Following the Terrorist Informal Money Trail

[Ray]

Following the Terrorist Informal Money Trail: The Hawala Financial Mechanism


Strategic Insights, Volume I, Issue 9 (November 2002)

by Robert E. Looney

Strategic Insights is a monthly electronic journal produced by the Center for Contemporary Conflict at the Naval Postgraduate School in Monterey, California. The views expressed here are those of the author(s) and do not necessarily represent the views of NPS, the Department of Defense, or the U.S. Government.

Click here for a PDF version of this article.

Since 9/11, investigations into the al Qaeda financial network have led to several notable successes in the United States and Europe. Much of this achievement in the United States has resulted from strengthening the financial investigatory powers of domestic law enforcement agencies and coordinating them through the Treasury Department's new Foreign Terrorist Asset Tracking Center. In other countries, the Paris-based Financial Action Task Force, for example, is helping to coordinate the tracking of terrorist funds through the global banking system and cracking down on countries that fail to improve transparency and regulation. These efforts are already proving useful in uncovering large-scale drug-trafficking and money-laundering operations. They have also helped reveal important information on terrorist groups, particularly those operating in the West.

Financial investigators tracking al Qaeda assets rely heavily on data and paper trails from commercial banks and financial regulators in pursuing and investigating leads. Such data have included the tracing of wire transfers between suspected hijacker Mohammed Atta and Shaykh Saiid of Dubai, believed to be one of Osama bin Laden's key financial operatives. Unfortunately, these efforts have achieved little success to date in reaching the core of the al Qaeda financial network. The problem is that much of the organization's funding mechanisms—like its cells—are small and inconspicuous, often using a traditional Muslim method of money exchange called Hawala.
Workings of the Hawala System

The word "hawala" means "transfer" in Arabic. In some contexts, the word "hawala" is used synonymously with "trust," usually to express the personal connection between participants and the informal nature of the transactions.

In essence, Hawala is a transfer or remittance from one party to another, without use of a formal financial institution such as a bank or money exchange, and is, in this sense, an "informal" transaction. There are several other common aspects to Hawala. First, in most cases, Hawala transactions go across international lines, such as with worker remittances to their home countries. Second, Hawala usually involves more than one currency, although again this is not absolutely required. Third, a Hawala transaction usually entails principals and intermediaries. To accommodate requests of the principals, the intermediaries usually take financial positions. Later, much as in the case of conventional banking practices, these transactions will be cleared amongst the units to balance their books.

A typical transaction often involves an expatriate remittance. For example, an expatriate Pakistani worker in the United Arab Emirates wishes to send money back home. To do this he goes to an intermediary, the Hawaladar, to arrange the transfer. He makes payment in dollars or other convertible currency. The Hawaladar in the UAE contacts a counterpart in Pakistan, who makes payment in rupees to the remitter's family or other beneficiary. Obviously, some network of family or connections among Hawaladars is required to make such a system work on a large-scale and ongoing basis.

It is important to note that although the remitter in this case wished money be sent to a distinct location, no money actually crossed the border physically and no money necessarily entered the conventional or official banking system (unless of course the Pakistani recipient decided to place it there). The transaction rests upon a single communication between Hawaladars and is often not recorded or guaranteed by a written contract. The trust between the two Hawaladars secures the debt and allows the debt to stand with no legal means of reclamation. There is an implicit guarantee on payments, however, because a broken trust would result in community ostracism constituting economic suicide for the Hawaladar (Jost and Sandhu, 2002).

Typically, poorer individuals use the Hawala system to take advantage of the low cost and quick delivery that the system provides. For the blue-collared worker who transfers a monthly stipend of $100, the unofficial Hawala is a far cheaper way to send money back home than the official banking system, at a rate of around 1% of the amount transferred. Because of its low overhead costs, Hawala provides a more favorable market exchange rate than the official one. In short, the economic attraction of Hawala to the customer is usually the speed, low cost, and reliability of the system compared to use of established financial institutions such as banks, money exchanges, or Western Union. The system is ideal for use in isolated localities like the tribal areas of Pakistan and Afghanistan where formal financial institutions are rare.
Extent of the System

Hawala agents work in a range of settings—from curbside stalls and modest offices in South Asia to back rooms and secret locations in Europe and North America. The only limits to the size of a transaction are the willingness of the sender to carry cash and the capacity of the receiving agent to cover the transaction; exchanges in the tens of thousands of dollars are frequent.

