By Fiona Twycross | Published: October 13, 2013
Last week I met two members of London’s Somalian community to talk about Barclay’s decision to pull out of Britain’s £2 billion remittance market. This will have a huge impact on Somalia and other countries whose economies are, rightly or wrongly, reliant on international money transfers.
We spoke about individual families sending money they have earned in the UK home to help feed relatives, and assist with building a civil society in this war-torn country. Together, these individual acts of people sending money back to their family are key in preventing people from dying of hunger with the remittances contributing a massive 50 per cent to Somalia’s GDP.
Later that day I heard Boris Johnson talk at the Conservative Party Conference about how he is proud to be Mayor of French, Australian and Chinese Londoners. As Mayor of London he has a responsibility to speak up for all Londoners and he is singularly failing to step in to help.
There are a number of reasons why the Mayor should step in and help resolve the imminent crisis Barclay’s decision will trigger.
The first is a humanitarian one. The people I spoke to were quite clear – this would cut off vital funds to their friends and relatives and lead to starvation as people are pushed further into poverty.
The second reason Boris Johnson should intervene is in relation to our economy here in London. If you walk along a high street you are likely to see businesses who rely on the commission from remittances to pay the rent and which also provide other services such as internet cafes. They will no doubt suffer if there is not a safe way to transfer funds, and this market will be pushed underground with cash in suitcases replacing traceable movement of money
From an international perspective, it makes good sense to ensure we have as stable a Somalia as possible. The American intervention against terrorist targets in Somalia this weekend shows how fragile the situation there is. The gap left by remittances will create instability and ultimately will need in the short-term at least to be filled by foreign aid.
However, this transition is likely to be chaotic and trying to suddenly plug the £160 million sent a year sent by the 300,000 Somalians living in the UK will put many vulnerable families at risk. It also provides a space for the terrorist group Al Shabab to move in. The UK government hosted a conference in London in May to help rebuild the country highlighting that it recognises this is an important issue. The cutting off of remittances will clearly hinder efforts to stabilise Somalia.
Despite Mo Farah’s voice being added to the debate on this issue, it is the financial transaction and the risk to Barclays of the current system rather than the impending human tragedy that has been centre stage.
Barclays has a huge presence in London because of its sponsorship of the cycle-hire scheme. At the very least, the Mayor should use his influence to ask the bank to delay implementing their decision until alternative arrangements for arranging money transfers can be found.
The risk is that removing a cash lifeline from an impoverished people could lead to a humanitarian crisis which could in turn lead to a strengthening of terrorist organisations.
The Somalis I spoke to were more than willing for additional safeguards to be put in place and supported the idea of a ‘safer payment corridor’. They were, however, deeply concerned at the human tragedy likely to unfold.
It’s time we started listening to them.
Source: left foot forward