Abstract
For centuries urban hubs around the Indian Ocean and the Mediterranean have been linked together by a system of informal money transfer known as hawala. Initially developed as a system for financing long-distance trade, a hawala network is constituted by a diverse set of trusted brokers who send and receive money from each other on behalf of their customers. Today this network continues to function, despite the expansion of formal banking channels, the introduction of new systems of exchange and communication, and intensified efforts to regulate its activities, and is used for purposes as diverse as remittance transfers, import/export financing, and most recently the provision of aid in conflict areas such as Libya and Syria.
An important way in which hawala brokers have managed to maintain and extend their transnational networks has been through the incorporation of various technological devices into their practices. This paper will map out the socio-material arrangements in these informal value transfer practices and document the technological artifacts that mediate hawala brokers’ networks and transactions: smart phones, online messaging and currency exchange applications, television screens, and (physical) notebooks among others. Brokers have integrated these diverse technologies for purposes as diverse as: delegating risk (of fraud, getting caught, incorrect debt settlement claims by other brokers), evading state surveillance, communicate within the network, keeping records of their transactions, and tracking fluctuations in market prices. Examining these practices will help us unpack how technological artifacts and infrastructures shape informal economic activity and mediate cross-border economic transactions in the Middle East.
Existing scholarship on hawala in various contexts has mostly focused on the interpersonal and communal trust in informal economic networks. However, these studies fail to capture the broader moral economy of risk and trust in which hawala operates. In fact, I argue, technological artifacts are a central part of these moral economies. In conducting their operations, hawala brokers act with technical artifacts, which mediate not only cross-border transactions but also relations of trust. As such, this paper will adopt an approach that emphasizes the “social shaping of artifacts” – i.e., how users and technological artifacts reconstitute each other in the course of economic action.
In developing this argument, I will draw on interviews with government officials, hawala brokers, and clients in Beirut and Istanbul, which I complement with existing literature and policy reports on informal money transfer systems elsewhere in the Middle East.
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