Are Filipina Nannies Funding Al-Qaeda?

Kerry Howley | September 5, 2007

Via the Washington Times comes a bizarre AP analysis of the dramatic increase in global remittances. The World Bank reports that immigrants in 2006 were sending home double what they were in 2000, totaling $276 billion, and more than half of it to developing countries. Disturbing trend?

Counterterrorism officials say al Qaeda and other groups are financed in part through informal money-transfer networks called hawalas. Governments and the International Monetary Fund have been working to regulate those.

There are other downsides: fears of brain drains and a vast permanent army of economic exiles, and the untaxed earnings flowing out of host nations.

Hard to know where to start here. The use of Hawala networks for terrorist funding is not a “downside” of the remittances sent by working immigrants; it is a distinct phenomenon that happens to also involve informal means of money transfer. The actual members of that “vast permanent army of economic exiles” are not necessarily permanent, bear no relation to the military, and are only exiles in the sense of self-imposed absence. Much of the remittance cash is coming from places like Singapore and Saudi Arabia, where the immigrant population is subject to constant, state-controlled, churning. 

The U.S. lost $41.1 billion in 2005, according to the World Bank, while Switzerland watched $13.2 billion trickle out of the country that year.

The U.S. “lost” $41.1 billion? If I buy a toothbrush in China with money I made in D.C., does the treasury lose that money? We’d better stop Americans from investing abroad—think of all the money the U.S. is losing. (It's not completely clear to me whether the AP is referring to foregone tax revenue, or to forgone spending in the domestic economy, or something else. In either case, "loss" is an odd way to put it.)

But Giuseppina Iampietro, a Swiss Economics Ministry spokeswoman, says little can be done: "Immigrants have no obligation to invest their money in Switzerland."

And neither do the Swiss.

Comments

|9.5.07 @ 4:23PM|#

The dollar isn't worth what it used to be. Maybe the immigrants have to send what seems like double here, but is in actually not much more on the other end.

sv|9.5.07 @ 4:31PM|#

a version of this AP story appeared elsewhere about a month back.

the quoted 'fears' about hawalas are asinine for the obvious reasons you stated. so is the issue of 'lost' money from the host countries - they're getting the inexpensive labor their market is obviously demanding, plus whatever income the migrants don't send home, which is more than what they would get - $0 - if the migrant had stayed home. brain drain fears in the home countries are understandable, but that's just more incentive to build an environment at home that is attractive enough to enterprising natives to compete with the opportunities abroad.

Russ 2000|9.5.07 @ 4:41PM|#

The World Bank reports that immigrants in 2006 were sending home double what they were in 2000

The minimum payments on credit card bills doubled, too. But that ain't gonna sell papers.

|9.5.07 @ 4:49PM|#

Hey, Washington Times. The sixteenth century called. They want their mercantilism correspondent back.

shecky|9.5.07 @ 5:30PM|#

"Immigrants have no obligation to invest their money in Switzerland.

Do Swiss citizens?

There was a recent news story about how many Swiss are broken up over the notion of the Swiss Army putting out to bid a contract for a new Swiss Army knife. And the possibility, even if slight, that the contract would go to a Chinese factory.

wsdave|9.5.07 @ 7:20PM|#

I'll bet Darfur doesn't have ANY problems with people going there, working, and sending money back home.

Thus, we should be more like Darfur.

|9.6.07 @ 10:28AM|#

I think we can chalk up most of the Swiss shortfall to Roger Federer's move to Dubai.