Although Pakistan, India, and the Persian Gulf states are home to the largest concentration of Hawala organizations, Dubai, in the United Arab Emirates, perhaps handles the largest volume of transactions. The system has global reach. Investigators believe Hawala organizations exist throughout the United States and Europe.

Given its informal nature, there is no precise measure of the size of the system. Estimates abound though (Jost and Sandhu, 2002). Pakistani officials estimate that over $5 billion in transactions occur through Hawala networks every year, making it in effect an extremely large foreign exchange clearing house. One third of these transactions reportedly consists of the repatriation of funds from expatriate Pakistanis to their families. Pakistani nationals may hold between $40 billion and $60 billion in overseas financial assets—an amount roughly equivalent to the country's gross domestic product.

In the case of India, Interpol places the size of Hawala at possibly 40 percent of the country's gross domestic product. In 1998, the most recent year for which data are available, estimates place the amount of money in the country's Hawala system at $680 billion, roughly the size of Canada's entire economy (Baldauf, 2002).

In summary, the Hawala system, especially in South Asia, is extensive, extremely liquid and a rational choice for poorer segments of the population. While seeming a bit mysterious to outsiders, the fact is the Hawala is comparable in mechanics and economic structure to most other remittance alternatives, including those that run through licensed channels. The most obvious "legal" problem with Hawala in remitting countries is the lack of any registration or licensing, although the operations themselves are generally harmless. In receiving countries like India, there is in addition the more subtle potential clash between Hawala operations and exchange controls whereby Hawala transactions often result in increased black market transactions and expanded underground activity. The fact is, though, that Hawala is essentially an economic phenomenon. It would remain so even if there were no terrorist international transfers, drug trade, or money laundering.

Although the great bulk of Hawala transactions are as harmless as the remittance example noted above, the system has proved to be extremely useful for money laundering and masking the intricate financial operations required by terrorists, drug dealers and other criminal elements. Given its size and semi-legitimate status in South Asia, it is not hard for terrorists to transfer money using Hawala channels. They are labyrinths replete with pseudonyms, middlemen and dead-ends. Wealthy Arab patrons in the Middle East likely send funds to al Qaeda through Hawala organizations, as do myriad Arab charities acting as fund-raising fronts. The smaller the value of the transfer the less attention it is likely to attract, but it is still easy to transfer large amounts of money without raising questions.
Methods to Combat Terrorist Use of the System

In the war on terrorism, a major challenge will be to infiltrate and monitor Hawala networks in the Middle East. A crackdown by Arab and South Asian governments at the behest of Western governments is simply not feasible. The vast majority of the money is from legal, legitimate sources, and the Hawala organizations are numerous and extremely powerful.

Arab and South Asian governments have neither the effective means nor the will to closely monitor each transaction in these organizations. In any case, methods of this sort would most likely prove ineffective. As an amorphous collection of independent operators, Hawalas do not depend on a single location or infrastructure. A crackdown that attempts to ban the networks would simply drive them underground. Because many citizens in these countries would view actions of this sort as caving to Western demands at the expense of Muslim tradition, it could also create a backlash against the governments.

Instead, what may need to be done is to see how Hawalas can be licensed and or registered so that they will continue to serve those who need the service while, at the same time, not becoming abused by money launderers and criminals.

Along these lines, participants at a conference in Abu Dhabi held on May 16, 2002 recommended the setting up of control systems to monitor Hawalas with sufficient documentation about the remitters and recipients of funds, to guard against any diversion of such funds into illegal or criminal activities. They also called for government licensing and regulation of Hawala offices in the same way as insurance offices are regulated.

For its part, Pakistan is establishing a Special Investigation Group (SIG) in the Federal Investigation Agency (FIA) to counter terrorism. This group could help enforce Hawala regulations. In addition, crime wings of the FIA would help the SIG investigate cash flows to and from suspected groups and individuals through illegal monetary transactions.

