More than $215 million a year is sent to Somalia by relatives in the United States, with much of that originating in Minnesota.
The process, which involves sending cash through money-transfer operators, is known as remittance and has become the subject of controversy amid concerns that the money could be used to fund terrorist activities.
On Friday, several nongovernment organizations will be holding a briefing in Minneapolis to talk about a recently released report on the importance of opening up the markets for remittance, including recommending improvements on how the money is monitored.
The money sent from the United States is comparable to the amount the U.S. government sends in foreign aid to Somalia each year. Minnesota is home to the largest U.S. Somali community and the starting point for much of that flow. Those with family in Somalia have said their relatives would have trouble surviving without the money send to them.
U.S. Bank earlier this year agreed to open an account with one money-transfer operation that will allow Minnesotans to send money to Somalia. But it has yet to conduct a transaction, and other banks have grown hesitant to participate. Fearful of liability and uncertain that the money goes to where it is claimed, they’ve closed their accounts with the Somali-American-owned money-transfer operations. The British banking giant Barclays recently announced it was closing its accounts with Somali-connected remittance companies, citing inadequate controls for monitoring the money.
The report, “Keeping the Lifeline Open,” argues that the flow of cash, despite isolated problems, is vital to the stability of Somalia and that even a partial shutdown of the money-transfer operators threatens the country’s future.
“Sending money to Somalia presents risks to banks, but these risks are neither unique nor insurmountable,” the report concludes. The report will be discussed at Safari Restaurant, 3010 4th Av. S. in Minneapolis, from 6 to 8 p.m. Friday.
By Mark Brunswick
Source: StarTribune
