The New York Times has revealed of a US surveillance programme in which millions of international and domestic phone calls and e-mails are being monitored for nearly five years. The US Treasury says that the US government has acted on a firm legal footing.
The US Treasury Secretary, while defending the secret programme, said, "The tools that the Congress has given us to follow the flow of terrorist money lead to the terrorists themselves".
Absolutely correct as there are no two views about it. Both the nation from where the Hawala money flows in and out, should be held equally responsible for this illegal act. But the crux of the matter is that are there any proper investigations into such money flow?
Before we go into further details let's gather some facts. According to one of the official World Bank reports, the number of migrants world-wide has reached almost 200 million. In 2005 the official world-wide remittance exceeded $230 billion, out of which South East Asia accounted for $32 billion. India received the most remittances, with $23.5 billion, which continues to be the largest recipient of remittances for more than five years, followed by China, $21 billion and Mexico $18 billion.
The Hawala topic can be discussed at length and I would like to add furthermore, that though there are no established official records of Hawala or Hundi business transactions available, there was a whisper in the market that during the 10 years of the Afghan war, the USA pumped around $35 billion to support Afghan Mujahideen to fight the Soviets.
Another good example I would like to quote here is that soon after 9/11, USA entered into a conflict with the Taleban and removed them from the scene. It is said that to regain the confidence of the local population, a lot of cash money was poured into Afghanistan to gather support for the Westerners.
Evidence can be had from the fact that in Pakistan there are two parallel exchange rates in the country, one is the official bank rate and the other is the Kerb market rate. Prior to 9/11, there was a 2% gap between the Central bank's official exchange rate and the Kerb rate. At one time, as the money was pouring into Afghanistan's territory, the Kerb market was traded at a discount price meaning that cash dollar in the Kerb market was available at a cheaper rate than the Central bank's rate.
This was because, at that time in Afghanistan, no bank branches were operating, as the Central bank of Afghanistan had collapsed. Even today, the Pakistani rupee is the most popular currency in Afghanistan, as Pakistan is the trading hub for the Afghans and they have close business links with the NWFP region.
Coming back to the point of Hawala business. How serious is the USA or the Western world in getting rid of this business? Experience tells us that the Hawala business can be minimised to a certain extent if stringent measures are taken, but the world can never get rid of it as long as the conflict between the countries, nations, religions, interests in wealth etc, exists. Thus the Hawala business will never fade away.
The USA would always like to dominate as the only global Superpower, the Western nations will continue with their present policy with double standards of running with the hare and hunting with the hounds. On the one hand they are buying support (with the dollars) of the warlords and also want democracy to take root through empowerment of people. To continue such policies, a lot of money is required, as was done by the Americans in the Soviet era. Therefore, there can never be an end to the unofficial channels and the Hawala and Hundi business will continue to flourish.
Without cash dollars the USA may find it difficult to fight its war against terrorism in Afghanistan, Iraq or end uncertainties created in countries like Iran, Syria, Cuba, Venezuela, Nicaragua, North Korea. Panama during General Noreiga's regime is another good example, as at that time, the Americans did not allow the remittance of cash dollars into Panama, which was then the country's official currency. An analyst was of the view that by holding government salaries it created unrest in Panama or is there any other reason to justify this strategy.
Why can't the USA make an effort to halt the Italian mafia dealing in arms and the drug business or ask Russia to curb domestic terrorism or help Spain to eliminate (Basque ETA), which is fighting for independence or ask Israel to halt its barbarism against helpless Palestinians? Only last week one of the most wanted arms dealer, Adnan Kashoghi, was found dead in his yacht in the European waters. Why couldn't the vigilant US or European satellites trace the arms dealers' boats or apprehend Kashoghi, who was in hiding since more than a decade, as he was openly supporting global terrorism by supplying arms?
In the sub-continent the flow of every cent is watched carefully though, without much success. To provide some more interesting statistics, the Indians working in GCC countries are estimated to be 3.6 million. They remit approximately six billion dollars from the Middle East alone. The total number of Pakistanis working abroad (globally) is 3.4 million. They send $4.2 billion through the banking system.
While the total number of Bangladeshis working overseas is thought to be over 3.5 million and their official home remittance reported by its Central bank is approximately $3.5 billion. Philippines' annual remittance figure is roughly around $10 billion. The surge in official remittance figure in the sub-continent was certainly seen after the 9/11 incident, confirming that the majority of money remitted to Pakistan is genuine, as now a lesser number of expatriates is willing to take the risk.
If proper assessment of remittance detail is undertaken, the Hawala situation in Pakistan is not as bad as projected by the West. If the region's total remittance is divided by the number of Pakistanis abroad, the remittance per family is approximately in line with other countries. Therefore, Pakistan's remittance figure should not be a worrying factor. Bad money and thugs are found all over the world, which represents a minority.
Pakistan's negative image in the eyes of the Western world is due to its regional proximity with Afghanistan which has a cultural binding with the Frontier province. Otherwise the negativity, more or less, is the same as any other Muslim country.
About 5 years ago, an official of Pakistan's Central bank was able to convince a visiting IMF team that since expatriates in the Gulf region are mostly from the Northern area of Pakistan or hail from remote areas of other provinces, where there are no bank branches, it is convenient for the low-paid labour to send quick money to their families through Hundi.
Pakistan's Central bank, under the leadership of Dr Ishrat Hussain, had done a good job of finding new ways to increase remittances, which shot up from 1.2 billion to $4 billion. Similarly, the present Governor of the State Bank of Pakistan has to find out new ways to push annual remittance figures over $5 billion mark, since the remittances have stagnated at $4 billion mark for the last three years, whereas during this period more Pakistani workers are reported to have gone abroad. Emphasis should be given to small transfers made by poor immigrants, as fees charged by service providers at times are too exorbitant. Attractive remittance schemes by Pakistani banks may also help in raising the remittance figures.
Furthermore, globally, a lot can be done if the central banks act seriously to help in cutting down the Hawala and Hundi business. But the beginning has to start from home. First to put a hold and stop the Hawala and Hundi business originating from USA or Europe by asking its own Central bank to be more responsible, as the Fed and European Central Banks are better equipped due to modern techniques and with their expertise on risk management. Hence they should take the lead and guide other central banks. Free movement of funds should be allowed conditionally along with the details of transaction by disclosing the name of the sender and the receiver to the Central bank or banks or to any other concerned authority.
If at all there is any kind of dirty money, coming to the sub-continent from the West, their banks need to get their house in order first before peeping into other houses. Charity begins at home. The West needs to clean its dirty laundry first before asking South Asia to wash its linen.
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