If licensing, registration, or normal police work (described by Jenkins, 2002) is ineffective in stopping the abuse of the Hawala systems by terrorists, an economic approach should be considered. If the desire of the authorities is to constrain or significantly reduce the importance of Hawala activity, this means reducing the economic incentives to use the Hawala system. There is probably no better way to accomplish this than to facilitate cheap, fast remittances across international boundaries, and to do away with dual and parallel exchange markets, which are always an incentive to keep transactions underground.

In other words if those countries had reasonably expedient, well regulated and user-friendly banks, then the Hawala system would not have flourished and would not have been abused by terrorists and criminal elements. In this regard, there have been some encouraging signs. Several exchange companies in Egypt, Jordan, Lebanon and the Gulf countries have now adopted the door-to-door delivery of money in a manner similar to one that the Philippine banks have successfully introduced and implemented to stave off the unofficial market operators. The more innovative institutions in India are now using low-cost couriers to deliver door-to-door service. This compensates for the lack of presence of banks in different parts of the country. The smaller and more numerous exchange companies are also competing today with the Hawala system in speed, efficiency of execution, settlement, and delivery of money and services.

These factors may prove to be the demise of the Hawala system that has been prone to errors, fraud, and abuse by unscrupulous groups.

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For Further Reading

Alden, Edward, "Terror's Money Trail" (Financial Times, October 18, 2002).

Baldauf, Scott, "The War on Terror's Money--India's Six Month Investigation Offers Lessons on Fighting Underground Banking" (Christian Science Monitor, July 22, 2002).

Farah, Douglas, "Al Qaeda's Gold: Following the Trail to Dubai" (Washington Post, February 18, 2002).

Frantz, Douglas, "Ancient Secret System Moves Money Globally" (New York Times, October 3, 2001).

Jenkins, Holman, "How About al Qaeda's Moneymen?" (Wall Street Journal, September 11, 2002), p. A15.

Jost, Patrick, and Harjit Singh Sandhu, "The Hawala Alternative Remittance System and Its Role in Money Laundering" (Interpol, October 2, 2002).

Sfakianakis, John, "Antiquated Laundering Ways Prevail" (Al-Ahram Weekly Online, April 4, 2002).

Siddiqui, Tahir, "Special Body to Counter Terrorism Planned" (Dawn, August 8, 2002).

An illuminating commentary of how money plays a sustaining role in fostering terrorism.

The method is ingenuous and devious and in short, very successful.

It is worth noting that Dubai is the major hub of all hawala transfer.

[Ray]

Monopoly Money: the grand strategic level


The theological role which doctrine of the Jihad played in the development of Islam must be left to the divines. But from a historical and military perspective, the answer must in part have to do with money. One recurrent theme in Islamic history has been its ability to transform marauding societies, be they Arab caravan raiders, Hulagu Khan's hordes, or Turkic nomads into the Faithful -- without altering their martial proclivities in the least, as a list of Islamic battles illustrates. The Mongols who sacked Baghdad in 1258 and killed the Caliph of Islam were themselves converted less than a hundred years later and remain so to this day.

John Keegan, writing for the Daily Telegraph (whose article sadly, has been archived and must be quoted from elsewhere) remarked on the ability of Islam to redirect the terrifying ferocity of raiding societies:

The Arabs were horse-riding raiders before Mohammed. His religion, Islam, inspired the raiding Arabs to become conquerors of terrifying power, able to overthrow the ancient empires both of Byzantium and Persia and to take possession of huge areas of Asia, Africa and Europe. It was only very gradually that the historic settled people, the Chinese, the Western Europeans, learnt the military methods necessary to overcome the nomads. They were the methods of the Greeks, above all drill and discipline. The last exponents of nomadic warfare, the Turks, were not turned back from the frontiers of Europe until the 17th century.

