Somalia is a failed state with no banks, only a cash-based, informal transfer network called hawala. A hawala operator takes in money on one end, then instructs a relative, friend or another agent in another country to hand a like amount to someone else. The paperless system, based on trust and oral agreements, is commonly used in the Middle East, parts of Asia and Africa.It's currently a small system dealing with relatively small sums in international crime network terms, but from tiny acorns...
There is some concern that the system is used for overseas payments to and from the pirates — especially now that they are getting their ransoms in cash, sometimes dropped in burlap sacks from a buzzing helicopter.
The pirates acknowledge using foreign help.
"All I can tell you is we have people in Nairobi, Djibouti, we have people in Dubai and many other countries," said Gamase Hassan Said, a pirate in Eyl speaking by telephone.
Wednesday, December 10, 2008
Two AP reporters conclude "Somali piracy backed by international network":