest donor in the world. In 2011, Somalia was the largest recipient. According to the Turkish Prime Minister’s Office of Public Diplomacy, Turkey sent $365m in cash and in-kind aid to the country last year.

There are hundreds of Turkish relief workers in Mogadishu . Among 20 Turkish aid agencies operating in Somalia, the Turkish Red Crescent and Turkish International Cooperation and Development Agency are playing an active role in rebuilding the country.

They have assisted with drilling boreholes across the country, building hospitals, rehabilitating parts of Mogadishu airport and restoring some government buildings, including the National Assembly.

In March 2012, Turkish Airlines became the first international airline in two decades to operate regular flights to Mogadishu’s Aden Adde International Airport.

Turkey hopes to gain not only from Somalia’s potential oil reserves, but also wants to play an active role in Africa’s emerging markets.

The Turkish Ministry of Economy has been implementing the “Strategy for Enhancing Trade and Economic Relations with African Countries” since 2003. Turkey’s exports to the continent grew four-fold between 2003 and 2011, leaping from $2.1bn to $10.3bn. The number of Turkish embassies in Africa increased from 12 in 2009 to 34 in 2013.

The Turkish parliament approved an agreement last November to train Somali security forces. This policy, according to Abdullah Bozkurt, Ankara bureau chief for the newspaper Today’s Zaman, was the motive behind the al-Shabaab attack on the Turkish mission.

“The security dimension is a direct challenge to al-Shabaab and al-Qaeda affiliated groups because Turkey, a country that has been fighting with terror groups for years, can make a difference in training Somali forces on how to address to the terror issue,” Bozkurt told Al Jazeera. “I believe the aim of the attack is to deter Turkey from engaging further in rebuilding Somalian security forces including intelligence service; a kind of warning to the Turkish government to stay away from Somalia.”

Security forces knew an attack would be possible, diplomats said.

“There was a threat to Turkish institutions, that’s why the sandbags were placed to the outer walls of buildings. We warned the Somali police, but unfortunately they didn’t take the necessary measures,” Turkey’s ambassador to Somalia, Cemalettin Kani Torun, told Al Jazeera. “If they [had] prevented the vehicle coming to our front door, this incident wouldn’t [have] occured.”

“The message to us is to get out of here, but of course we will stay and complete the projects we’ve launched; that’s what the vast majority of Somalia request.”

The recent bombing was not al-Shabaab’s first attack against Turkish targets. In April, several Somalis were killed and three Turkish officers injured when a humanitarian convoy of the Turkish Red Crescent was hit in a bomb attack in Mogadishu.

Al-Shabaab’s largest attack was in October 2011. It wasn’t directly targeting Turkey’s convoys or buildings, but rather its humanitarian efforts. A suicide truck-bomber killed more than 70 people, many of them students and their parents, waiting for the results of scholarships offered by Turkey outside of the Ministry of Higher Education.

The Somali Students Union in Turkey states that there are around 1,600 Somali students who live and study in Turkey, and 99 percent of these students received scholarships. But it is rare for Somali students to complete their studies in Turkey. Many have other plans, like Nur Bukhari.

“I am planning to return home soon to serve my people and my country with what I had studied so far,” Bukhari said. “My country needs educated people who can turn this bad situation into a good one.”

Follow Dilge Timocin on Twitter:  @dilgetimocin

The international community at large have eye witnessed the misery of Somalia ever since from the collapse of Siyad Barre regime in 1991. The departure of the regime is followed by a power vacuum, which generated a supremacy struggle between the various political factions, tribal leaders, war lords, piracy groups and terrorist groups

Even though the international are fully acquainted the agony of the Somali people, however, a nominal assistance have been extended, although the world community are viewer for the uninterrupted thorny circumstances for the Somali people over the last twenty years throughout all the worldwide news bulletins.

Had the Somali exchange houses such as Dhabshil were not accessible to deliver the transfer of funds throughout Somalia; it is understandable that, situation would have been much worse in contrast with the present.

In reality, there are many stable quarters in Somalia and in particular Somaliland or Puntland, which the intercontinental banking system is absent due to lack of political reorganization, in the case of Somaliland.  in view of the of the above, the only means, in which the Somalis here in United Kingdom extending support to their suffering blood related relatives at home, is through the exchanges houses in the country, principally Dahabshil, which have strongly gained the people’s hearts and minds in view of the trust, which they have built with the people owing to the long sustainable service with their clients.

Despite of the above fact, recently, we have become aware through the media, that Barclays Bank, in which these exchange houses were dealing for a long time with regard to transmittal of finances is about to end their business cooperation with the exchange houses, which will harm over millions of lives, in the event the bank execute their old declaration regarding discontinue business dealing with Dhabshil.  It is worth to bring up that most of the clients dealing with Dahabshil with regard the remittances issue are British citizens originated from Somalia.

Taking into consideration the catastrophe consequent in the event the Barclays Bank convert into reality, we the Somalis here in United Kingdom appeal the bank management reversing their old announcement in order not make worse for the circumstances over millions of lives, which are already in agony condition.

Likewise, we call for the British government to get involved the standoff in the favor of millions of suffering lives. Total punishment for millions of lives is against the human rights acts, since the same preaches the protection helpless lives. We look forward hearing pleased end result with regard the subject of concern soonest        

Ismail Lugweyne.

M.Arrale

Had the latest attack that targeted the Turkish embassy in the Somali capital of Mogadishu achieved its desired damage, losses would have been far higher than they were. The vigilance of the guards, who killed some of the attackers before they could detonate their explosives, prevented their plan to take out Turkish diplomats and security figures. It would have been the largest such attack to date.