When the Jesuit Pierre Teilhard de Chardin wistfully considered harnessing the power of love, he forgot the alternative: greed. But Islam's worldly men, its viziers and generals, were not so remiss. They saw how the doctrine of Jihad -- or their interpretation of it -- could feasibly redirect raiding societies outward at the Dar al Harb recirculating the pickings inward to the Dar al Islam. Europeans gazing the other way proved the thinking symmetrical. When Elizabethan admirals faced the problem of destroying Spanish commerce in the New World nearly 800 years later, they adopted the same approach by issuing Letters of Marque to pirates, converting them to privateers at the stroke of a pen, harnessing outlawry in the cause of the state. Yet violence, like fire, must be handled carefully. The problem of how to define, harness and regulate the Jihad occupied Islam from the earliest times. Under the modification of historical events, scholarly writing and political calculation, a variety concepts emerged ranging from Jihad as "a vast system of outdoor relief" for restless young Islamic men; to Ibn Tayamiyya's belief in an "active Jihad" that would cease only with a world under Islam; to the Sufi concept of Jihad as an inner struggle against the base instincts of the body and the corruption of the soul.

In practice the doctrinal disputes little concerned the common Muslim, any more than debates over Transubstantiation disturbed the average churchgoer -- until it was time to dust off the Jihad in the service of a political cause. Time and again differing attitudes toward the nature of Jihad characterized the sectarian, political and monetary agendas of factions within the Islamic world, serving as a shorthand; a rendition in code, of their ultimate goals. The scientific and economic collapse of the Islamic world in the last two centuries dammed up an enormous tension; and the release offered up by ambitious demagogues has always contained a large pinch of active Jihad. Yet money if at the root, must never predominate; never in particular be allowed to disturb the order within Dar al Islam. One disillusioned jihadi belatedly realized that the rewards of Paradise were not equally distrubuted within the Ummah. "Have you ever noticed that ... jihadis, ... come from the rural areas? The recruitment of Karachiites is strictly discouraged ... because ... the army establishment needs jihadis with below-average intelligence." A worldly reward for the Pakistani officers; 72 virgins and a cheap commemorative video for the martyrs. Thus had it ever been; a desert couch for the lowly soldier; the vizier to his palace; and the grave the last resting place for the infidel, under the banner of holy war. The Jihad is different things to different people; in one respect a civil war within Islam, with Saudi Arabia and Iran contending for supremacy, and the Dar al Harb, as always, footing the bill.

If America is to win the War on Terror at the grand strategic level, not for a generation, but for time to come, it must help Muslims alter the very nature of Islam itself. Until Muslims bring the mutable concept of Jihad under control and forever forswear the kuffar as an object of conquest, it will always remain a spring under tension waiting to be harnessed by unscrupulous men, whether Pakistani officers, corrupt Iranian Mullahs or oily Saudi princes. Secretary Rumsfeld recently asked, "how many young people are being taught to go out as suicide bombers and ... how does that ... get reduced?" And the answer, is in part to make it un-Islamic.
The Color of Money: the operational level

So much for the principle. But the operational flow of money needed to destroy the Dar al Harb and direct it into the coffers of Dar al Islam takes several forms, or colors. The largest inflow from the Dar al Harb to the Dar al Islam consists principally oil revenues to Islamic states. A large part of it is directly recycled into the Jihad. US News and World Report describes how more than $70 billion was paid to terrorist groups by Saudi-controlled Islamic charities, a mere keeping up with Joneses to prevent the Iranians from wresting the leadership of the militant Islamism from Wahabism.

The Wahhabis were but one sect among a back-to-the-roots movement in Islam that had limited attraction overseas. But that began to change, first with the flood of oil money in the 1970s, which filled Saudi coffers with billions of petrodollars. Next came the Iranian revolution and the Soviet invasion of Afghanistan, in 1979. Most ominously for the Saudis, however, was a third shock that same year: the brief but bloody takeover by militants of the Grand Mosque in Mecca. Threatened within the kingdom, and fearful that the radicals in Tehran would assert their own leadership of the Muslim world, the Saudis went on a spending spree. From 1975 through last year, the kingdom spent over $70 billion on overseas aid ... "Islamic activities"--building mosques, religious schools, and Wahhabi religious centers ... the largest worldwide propaganda campaign ever mounted"--dwarfing the Soviets' propaganda efforts at the height of the Cold War.

