Pardee-CFLP-Remittances-TF-Report

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“bilateral and multilateral exchanges of hawala debts involving hugely consolidatedtranches of funds can be lined up and swapped on a global scale” (29). Insuch exchange hubs, the digital movement of hawala funds is routed throughother global financial centers, including New York and London (Ballard 2003).On the one hand, connections to the formal sector are therefore integral to thefunctioning of the hawala system at the global level, as ultimately “virtually alltransactions are settled through the formally organized banking system” (28). Onthe other hand, the constituting principle of hawala networks where reciprocitiesoperate on a personalized basis remains rather different from the formalbureaucratic underpinnings of the banking sector. As Ballard points out, the hubin Dubai depends on its “capacity to facilitate complex swaps between networksoperating on a basis of unqualified trust in European, North American, WestAsian, Iranian, Afghani, South Asian, Chinese, and South East Asian markets.Once relationships of trust are in place, which at this level are organized primarilyin terms of quasi-kinship, differences in ethnicity and nationality are no obstacleto the construction of hawala deals” (34). Thus, the workings of the modern-dayhawala present a fascinating combination of highly personalized trust relationshipsand quasi-kinship reciprocities between individuals, and highly anonymousdigital capital flows routed through the global banking system.The Role of Hawala in Post-conflict Remittance TransfersGrounded in culturally determined patterns of reciprocities, informal remittancetransfer systems like hawala can be economically competitive and adaptive inmodern conditions. That is particularly evident in conflict-affected societies, suchas Afghanistan and Somalia. According to Lindley (2009; 2010), the evolvementof informal remittance networks in war-ravaged Somali communities demonstratesthat conflict can encourage commercially viable adaptations that build onexisting social institutions in the absence of effective state administration. Somalimoney transfer infrastructure that has evolved from local xawilaad 3 institutionshas become a highly sophisticated and expansive network. The activities of thelocal xawilaad operators began expanding during the civil war of the 1980s and1990s with the spread of high frequency radios. The agents joined into largernetworks and gradually formed centralized businesses—including Dahabsiil andAmal that are currently among the largest Somali money transmitters (Lindley2009, 522–524).3 Local term for Arabic hawala.Remittance Flows to Post-Conflict States: Perspectives on Human Security and Development 27
Customary law (xeer) and other traditional institutions still remain central inregulating transactions (526). Clan-based networks and customary authority arewidely drawn upon when recruiting collaborators for money transfer operators.Both traditional and contemporary solidarities are put into use when buildinglocal money transfer networks, restructuring political alliances, and creating newopportunities for local entrepreneurs. Lindley argues that the collapse of stateinstitutions resulting from the prolonged civil conflict has paved the way to “newforms of socio-political authority” that contributed to the viability of the remittancetransfer sector in Somalia. Another factor that has facilitated the rise ofthe most advanced money transfer system on the African continent is Somalia’shighly advanced telecommunications infrastructure. After a complete devastationof the fixed line system in the early 1990s, Somalia “leapfrogged into wireless andother advanced technologies” (Feldman 2007, 571). This was done with the helpof satellite communication devices of the VSAT 4 type that provided the flexibilityand cost-effectiveness needed for functioning in the war-torn environment. Therapid development of the country-wide system with a high degree of interconnectivitybecame possible due to grassroots cooperation among a multitude ofSomali telecommunication operators. With some facilitation from the UnitedNations Development Program (UNDP) and the International TelecommunicationsUnion (ITU), the Somali Telecom Association was formed in 1998 (568). The vitalimportance of remittance transfers for local livelihoods, in turn, became a powerfulincentive for the private sector operators to develop the telecommunicationssector—leading to a somewhat paradoxical situation where “in an unregulatedsociety, such as exists in Somalia, a form of self-government, essentially self-regulation,for an individual sector can arise to provide optimal benefits” (Feldman2007, 568). Because of the efficient and well-coordinated money transfer infrastructure,Somalia was also able to make timely