I tried to go the legal route first.
I just needed to send $3000 to Afghanistan, a contribution to the news agency that Tom and I started. They have a bank account, I have a bank account, neither bank account is in the US, both deal with multiple currencies.
However, when I tried to use the online wire transfer, my bank in Dubai sent me a message which I did not get for many days, saying that they needed the info for the intermediary bank. By the time I got and sent this info, my bank had already started the process to credit the money back to my account. The upshot: I paid $18 in bank fees plus $28 in loss via exchange rate differences, two weeks had passed, and the money still wasn’t in Afghanistan.
My bank said try again. I said Hawala.
Centuries ago, before there were banks, before “america” was “discovered” and before “Europe” was doing much of anything serious, there was trade in the Middle East and Asia. And those traders had to have a way of getting money from one place to another. That was the hawala.
You went to the hawala in Medina and you gave him 100 currency-units and a fee, and you said to send 100 currency-units to your family in Fez, and they got the 100-currency units through a sophisticated system of communications and trust that did not rely on phones, the Internet, or any such nonsense.
The hawala system gives a different meaning to the term “personal banker.” It grew up on family ties, that became trading ties, that became somebody who knows somebody and whose reputation will be ruined if they violate this trust.
Unfortunately, the US government learned about hawalas after 9/11, because some of the money used to set up the attack went via hawala. Well, duh.
But because of this bad use of a good system, the US went crazy on hawalas and for awhile tried to get them all shut down. One of many examples of sheer arrogant ignorance. Hawalas are used by poor workers everywhere in the region to send money home to their family in the villages, because it’s cheaper and frankly more reliable and comprehensible than banks.
So tonight I walked to the water-taxi dock on the south shore of Continue reading