While the political ramifications of Hawala are hugely important and interesting in the post-9/11 world, what I find more pertinent are the mechanics and how technology is changing the way it works.
The East African newspaper put out a good visualization today on the way that Hawala currently operates in the form of remittances from Western nations to the Middle East and finally to Somalia. The United Arab Emirates (UAE) serves as a central clearing house for both simple cash transfers and more complicated import/export relationshipsAs can be seen, the person in the US or Europe gives money to a branch agent in their country. This is sent to a central country clearing house, then onto a UAE clearing house, then to a Somali agent and finally to the individual who collects the funds in Somalia.
It used to be that Somali local private operators could only communicate by HF radio (yes, they did it before this via trust networks, family ties and paper), but when the mobile phone revolution hit Africa in the 90′s the communications were made more efficient. At first this was through satellite phones, and now by the robust local mobile phone network.
Headed towards Collapse
4 months ago