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Huge foreign exchange loss for UN in Burma relief


Rangoon (dpa) - United Nations humanitarian chief John Holmes acknowledged Thursday that the international community's relief effort for the victims of Cyclome Nargis in Burma was losing millions of dollars to the regime's foreign exchange controls.

"This is an extraordinary exchange loss, and where that gain goes I'm not sure," Holmes said in an interview before departing Burma after a three-day assessment tour of the areas affected by the cyclone that slammed into Burma's central coast on May 2-3 leaving about 140,000 people dead or missing.

Inter City Press disclosed earlier Thursday that the UN, which has issued a flash appeal for 482 millions from the international donors for cyclone relief efforts in Burma has been losing more than 20 per cent of the incoming funds to the government's unique foreign exchange requirements.

Under Burma's foreign exchange rules, dollars brought in by foreign agencies and tourists must be converting into Foreign Exchange Currency (FEC) at government banks, and then converted into the kyat currency.

The exchange rate is currently about 880 kyats for each Foreign Exchange Certificate, compared to 1,180 for each dollar, or a loss of about 25 per cent, said the Inter City Press, referring to an internal UN memo it had seen.

"This issue is a very serious problem," said Holmes. "We need to try find a solution."

He said he had raised the issue with the government during talks with the junta held in their capital of Naypyitaw earlier Thursday.

The UN has appealed for 482 million dollars in emergency relief for an estimated two million people still suffering the affects of Cyclone Nargis, especially in the Irrawaddy delta.

Holmes estimated that the relief work would continue for at least another six months, while recovery and reconstruction efforts would go on until April, next year.

International efforts to extend aid to victims of the cyclone have been hampered by the ruling military regime, which during the initial post-catastrophe period slowed the entry of emergency assistance and aid workers to the notoriously xenophobic country.

The aid flow was speeded up considerably after the establishment of a tri-partie mechanism including representatives from the Association of South-East Asian Nations (ASEAN), the UN and Burma government in early June, but the exchange problem was not revealed.

bangkokpost.com


Inter City Press disclosed earlier Thursday : Inner City Press: Investigative Reporting from the United Nations

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"Keeping quiet while monks and other peaceful protesters are murdered and jailed is not evidence of constructive engagement." - Arvind Ganesan, Human Rights Watch.

"I think...I think it's in my basement. Let me go upstairs and check" - M.C. Escher

bkkandrew

Harsh to say it, but such aid should cease while the junta can cream this money off the top.

The whole scenario makes me feel sick.

Gerbil

They should send me the cash and I'll get it converted for a very reasonable commission

Spin

Air strikes at government hq?

Accidental Ajarn

The UN's mission in Burma, as elsewhere, is to take money from taxpayers in democratic countries and first, ensure UN members get high salaries with plenty of bennies, and then pass the remaining money to petty dictators and their cronies in non-democractic countries.

If you want to ensure a mission will be costly and ineffective, call in the UN.

Fucking Army generals in Burma are laughing all the way to the bank at the stupidity of the "international" community.

Mid

UN: Burmese exchange gains on aid 'unsustainable'

United Nations officials on Friday downplayed the extent of foreign exchange losses being accumulated in Burma from a humanitarian aid operation for Cyclone Nargis victims but noted that any loss was "unsustainable."

UN humanitarian chief John Holmes, who visited Burma Tuesday to Thursday to access international relief operations there, acknowledged Thursday that the government's unique foreign exchange controls were posing a "significant problem."

Under Burma's exchange controls, foreign agencies and companies that bring in dollars to the country must purchase foreign exchange certificates (FECs) at state banks that are then used to buy the kyat currency.

The system has been in places for decades as a means of assuring some hard currencies get into government banks instead of flowing into the ubiquitous black market.

While the FEC and dollar exchange rates in kyat used to be similar, over the past months, the FECs have devaluated up to 20 to 25 per cent against the dollar-kyat rate, meaning a foreign exchange gain is being made by state-run Burmese banks.

"A lot of the assistance we supply would be purchased overseas, so there is no foreign exchange loss on that," said Daniel Baker, the Myanmar-based representative for the UN Office for the Coordination of Humanitarian Assistance.

Baker said the UN estimated that its exchange rate loss on FECs was small, but any loss was likely to be sensitive, given the regime's pariah status among Western democracies.

"In the long run, it's not sustainable because the donors are not going to give us money if they know they are going to lose a percentage to the government," Baker said at a press conference in Bangkok.

Burma is under economic sanctions by the United States, Canada and most European countries because of its atrocious human rights record and refusal to introduce democratic reforms.

Humanitarian aid to the country is often given on the condition that it bypasses government agencies.

"I think they [government officials] understand the problem, and they are working with us to find some kind of a solution," Holmes said at a press conference Thursday night.

The United Nations earlier this month issued a flash appeal for 480 million dollars in humanitarian aid for about 2 million victims of Cyclone Nargis, which smashed into Burma's central coast on May 2-3, leaving about 140,000 dead or missing.

International efforts to extend aid to victims of the cyclone were initially hampered by the ruling military regime, which imposed bureaucratic obstacles to the inflow of emergency relief and aid workers to the country in the immediate aftermath of the catastrophe.

The aid flow was speeded up considerably after the establishment of a tripartite mechanism that included representatives from the Association of South-East Asian Nations, the UN and the Burmese government in early June.

The UN has insisted that all of its relief go directly to the communities in need and is handled by UN staff or the non-governmental organizations with which it cooperates. dpa

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