A more subtle way of siphoning the contents of the kuffar's pocket into the Dar al Islam is through institutionalized discrimination now known as dhimmitude. Under these arrangements non-Muslims are tolerated on condition of accepting second-class citizenship. The non-person status of expatriate workers within Saudi Arabia, especially those from poor countries like the Philippines, is open and well known. But even in Malaysia, with a liberal reputation, the 30-year old bhumiputra policy gives the bare-majority Muslim Malays (53%) preferences over Hindus, Bhuddists and Christians in all aspects of life, from employment to university admission. It is cheerfully described as "affirmative action". Indonesia has for over 50 years conducted a massive program of transmigration, the state-sponsored resettlement of Muslim Malays onto lands occupied since time immemorial by non-Muslim peoples like the Melanesians. It is robbery with a human, albeit bearded, face.

A third mode, widely practiced in the past and now making a comeback is the exaction of tribute. The Russian state paid tribute to Islamic overlords for over 200 years following their entry into Central Asia in in the 7th and 8th centuries. The exaction of tribute was always the dual of Islamic "tolerance" for other religions; who for so long as they paid were "free" to continue their own "internal life". Even European powers and the new-independent United States paid tribute to the Barbary States in exchange for the right to traverse the oceans, for which Congress appropriated $80,000 in 1784. The Barbary states, which included Tripoli, Algiers, Tunis and Morocco, raided as far as the coasts of Ireland and Iceland, capturing at one point the entire population of Baltimore, Ireland, of whom but one returned again. The practice came to an end only when the United States launched its first overseas war, memorialized in the Marine Corp's Hymn verse "to the shores of Tripoli". But it has since returned couched in other modern parlance; still money in exchange for suspending mayhem. As part of the Oslo Peace Agreement, the European Union agreed to pay the Palestinian Authority, as an inducement to good behavior, the sum of $7 million a month; which even the EU now fears is being used to fund the Al Aqsa Martyr's Brigades. Plus ca change, plus c'est la meme chose.

To win the War on Terror at the operational level, these funds flows must not only be disrupted, but the incentives to resurrect them permanently destroyed. The first goal would be to adopt the objective of dismantling the Saudi regime and its state religion, Wahabism as national policy. The United States is not yet politically ready to take that step. Until then, the current conflict will merely correspond to Roosevelt's "short of war" Lend-Lease and Neutrality Patrol phases rather than the full-blown Second World War that came later. The true place of 9/11 on the historical timeline may not be with Pearl Harbor but the sinking of the Reuben James. The second step would be a total embargo of funds transfers to groups like the Palestinian Authority in the context of a new Atlantic Charter which would declare all payments of tribute and inducements to dhimmutude now, henceforth and forever illegitimate. This would provide the legal framework for the third step: a series of punitive proceedings of which the $1 trillion lawsuit by the 9/11 survivors against the Saudis would merely be the beginning, a financial judgement at Nuremburg that will be particularized in every country. Like the war crimes tribunal set up in Iraq to punish the torturers of the Saddam regime, the victims of terror in Israel, Lebanon, Algeria and Kashmir; and those who have been deprived of livelihoods in Malaysia, Indonesia and the Sudan should have a venue for redress. Cumulatively, these steps would not only weaken the active jihad, they would destroy all future monetary incentives to wage it.
Blood Money: the tactical level

Whenever a coalition soldier is killed in Iraq, his death is paid for in cash. "The bad guys will kill you for $1,000. That's the bounty on an American soldier's head. Guys are being paid $1,000 to go out and attack American soldiers. It's all about dollars." Estimates of the cash available to Saddam for this purpose range from a low of $132 million, based on a calculation of the residual from the looting of the Iraqi banks to a high of tens of billions, the skimmings of many years of oil revenues carefully deposited in secret accounts all over the world.

