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Somalia Suffering from Closure of Remittance Company - 2001-11-27

The United Nations Tuesday launched an appeal for emergency aid for Somalia. U.N. officials say the United States' decision to shut down Somalia's largest remittance company as part of the global fight against terrorism has left many families destitute.

Launching their appeal, U.N. officials described Somalia as a "forgotten emergency." Already one of the world's poorest and most devastated countries, the U.N. says Somalia is once again in crisis because of drought. A failed harvest means some 750,000 people are short of food.

Somalia's fragile economy is also in danger of collapse because of the United States' move since the September 11 terrorist attacks to freeze the assets of Somalia's largest remittance company, al Barakaat. The U.S. government says Barakaat was taking money from the remittances to fund Osama bin Laden, the prime suspect in the attacks.

Since the U.S. shut down Barakaat's operations, remittances from Somalis sending money home to relatives have fallen by half, according to the U.N.

The U.N. says remittances are the most important source of income for Somalia, far outweighing the money brought into the country by aid agencies. The U.N. estimates $500 million of remittances are sent to Somalia each year - six times more than Tuesday's aid appeal for $83 million.

However, Gianfranco Rotigliano of the United Nations Children's Fund, UNICEF, says he believes the Somalis will find new ways to channel money into the country. "Of course, if you stop remittances then you have a real huge problem in Somalia because it is one very, very important voice in the budget of families. But I think that will not stop. What we are thinking of is to see some discomfort coming up in the next few weeks, which we have to deal with. But we are confident that Somalis will find a way to still send money to their families, using other companies that are not blacklisted," he said.

Somalia has been torn by clan fighting since then-President Mohamed Siad Barre was ousted in 1991.

Last year, the U.N. says it received only a fifth of the emergency aid that it requested for Somalia. It is hoping for a better response this year.