Somaliland: Withdrawal of international money transfer services will negatively impact the poor, says columnist

Author: Michela Wrong, in Foreign Policy, Published on: 26 August 2014

"Franchise Opportunity: Western Union in Somaliland?" 25 August 2014

Remittances to the Somali region alone are estimated at $1.3 billion each year. But these transfers now risk becoming impossible: Long-standing Western worries that remittance flows serve as a cover for money laundering and the funding of armed Islamist groups mean the taps could soon be turned off. Barclays's decision in May 2013 to close the accounts of the money-transfer operators that dominate remittance flows in the region -- postponed but not rescinded as a result of a British High Court injunction -- is fueling mounting dismay in Hargeisa, the capital of Somaliland, a self-declared republic in northwestern Somalia. "I really don't know what is going to happen. We have been shouting and screaming," says Minister of Planning Saad Ali Shire...The remittance issue raises the specter of a financial crisis, which would coincide with what agricultural experts predict will be the region's worst drought since 2011, expected to lay waste to crops and livestock..."At the end of the day, the money will still come in, but at much higher transaction cost and with less transparency," says Shire, Somaliland's minister of planning. "So who do you punish by doing this? Is it the pirate, the terrorist, or the poor man?"

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Related companies: Barclays Western Union