The real problem for the Ba'athist high command is conveying funds from a centrally controlled location and converting it to currency in the hands of the assassin. Who holds the money calls the shots and there can be no question of Saddam Hussein entrusting a large percentage of his stash to the field commanders, however this would simplify his cash management problem. James Dunnigan has convincingly argued that the temptation to steal loose cash is the single greatest reason for the decline of terrorist organizations into criminal gangs. If Saddam is to retain control, he must keep his hand on the money.

Still, it would be impractical for Saddam to authorize each individual payment for the the assassination of a coalition soldier or the purchase of individual weapons and other materiel. The likely compromise would be a division of Ba'athist command into a small number of subordinate groups, each allotted a general war aim and a budget. The budget is probably topped up as needed. This in fact appears to be the case. The Seattle Post-Intelligencer reports that:

The Iraqi insurgency in Baghdad appears to have a central leadership that finances attacks in the capital and gives broad orders to eight to 12 rebel bands - some with as many as 100 guerrillas, U.S. Army generals said. "I'm increasingly of the belief that there's central financial control and central communications," said Dempsey, who commands the Army's 1st Armored Division, which controls Baghdad and the surrounding region.

The basic mechanics of disbursement are fixed by two conditions: the funds must be centrally held yet finish up as cash. Consider how Saddam might meet the first condition. He is unlikely to be sitting in a safe house with a huge cube of cash in the back room. He (and the money) would be too immobile and vulnerable to capture. It is therefore overwhelmingly probable that the Ba'athist war chest is secreted in bank accounts, either in the West or neighboring Arab countries. But here it runs up against the second given: that the money must eventually turn up as cash, to be paid to the individual terrorists in relatively petty sums; for their daily flour, beans and olive oil. The conversion of funds into cash; and its storage and transport in the field must be the single hardest command and control problem of the Ba'athist terrorist campaign.

The seizure of a half a billion Iraqi dinars inbound from Pakistan at the port of Umr Qasr in Basra offers a tantalizing glimpse into the logistics of blood money. The money might well have come from the Al Qaeda, which Dan Darling reports as stripping Afghanistan of funds to launch their Iraqi operations. But the cash management problems of Al Qaeda would essentially be identical to those of Saddam and their solutions virtually indistinguishable. They are in a race against time.

US officers in Iraq (hat tip: Andrew Sullivan) have noticed a drop off in recent attacks on US forces.

"Since Operation Iron Hammer, we have seen a drop-off in attacks against us ... All these things may be due to the enemy lying low to see what we're doing; it might be due to us having significantly hurt the enemy during the operations; it could be that the thugs and criminals being paid to conduct the attacks are not up for fighting anymore. And, it might also mean that the average citizen of Baghdad is getting sick of fighting, and that same average citizen is better supporting the coalition (which we believe, from our data). Or, it might mean the enemy is gearing up for another offensive."

There might be an additional factor: the Ba'ath field forces could be running low on cash. This is not the same thing as lacking funds. Funds might exist but ready cash might not, as even the US Army found in the case of the CERP program. Recent American operations like Iron Hammer almost certainly increased the "burn rate" of Ba'athist ready funds, as they were forced to respond to the US offensive. The care of wounded, the shifting of safe houses, the changes of clothing, the disposal of vehicles, the replacement of weapons, the salaries paid to evading personnel -- all this must have dinted the budgetary allotment of Ba'athist subcommands to no small degree. It would naturally compel a slowdown in terrorist operations until their funds can be topped up by operations such as that detected in Um Qasr.

One can compare a cash-driven insurgency to the fuel state of a fighter aircraft. Pilots (and aviators) know that enemy aircraft can sometimes be defeated by forcing them into afterburner. Not all the fuel back at base can help an aircraft whose tanks are dry in the air. If the US can keep up the tempo, it may force the Ba'ath into a chronic state of cash starvation and disintegration if they must burn up money faster than it can be smuggled, laundered and distributed to them. The Reuters disparagement of Secretary Rumsfeld's review of Iraqi forces, who now outnumber US troops, misses what Rumsfeld well knows. Iraqi forces can keep up the tempo on the Ba'ath, leaving US forces to strike pinpoint blows. What is worse for Saddam, the Iraqi forces are connected to a larger fuel tank, as it were, then the Ba'ath. They have access to oil revenues on a volume of more than 2 million barrels exported per day and have no problems cashing checks or making electronic funds transfers.
Show Me the Money

This ends the series of posts on the relationship between money and the global Jihad, and its current manifestation, the War on Terror and the Iraqi pacification campaign. It points out the central role of lucre in the very concept of a global war against the Dar al Harb and sketches out the mechanics of its implementation. Money is a two edged sword; and like all swords, those who live for it may die by it.
http://belmontclub.blogspot.com/2003...ney-grand.html

A commentary on the subject on Money and how it powers the engine of terrorism.

