The hawala question

Sanjay Kapoor | Updated on January 17, 2018 Published on July 07, 2016


How India and Qatar are trying to nail it

For a country so tiny, Qatar punches far above its weight. A few years ago, an influential Saudi prince had called it a country of “300 people and a TV station” due to the inordinate influence Al Jazeera enjoyed in the region.

Perhaps in recognition of its importance, Prime Minister Modi recently made a short trip to its capital, Doha, where, amongst other agreements, he also signed an important memorandum of understanding between the two countries to share intelligence on the movement of cash through hawala. Expectedly, the need for the two countries to share this information was couched in the desire to fight the scourge of global terror. The question is: Is this the only reason?

Our people there

Qatar, sitting on huge gas reserves, has roughly 5.45 lakh Indians, far more than its local people, who send $4.2 billion (2015) every year. Still about 30-40 per cent of the total funds move through the informal hawala channels to India. How much really goes to funding terror networks? The India-Qatar agreement tries to target both the issues, but for different reasons.

In recent times, India is extremely worried due to the precipitous fall in remittances from the Gulf region. April 2016 saw a dramatic fall of 87 per cent in remittances due to the collapse of oil prices. The non-resident deposit fell to $302 million from what it was a year ago at $2,406 million.

The NRI rupee account fall was equally dismal. All these years, India got about $71 billion through remittances with the bulk coming from West Asia. Reports emanating from these countries suggest more downsizing of businesses and more pain. .

India wants to share intelligence with Qatar on hawala funds to pressure the ordinary Indian workers to send their money through official banking channels only. There is a reason. It is cognisant of the dramatic rise in hawala remittances after the 2001 World Trade Centre attack by Al-Qaeda. This could be used to meet its development objectives.

The India-Qatar agreement aims to control terror funding, but the tiny peninsula has not adequately explained how it defines terror. Over the years it has spent billions of dollars to fund Islamic militants to bring down Libya’s Muammar Gaddafi and later to haemorrhage Syria’s government.

It is not really clear what kind of intelligence Qatar will share with India on terror funding. Would that intelligence be against Pakistan-based terrorists or against the Islamic State, whom it has been accused of supporting from time to time?

Not all are for terror

The link between terror and hawala funding is tenuous. Funds are needed in building terror networks and initiating murderous attacks on their targets like we see in the case of Islamic State. But there is more to hawala than teaches the eye.

In 1991, the lid on Jain Hawala scandal was blown off during the investigation into terror funding, but what emerged was sinister and deep. Multinational corporations were using the informal hawala payment channels to pay-off bribes to politicians and bureaucrats.

Besides, hawala is not just about terror, but it is also about hard working workers employed in difficult areas sending their earnings to their loved ones back homes speedily and efficiently. This cannot always be grudged even when the state seems to have other plans.

The writer is the editor of Hardnews

Published on July 07, 2016
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