close
Society

Terrorism, Piracy, Poverty And Barclays: The Fading Hope For Somalia

In late 2012 British multinational bank HSBC was fined US $1.9 billion for unwittingly facilitating money laundering by terrorist organisations and Mexican narcotic traffickers. Similarly, intelligence from Guanta­namo Bay, brought to light through WikiLeaks, has suggested money transferred through Dahabshiil – the largest money transfer company operating in Somalia – helped fund al-Qaeda’s 2002 terrorist attacks in Mombasa, Kenya.

Now, Barclays – another multinational banking organisation – has decided to suspend the accounts of money transfer companies operating in developing countries, including Somalia, to prevent any potential fines. In a country that has been ripped apart by war lords, piracy, ter­rorism and political factions, around 40 per cent of the population relies upon money sent from family living abroad. The estimated US $1.3 billion sent home to Somalia is vital for the poverty-stricken population, totalling more than international aid which the country receives.

The collapse of government in 1991 has seen Somalia operate without an official banking system for decades, making money transfers crucial. Barclays has decided that rather than unknowingly aiding the actions of militant groups such as Al-Shabaab, they should pull out of Somalia altogether. This is a bitter blow to a country struggling for an economic foothold, crushing the hope that was raised when the Interna­tional Monetary Fund decided in June to begin relations with Somalia after more than two decades of refusal.

Barclays’ decision is brutally logical. Rather than impose costly anti-laundering infrastructure changes, they have decided to cut off this small sector of their dealings and avoid potential fines. In a profit driven world, Barclays’ management has looked after the interest of sharehold­ers, meanwhile neglecting the needs of the impoverished Somalis.

British Olympic hero Mo Farah, who frequently sends money home to his native Somalia, admits “Barclays has a bank to run”, but high­lighted the human aspect, saying “this decision could mean life or death to millions of Somalis.” In a world where there is increasing pressure for multi-national corporations to be good ‘global citizens’ Barclays has left Somali money transfer companies isolated as they scramble to find a new global bank to facilitate their actions. Barclays’ actions are morally indefensible, providing no alternative to the companies that rely upon their services.

Barclays has a real chance to regain the trust of the public follow­ing the global financial crisis and the $290 million penalty they were hit with in 2012 for rigging interest rates. An international standard must be created to regulate dealings with money transfer companies so banks can continue to service the needs of millions of people in the develop­ing world. Without a legitimate banking source, money transfers may go underground, making it more difficult to monitor any money used to fund terrorism.

This over-reaction to HSBC’s fine highlights the harsh reality of corporate decision making. There have been calls for Barclays to extend their business in Somalia for another six to twelve months to give com­panies like Dahabshiil time to find another global bank to work with, but these calls have not so far only succeeded to push the deadline back from July 10 to September 30.

Farah headlines a 25,000 strong petition to change Barclays’ deci­sion that has been delivered to the UK government. The British govern­ment has so far been unsympathetic, despite David Cameron pushing for development in Somalia and advocating for the legitimacy of the new government. The British Foreign Office has said the situation is a com­mercial decision alone and has avoided taking a role in the matter.

The cell network structure of terrorist groups makes their funding difficult to track, especially in underdeveloped countries such as Somalia. More must be done by banks and anti-terrorist agencies to ensure money transfer companies can serve as a lifeline for impoverished people and not as a means to fund terrorist groups. Barclays holds a 75 per cent mar­ket share of the money-transfer sector and should monitor the dealings of their constituents more closely, taking a leading role in preventing money laundering.

Terrorism remains a threat to the livelihood of Somalis, but cutting off money for food and water may be an even greater menace to the mil­lions struggling with poverty.

About Christopher Pase

NBC’s Community led me to believe that at uni hacky-sack is a serious sport, avoid the occasional chauvinistic mature-aged student and those with patterns in their facial hair are probably drug dealers. After two years of my Arts (Global)/Science degree it appears Frisbee is accepted above hacky-sack, the Chevy Chase lookalike in my maths lectures is actually a nice guy and drug dealers are getting smarter by blending their sideburns in with the rest of us. That being said, my efforts at AXP were crudely compared to Chang’s marathon pop-and-locking and, as this bio demonstrates, my pop-culture references aren’t exactly streets ahead.

Christopher Pase

The author Christopher Pase

NBC’s Community led me to believe that at uni hacky-sack is a serious sport, avoid the occasional chauvinistic mature-aged student and those with patterns in their facial hair are probably drug dealers. After two years of my Arts (Global)/Science degree it appears Frisbee is accepted above hacky-sack, the Chevy Chase lookalike in my maths lectures is actually a nice guy and drug dealers are getting smarter by blending their sideburns in with the rest of us. That being said, my efforts at AXP were crudely compared to Chang’s marathon pop-and-locking and, as this bio demonstrates, my pop-culture references aren’t exactly streets ahead.

Leave a Response