| If you read this WaPo piece in isolation you'd think that it was Kenya that shot up a Somalia university... |
As of February, many banks in the United States have largely stopped servicing the accounts used by money transfer operators to help Somalis in the country send money to their families and networks back in Somalia, often for basic needs such as food, medicine and school fees. The country, which has been ravaged by civil war, famine and lacks a central banking system, heavily relies on these remittances. Some organizations estimate that remittances represent 25 percent to 45 percent of the country’s gross domestic product. Somalia, which barely has a functioning government, is also plagued by the Islamist terrorist group Al-Shabab. Consequently, the threat of heavy fines for failure to comply with U.S. anti-terrorism regulations has many banks choosing to flee the market altogether.
Unfortunately, more banks in other countries are doing the same. Westpac, the last bank in Australia to handle remittances to Somalia announced at the end of March that it was shutting down servicing these accounts. The United Kingdom has also restricted these transfers. Global remittances to Somalia are estimated at $1.3 billion, dwarfing the combined amount of global humanitarian aid and foreign direct investment to Somalia.