Cash and Compassion

The report analyzes how the Somali diaspora, estimated at 1-1.5 million people, supports its country of origin through private remittances, collective fundraising, and private investment. It highlights the critical role of the 'hawala' money transfer system and the significant impact of diaspora-funded social services in education and health. The document argues that while the diaspora is a vital lifeline, its effectiveness is hindered by security concerns, counter-terrorism regulations in host countries, and a lack of coordination. It recommends that the UN act as a facilitator by providing matching funds, improving the regulatory environment for transfers, and expanding professional return programs like QUESTS/MIDA.

• The Somali diaspora provides significant annual financial support for community relief and development, estimated between US$130-200 million, while private remittances are much larger, ranging from US$1.3 to 2 billion per year.
• The 'hawala' (money transfer company) system is the primary, most trusted, and most efficient means of transferring funds, often reaching remote areas within minutes.
• Counter-terrorism laws and security suspicions in Western settlement countries have a 'chilling effect' on fundraising and make it difficult for money transfer companies to find partner banks.
• Diaspora support for social services is heavily concentrated in education and healthcare, with approximately 20% of private primary schools in Somaliland started by the diaspora.
• Private sector investment in Somalia is overwhelmingly funded by the diaspora, with estimates suggesting up to 80% of business investment financing comes from this source.
• The diaspora plays a critical role in governance and politics, particularly in Somaliland where half of the new cabinet members are returnees from the diaspora.
• Diaspora-funded projects often exhibit higher levels of accountability and lower corruption than international aid projects due to strong transnational kinship networks and frequent return visits.
• A lack of sustainability is a primary cause of failure for diaspora community projects, as funds are often raised for initial construction but not for recurring operational costs like salaries.
• The QUESTS/MIDA program has successfully placed qualified Somali professionals in civil administrations, but faces challenges regarding local counterpart preparation and bureaucratic inefficiency.
• There is a pervasive distrust of international aid agencies and the UN among both the diaspora and local Somalis, often rooted in perceptions of corruption and inefficiency.

APA

Hammond, L., Awad, M., Dagane, A. I., Hansen, P., Horst, C., Menkhaus, K., & Obare, L. (2011). Cash and Compassion. Peace Research Institute Oslo. https://cdn.cloud.prio.org/files/0858fa56-c404-44a2-b3e3-45a40e89d14d/Cash and Compassion The Role of the Somali Diaspora in Relief Development and Peacebuilding.pdf?inline=true

Chicago

Hammond, Laura, Mustafa Awad, Ali Ibrahim Dagane, Peter Hansen, Cindy Horst, Ken Menkhaus, and Lynette Obare. Cash and Compassion. Peace Research Institute Oslo, 2011. https://cdn.cloud.prio.org/files/0858fa56-c404-44a2-b3e3-45a40e89d14d/Cash and Compassion The Role of the Somali Diaspora in Relief Development and Peacebuilding.pdf?inline=true.

Wikipedia

{{cite report |last1=Hammond |first1=Laura |last2=Awad |first2=Mustafa |last3=Dagane |first3=Ali Ibrahim |last4=Hansen |first4=Peter |last5=Horst |first5=Cindy |last6=Menkhaus |first6=Ken |last7=Obare |first7=Lynette |title=Cash and Compassion |publisher=Peace Research Institute Oslo |date=2011 |url=https://cdn.cloud.prio.org/files/0858fa56-c404-44a2-b3e3-45a40e89d14d/Cash and Compassion The Role of the Somali Diaspora in Relief Development and Peacebuilding.pdf?inline=true |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hammond2011cash, author = {Hammond, Laura and Awad, Mustafa and Dagane, Ali Ibrahim and Hansen, Peter and Horst, Cindy and Menkhaus, Ken and Obare, Lynette}, title = {{Cash and Compassion}}, institution = {Peace Research Institute Oslo}, year = {2011}, url = {https://cdn.cloud.prio.org/files/0858fa56-c404-44a2-b3e3-45a40e89d14d/Cash and Compassion The Role of the Somali Diaspora in Relief Development and Peacebuilding.pdf?inline=true}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }