Yangon - United Nations humanitarian chief John Holmes
acknowledged Thursday that the international community's relief
effort for the victims of Cyclone Nargis in Myanmar 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 leaving Myanmar
after a three-day assessment tour of the areas affected by the
cyclone that slammed into Myanmar'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 480 millions from the international donors
for ongoing cyclone relief efforts in Myanmar, has been losing more
than 20 per cent of the incoming funds to the government's unique
foreign exchange requirements.
Under Myanmar's foreign exchange rules, dollars brought in by
foreign agencies must be converting into Foreign Exchange Currency
(FEC) at government banks, and then converted into the kyat currency.
Between May and July, FECs have devalued significantly against the
dollar, resulting in a kyat loss of up to 25 per cent, said the Inter
City Press, siting an internal UN memo it had seen.
FECs are controlled by Myanmar's state banks, so the gain
presumably goes to the government.
'It is a significant problem, because the donors will be
rightfully concerned about it,' Holmes told a press conference in
Bangkok late Thursday night.
Myanmar, also known as Burma, is under economic sanctions by the
US and Europe 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 (the government) understand the problem and they are
working with us to find some kind of a solution,' said Holmes.
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 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 tri-partite mechanism including representatives from the
Association of South-East Asian Nations (ASEAN), the UN and Myanmar
government in early June.
Holmes expressed satisfaction with the functioning of the tri-
partite mechanism in coping with the access problem and getting
relief to the vast majority of the needy in the past two months but
acknowledged that the operation still faces challenges ahead.
It is unclear to what extent the international community will
commit to providing 480 million dollars in aid for Myanmar given
ongoing concerns that the assistance may be used to bolster the
regime.
The UN has insisted that all of its relief goes directly to the
communities in need and is handled by UN staff or the non-
governmental organizations it cooperates with.
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