Are remittances sent from the U.S. ending up in terrorist hands?

For the economies of many poor countries, remittances from the U.S. are a lifeline. A remittance is cash that comes into the country from its citizens living abroad. In some countries, this money is critical to keeping the economy going.

For example, in tiny Eritrea, a country on the horn of Africa, 30 percent of the country’s GDP comes from Eritreans living abroad, many of them in the U.S. In Nicaragua and Guatemala, that number is close to 10 percent. In 2012, more than $120 million in remittances was sent from the U.S. to other countries by individual immigrants wiring small amounts of money.

Stephen Fee, producer and correspondent for PBS NewsHour’s weekend show, has been reporting on the subject from the Somali community in Minnesota’s Twin Cities. The amount of money flowing into Somalia from the U.S. as remittances exceeds the amount the U.S. sends that country in foreign aid.

“The most widely cited estimate is that 40 percent of Somalis rely on remittances to get by, so this is a huge driver of the Somali economy,” Fee says.

But there’s concern that some of this money is going to terrorist groups like Al Shabaab. For this week’s Shortwave, P.J. Tobia explains this source of money, how it’s regulated and how it gets from here to there.

Watch Stephen Fee’s segment on Saturday’s PBS NewsHour.