adjustments after the assets of itsmain remittance company, Al-Barakaat, were frozen due to terrorist suspicionsin 2001. Only months later,Lindley argues that the collapse of state institutionsresulting from the prolonged civillocal transfer networks weresuccessfully reconfigured andconflict has paved the way to “new forms ofother money transfer companiescame forward to replacesocio-political authority” that contributed tothe viability of the remittance transfer sectorAl-Barakaat—most of themin Somalia.complying with the regulationsof the international Financial Action Task Force and cooperating in theframework of the Somali Financial Services Association, overseen by the UNDP4 Very small aperture terminal.28 A <strong>Pardee</strong> Center Task Force <strong>Report</strong> | October 2013
Page 1 and 2: Pardee Center TASK FORCE Report oct
Page 3 and 4: This series of papers, Pardee Cente
Page 5 and 6: AcknowledgementsThis Task Force on
Page 7 and 8: ITU International Telecommunication
Page 9 and 10: networks and migrant associations i
Page 11 and 12: to developing countries than other
Page 13 and 14: But most importantly, remittances a
Page 15 and 16: often mix in the countries of desti
Page 17 and 18: According to the World Bank estimat
Page 19 and 20: Because of its focus on the multidi
Page 21 and 22: eceiving remittances provides an en
Page 23 and 24: associations for post-conflict inst
Page 25 and 26: are proposed to avoid the associate
Page 27 and 28: Terry, D. 2005. Remittances as a De
Page 29 and 30: oader approach to post-conflict rem
Page 31 and 32: networks can be seen as “homogeno
Page 33: That personalized nature of hawala
Page 37 and 38: the world (Lindley 2009, 531). Much
Page 40 and 41: ize the informal equal efforts to a
Page 42 and 43: struction and development. Means sh
Page 44 and 45: opportunities should focus on exist
Page 46 and 47: 2. Dodd-Frank Act and Remittances t
Page 48 and 49: leadership. Formal payments systems
Page 50 and 51: and financial institutions. 26 Reso
Page 52 and 53: closures should be both in English
Page 54 and 55: issued a new proposed regulation De
Page 56 and 57: “closed network,” in which all
Page 58 and 59: Some guidance may be found in the p
Page 60 and 61: the use of mobile devices for money
Page 62 and 63: Foreign TaxesUnder the 2012 regulat
Page 64 and 65: will be available in all cases. CFP
Page 66 and 67: Section II: Remittances in Post-Con
Page 68 and 69: Sri Lanka. The conflict also result
Page 70 and 71: Figure 2: Current Account, Trade Ba
Page 72 and 73: flows came from migrant workers in
Page 74 and 75: Informal Remittance Channels in Sri
Page 76 and 77: tory authorities, with some calls f
Page 78 and 79: 4. The Role of Remittances in Post-
Page 80 and 81: Figure 1: Liberia Per Capita Income
Page 82 and 83: associations, women’s groups, alu
Page 84 and 85:
Remittances to LiberiaValue of Remi
Page 86 and 87:
credit because of the need to be li
Page 88 and 89:
Remittance Transfers in Sierra Leon
Page 90 and 91:
Knowledge RemittanceThe Liberian di
Page 92 and 93:
process furthermore was a pioneerin
Page 94 and 95:
Levitt, Peggy and Deepak Lamba-Niev
Page 96 and 97:
Section III: Diaspora Networks andC
Page 98 and 99:
Post-Conflict Development,” this
Page 100 and 101:
One of the main challenges for mobi
Page 102 and 103:
6. Transnational Remittances and De
Page 104 and 105:
The Salvadoran Diaspora is very sig
Page 106 and 107:
annually during the 1990s to less t
Page 108 and 109:
Figure 2: Transnational Vicious Cyc
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The transnational vicious cycle not
Page 112 and 113:
emittance flows is mixed, as initia
Page 114 and 115:
individuals, communities, and famil
Page 116 and 117:
areas. This issue can potentially b
Page 118 and 119:
This is a breakthrough moment: afte
Page 120 and 121:
Edwards, Sebastian and I. Igal Mage
Page 122 and 123:
y La Distribucion Del Ingreso, 1st
Page 124 and 125:
7. Remittances and Community Resili
Page 126 and 127:
For quantitative data collection, a
Page 128 and 129:
Remittances are perceived as playin
Page 130 and 131:
the affected population. Internatio
Page 132 and 133:
ReferencesAddleton, J. 1984. The im
Page 134 and 135:
8. Filling the Gap in Health Staffi
Page 136 and 137:
The alternative is for donors to se
Page 138 and 139:
cians in the U.S. in 2000 (Clemens
Page 141 and 142:
1. Remittances, Financial Inclusion
Page 143 and 144:
networks, and communities. The role
Page 145 and 146:
• In the present era of heightene
Page 147 and 148:
the island of Kosrae, in the Federa
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and Sweden and has held visiting pr
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he organized a number of workshops
Page 153 and 154:
Pardee Center Conference ReportsDev
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