The Al-Qaeda-affiliated Al-Shabab movement released a statement claiming responsibility for the attack. In it, the group justified targeting Turkey because its policy of “supporting the apostate regime [in Somalia] and seeking to suppress the Shari’a order.”

We were about to accept this scenario, which is considered logical given that Turkey—especially over the last five years—has increased its reconstruction, development and humanitarian projects, which extend far beyond Somali borders. Turkish embassies have become active missions that work around the clock to block such organizations from finding supporters, according to the Turkish foreign minister Ahmet Davutoğlu.

We were also about to believe that the attack was the price paid by Turkey and many other countries for going to Somalia and trying to provide peace between warring groups and end the lengthy civil war. These countries, however, abandoned Somalia amid a political and security vacuum, competing to take a piece of the African pie under international cover and direct intervention of the regional and international organizations as well as military and security presence there.

However, Ankara’s direct accusations of international powers infuriated by Turkey’s involvement in Somalia—an activity that has reversed the traditional considerations in the horn of Africa—have directed attention towards another scenario. This scenario is directly related to new regional players in this region.

In fact, this region contains the world’s most strategic waterways and perhaps what adds to its value and importance is the discovery of oil and precious metals. Davutoglu’s statements regarding the role played by some international powers in the attack leads us to a new conviction about the attack and the reasons behind it. In fact, it prompted us to entertain a number of possibilities, by viewing the attack as an attempt on the part of some sides—whose influence has receded and interests threatened by Turkey—to settle scores with Ankara.

Turkish political and security analysts dramatically took us back to the starting line by talking about those responsible and their interests in carrying out such an attack. This time, we were told that internal and external forces were conspiring against Erdoğan’s government and wanted to exclude Islamists from power. This was in the framework of a comprehensive plan, that had been developed, funded, and then carried out by Al-Shabab for the conspirators’ advantage.

A few days ago, the Greek Navy intercepted an inflatable boat transporting weapons and explosives to Turkey. Those detained confessed to preparing a campaign of assassinations of senior politicians and officials. This strengthened the argument that forces inside and outside of Turkey were behind the Mogadishu plot.

But the most likely possibility remains that Turkey is paying the price for changing its policy and attitudes towards extremist organizations that have obtained services and facilities, disregarding the movements on the Syria-Turkey border. Ankara and its allies are involved in more than politics and diplomacy with those that are against them. These forces wanted to warn Erdoğan’s government from any attempts to block their important supplies, and that any attempt to make new alliances in Syria should take them into consideration.

The message from Mogadishu reminded Turks of the bombings in Istanbul nearly a decade ago, carried out by Al-Qaeda. It also reminded them that Ankara cannot trust or be involved with these groups, which refuse partnership with any party unless it sets the terms and conditions. Moreover, that Salih Muslim Muhammed, the secretary-general of the Democratic Union Party, and Turkey’s arch enemy, has been welcomed by Syria will not be accepted even if Ankara had to prioritize fighting Kurds in Syria over fighting the Syrian regime.

by : Samir Salha

book review: Most of Fergusson’s book explores the reaction of Somalia to outside intervention, which he concludes doesn’t curb famine or violence.

When James Fergusson, a journalist based in Edinburgh, Scotland, decided to write a book about a chaotic African nation, he initially had no clue that his research would require a visit to Minneapolis.

It turns out that one of the largest populations of Somalis outside their national borders is in the Twin Cities. Some of those residents are almost surely linked to violent organizations overseas and thus might constitute a terrorist threat, according to Fergusson. He was drawn to Minneapolis in large part by the presence of Omer Abdi Mohamed, a resident who had pleaded guilty to a U.S. government charge of conspiring to recruit warriors for possible illegal activities within and outside North America.

Beyond Omer’s case, Fergusson wondered why the Twin Cities had become the destination of between 75,000 to 100,000 Somalis, especially given the frigid weather — frigid, at least, compared with the parched heat in the Horn of Africa.

Here is part of the answer, in a fascinating paragraph written by Fergusson: Lutherans whose ancestors arrived from Scandinavia to settle Minnesota run social service agencies efficiently and generously. “A number of voluntary Somali migrants, mostly professionals with ambitions to study or to set up businesses, had been drawn to the Twin Cities even before the [Somali] civil war by the abundance of jobs and social housing on offer, at a time when the local economy was conspicuously booming. Word soon spread of the good life in Minnesota, making the state the destination of choice when the main refugee exodus began in the early 1990s.” When Fergusson visited Minneapolis, he identified “the de facto parliament of the Somali community” as a Starbucks coffee shop just off Riverside Avenue.

While in the Twin Cities, Fergusson concluded that the large refugee population consists mostly of hardworking Somalis. But he demonstrates that the recruitment of suicide bombers has occurred in the Twin Cities, and that various gangs of Somali refugees have shattered the peace of the Twin Cities from time to time.

Most of his book, “The World’s Most Dangerous Place” (DaCapo, 405 pages, $27.50), is set in Africa, not the Twin Cities. In Somalia, Fergusson tries to understand the reasons for and the blowback from the invasion of U.S. troops, as well as troops supplied by other nations.

The interventions seem unlikely to halt the civil war there or the mass starvation that has resulted. No nation wants to be thought of as the world’s most dangerous place. Somalia, however, is deserving of that appellation, Fergusson insists.

Steve Weinberg is the author of eight nonfiction books. He reviews books regularly for the Star Tribune.