[Ray]

Asian money centres on guard

SINGAPORE: Asia-Pacific financial capitals reacted calmly on Friday to a report one of them could be hit by an Al Qaeda terrorist attack, but officials said the region was prepared for the worst.

The Financial Times quoted French anti-terrorist supremo Jean-Louis Bruguiere as saying cities like Tokyo, Singapore or Sydney could be attacked by Al Qaeda to undermine investor confidence in the region.

But Asian governments have long been aware of the danger and dealers said financial markets were largely unaffected by the British newspaper’s report.

US allies in particular have been on guard since the Al Qaeda attacks on New York and Washington in September 2001, followed by bombings in Indonesia and the Philippines blamed on the Jemaah Islamiyah group.

Subsequent attacks in Madrid and London also heightened fears that an important metropolitan centre in the Asian region could be next.

“The market seems to have ignored the terrorist threat,” a dealer with a local brokerage in Singapore said on Friday, adding the city-state was still seen as a “safe haven” by investors. But armed police now patrol Singapore’s MRT train system and entertainment districts frequented by foreigners. Guards from the legendary Gurkha forces armed with assault rifles and curved daggers protect key foreign embassies.

Singapore Prime Minister Lee Hsien Loong sounded a sombre note during the country’s 40th independence day celebrations this month, urging his people to be “psychologically prepared” for an attack after the July 7 London blasts.

Singapore, frequently visited by American warships and aircraft, will host the International Monetary Fund and World Bank meetings in September 2006 involving 16,000 delegates, including dozens of VIPs.

Japan said on Friday it already has tight security in place. Al Qaeda has repeatedly threatened Japan, which has 600 troops in Iraq and hosts the largest US military base in Asia.

“It isn’t clear how concrete this report is,” said Chief Cabinet Secretary Hiroyuki Hosoda, adding Japan was cooperating with other countries on security and “we would like to do our best so that no such thing happens”.

Tokyo, which has the world’s biggest public transport network, stepped up security after the suicide bombings in London, although its subways have already been well-guarded since 1995 when a doomsday cult spread sarin gas in rush-hour trains, killing 12 people and injuring thousands. In Hong Kong, a police spokesman said the territory, which will host the World Trade Organisation summit in December, was under a ‘moderate’ level of alert, the second highest.

“The chances that Hong Kong gets attacked are very low. But we keep ourselves prepared, alert and vigilant,” chief superintendent Alfred Ma of the public relations branch said.

South Korea, where American troops are also stationed, is also on alert in case it might be a target, especially during November’s APEC summit in its southern port Busan. It maintains 3,600 troops in Iraq, the third-largest contingent after the US and Britain. In Kuala Lumpur, anti-terror security is relatively low profile compared to places like Manila or Jakarta, where the undercarriages of vehicles entering luxury hotels are checked with mirrors for hidden explosives.

“We are not and should not be a target of terrorists but we are alert for any possibilities,” said Abdul Aziz Bulat, Kuala Lumpur city criminal investigation chief. “We have not done anything to make people hate us.”

Thailand’s Defence Minister General Thammarak Issarangkura Na Ayutthaya shrugged off the French magistrate’s warning, saying any country could be hit and Bangkok’s main concern was unrest in the country’s largely Muslim south. afp
http://www.dailytimes.com.pk/default...-8-2005_pg7_44

Could it be because Hawala is drying up and bank robbery is the only answer?

Of course, a little bit of religion thrown in does make downright robbers, thugs and dacoits a but respectable in the eyes of some of their compatriots in religion