The Hawala System - Essay Example

Hawala is an ancient system that operates as a modern remittance system. It originated in South Asia. The word is of Arabic origin and means change or transform. Although they often conduct legitimate financial transactions they have some differences from that of other remittance services. The transfer of money is based on connections and communicative links between family members, relatives, and other affiliated networking such as business partners or persons having some ethnic and cultural ties. Hawalas have also been described as an informal value transfer system (IVTS) and also as an alternate remittance system (ARS). The hawala system is a very informal one and is based mostly on trust. The funds are transmitted to the particular destination without the movement of physical cash. It is the value of the money that is moved and transferred by the hawaladar. This is done through the social networking that makes hawala a unique as well as a reliable method. Done without the type of paperwork that accompanies other types of monetary transactions hawala remains a popular method of transmitting funds to many Asian countries. Sometimes goods are interchanged between hawaladars in different countries. These may take the form of food, fuel, electronics, gold among other products. Hawala has a market demand that is growing ( Dougherty). It is very successful among its users and thrives in locations that have large numbers of immigrants from countries such as Pakistan, India, and Afghanistan. There are several factors that contribute to the success of hawalas. Most of the persons who use the service of the hawala are immigrants, sometimes undocumented, who find the banking system in their residing country cumbersome and complicated. The hawala offers and easy and simple method without the hassle of paper work. It is also very cost effective and transactions are done very quickly. The client normally only pays a very small percentage of the value of the money sent. This is much cheaper than remitting money through the standard financial institutions. The recipients have a more secure way of obtaining the funds from the contact person in his country. This facilitates well, persons who may be living in remote areas who would have to travel long distances in carrying out transactions at a bank and other places. Another factor that contributes to the success of the hawala is that the money becomes undetected and untraceable. It lacks transparency so persons having ulterior motives can easily manipulate the system. Since September 11, the United States government has made attempts at disconnecting the hawala network. It was suspected that terrorist and money launderers were using the system to fund terrorism. Nevertheless, this system still remains popular. Its success and popularity is also due to some benefits enjoyed by the clients. In carrying out their transactions they avoid paying taxes like customs duties and consumption tax. The clients can always gain access to the system as they operate twenty fours per day and every day of the year. It will be difficult to totally eradicate hawalas as there is little or no proof because of the minimal paperwork that is required. Martyrdom can be defined as death bestowed upon someone as a consequence of their beliefs, faith or cause. It means witness. Martyrdom was very common in early Christian life as many believers gave their lives in the face of persecution thus sacrificing their life with the aim of living a better life in the hereafter. Christianity itself was born out of Jesus’ martyrdom. Martyrdom is common to many other religions as well. In Islam, martyrdom can be described as more active and forward in their thinking. A martyr in Islam advances his cause by preparing to die for their faith. They also believe that if they die fighting for their cause they will go immediately to paradise. The fighter gives his life in the name of Allah. Other forms of suicides such as taking one’s life to relieve personal stress are not condoned in Islam. Suicide bombing can be used as a military and political strategy and is not limited to Islamic religious groups. For example, not all the Tamil Tigers in Sri Lanka belong to the Islamic faith. There are other political groups in other countries as well that used suicide bombing as a tactic. They may not necessarily view martyrdom in a religious sense. In recent history martyrdom and suicide bombers started to become a simultaneous act when the Palestinians began to fight against the Israelis. This was sometimes referred to as the holy war. It eventually spread to other countries such as Afghanistan and Pakistan. Camps were organized where young men were recruited to become suicide bombers. In recent times women has also joined the cause and have been given a hero’s welcome much like their male counterparts. Unlike the suicide bombers who use their actions with the intention to coerce governments into making political changes those who are staunch Muslims fight for the ultimate goal of achieving martyrdom. It has become increasingly difficult for critics especially in the western world to determine and understand the reasons why someone would become a suicide bomber. Their actions defy psychological reasoning. Many suicide bombers do not fit the profile of coming from socio-economic disadvantaged situations or communities. Neither did they show and previous signs of violence or any behaviors that would signal a reason for their choice. The only thing many experts seem to agree on is that suicide bombers are normal individuals (Hafez). Martyrdom goes hand in hand with being a suicide bomber in terms of what they are fighting for. As the location of suicide bombing spreads globally the target also shifts from Israelis as in the case of the Palestinians to anything that is not Islam and that which mirrors the Western world. Al Qaida had the United States of America as their original target but especially since the war with Iraq other western nations that are close allies such as Britain has felt the wrath of the group. They are seen as the infidels and as long as they try to eliminate them in the name of Allah martyrdom is as certain as death itself. One of the fundamental beliefs of Islam is to have the religion as a major doctrine in all countries. There are many Muslims who believe that martyrdom and suicide bombings will lead to an achievement of this goal. HAWALA: HOW TERRORISTS MOVE FUNDS GLOBALLY Jonathan M Dougherty. Corporate Finance Review. New York: May/Jun 2006. Vol. 10, Issue. 6. Hafez, M. (2007). Suicide bombers in Iraq. New York: United States Institute of Peace.   Read More