"Disaster" beckons as US cuts lifeline

Somali communities both in Somalia and throughout the diaspora have reacted angrily to the decision by the US government on Wednesday to close down and seize the assets of a leading Somali-owned money transfer company, accusing the US of acting with anti-Islamic bias and putting at risk the welfare of tens of thousands of Somalis. On Wednesday, US authorities ordered the immediate closure of the Al-Barakat money transfer company and the seizure of its assets worldwide, accusing it of transferring funds on behalf of the chief terror suspect, Osama bin Laden, and his Al-Qaeda (Al-Qa'idah) network. In doing so, the US government claimed on Wednesday that Al-Barakat had been formed for the specific purpose of aiding terrorists. "By shutting these networks down, we disrupt the murderers' work," said US President George Bush. However, Al-Barakat's founder and chairman, Ahmad Ali Jimale, told IRIN from his office in Dubai that he had absolutely no links with Bin Laden or Al-Qaeda, insisting that his business was clean, and had been established for the benefit of the Somali people, not of Bin Laden. "These accusations are nothing but lies," said Jimale. "If the US authorities undertake a thorough investigation... they will find that we have nothing to do with any illegal activities." Jimale said he formed Al-Barakat, which now operates in 40 countries worldwide, following the outbreak of civil war in Somalia in 1991 and the collapse of the country's banking system, as a means of helping Somalis who had fled the country as refugees to transfer much-needed funds to relatives back home. To date, the hawalad transfer system, as the informal banking network is known, remains the only way of transferring funds to Somalia. Yasin Khalif, a manager of Amal, another Somali-run hawalad company so far unaffected by the closures, told IRIN such transfers were the only means of income for between 70 and 80 percent of the Somali population. It is estimated that in an average year, a staggering US $200 million to $500 million is transferred to Somalia through the hawalad system. By contrast, just $60 million was injected into the Somali economy last year through international humanitarian aid. "Shutting down the hawalad is tantamount to condemning hundreds of thousand of Somalis to a slow death," said Khalif, adding that since a ban on Somali livestock exports was imposed by the Gulf states last year because of an outbreak of Rift Valley Fever, "hawalad is the only significant economy in the whole of Somalia". Michel Del Buono, an economist and Somalia specialist, believes that Al-Barakat has established itself as one of the cornerstones of the Somali economy during its decade in business. He said he believed that its closure would spell dire humanitarian consequences for a country already in the grip of severe food shortages. "If we talk about the collateral damage of this decision, this is equivalent to killing civilians," he said. "It could spell disaster for Somalia." Although there were three or four other hawalad companies still operating in Somalia, none of them had the reach of Barakat, said Del Buono, speculating that "if they [the US] stop Barakat, it's only a matter of time before they move on the others". According to US media reports, The US authorities on Wednesday refused to disclose evidence which they say implicates Al-Barakat in terrorism, claiming that such evidence is classified, but said they believed that Jimale was an associate of Bin Laden's and allege that Barakat's network had moved tens of millions of dollars a year into Al-Qaeda. In total, 62 individuals and organisations with ties to Barakat and a Swiss-based money transfer company, which the Americans also suspect of complicity in financing terrorism, have had their assets, totalling $43 million, seized. Yusuf Garad, the head of the BBC Somali service, which along with other international organisations like the United Nations use the hawalad system to pay their staff in Somalia, said Wednesday's decision represented a "big setback for the Somali community". He said even if Al-Barakat had been "misused by terrorists", it seemed unfair to close down its entire operation on which so many people depended. "If a terrorist uses a certain phone company to arrange a terrorist attack would it be just to then close down that company?" But whatever the impact on Somali communities overseas it is back in Somalia itself that the impact of yesterday's action by US authorities would be felt with full force. Ubaho Farah, a 63 year-old grandmother and Mogadishu resident, told IRIN she and 12 members of her extended family were living on the $150 a month one of her sons remitted to Somalia each month. "We survive on this money, and if it stops we have no other means of survival. We would be forced to either beg or steal," she said.