The War on Terror pressured Pakistan to crack down on informal money-transfer systems

Evidence

Since the late 1990s—and increasingly after 2001—the U.S. government has increased its e√orts to track global financial flows. In response, the Pakistani government has tried to eliminate the informal money-transfer systems, both to alleviate the accounting problems created by a dual banking system in which large amounts of currency enter the country without benefiting the state and to create more accurate paper trails to make alleged criminal activity traceable. Along with migrants, smugglers and tra≈ckers use the informal money exchange and money transfer systems. Without doubt, terrorist networks are part of the new international economy alongside the markets of exploitative capitalism legitimized by the state (Napoleoni 2005). — Junaid Rana, Terrifying Muslims, 507

Categorization

• QUESTION: What specific informal transfer systems (hawala, hundi) does the Pakistani state target, and how does the dual-banking accounting problem actually operate?
• XREF: Connects to the diamond-district extralegal finance reading — both show how state crackdowns hit legitimate informal economies used by ordinary migrants.