New Delhi - The United Nations on Thursday admitted that over the past three months about USD 1.56 million of aid money for victims of Cyclone Nargis has been lost to Burma's distorted foreign exchange mechanism.
Daniel Baker, the UN humanitarian Coordinator in Burma in press statement said, "The loss in value due to foreign exchange for the Cyclone Nargis international humanitarian aid during the last three months has been about USD 1.56 million."
"We are not getting the full value of dollars donated for emergency relief, and donors are extremely worried and keen to see that this issue is resolved," Baker added.
Baker's remarks in the statement came weeks after the UN Humanitarian Chief John Holmes, after his second visit to Burma in late July, said there is a 'significant problem' in the exchange mechanism and that the UN has lost an estimated USD 10 million of aid money.
Holmes told reporters that he had raised the concern of the international community with the Burmese government on the foreign exchange regulations and urged it to resolve it.
Sources said the Burmese military regime has been lining their pockets with aid money through a twisted foreign exchange mechanism.
While aid money transferred to Burma are received in hard currency, the Banks, run by the government remits the money in Foreign Exchange Certificate (FECs), which it treats as equivalent to the US dollar.
But in the market, FEC is valued at Kyat 870, while US dollar is valued at 1170 Kyat.
On Friday, according to the statement, the Burmese Minister for National Planning and Economic Development Soe Tha met members of the TCG to resolve the problem of the exchange mechanism.
During the meeting, which included the UN Resident Coordinator and the Humanitarian Coordinator, the Burmese Deputy Foreign Minister and TCG Chairman Kyaw Thu and an ASEAN representative, Dr. Puji Pujiono, Soe Tha said the Burmese government has an alternative to solve the problem.
"We do have alternative ways for the international humanitarian community, including international NGOs, to bring in dollars and to get the full dollar value of their assistance" Soe Tha told the meeting.
Soe Tha said the UN agencies could avoid loss from the FEC by employing dollar-to-dollar direct bank transfers to the vendors when purchasing humanitarian goods and services.
"It will then be up to the vendors to manage their dollar accounts," he added.
The Burmese minister also confirmed that the vendors will have no obligation to convert the dollars into FECs or local currency neither will there be an obligation for the international humanitarian community to commission particular vendors.
But the Myanmar Foreign Trade Bank, the principal bank in Burma that is used by several aid agencies to transfer aid money, on Thursday told Mizzima that they are continuing to give customers in FEC while withdrawing their money which are transferred abroad.
"We treat the FEC as equivalent to the US dollar and give customers the same amount. But we deduct 10 per cent from the amount as tax," the official, who did not wished to be named told Mizzima.
Bishow Parajuli, the UN Resident Coordinator and TCG member, welcoming the Burmese government's effort, said, "This mechanism would hopefully help us to address the bulk of the problem very quickly, and we appreciate that the government has been willing to work with us on a solution."
However, critics said the UN has long known of the discrepancy in the Burmese foreign exchange mechanism even before the international community rushed in to the country to help victims of Cyclone Nargis.
An observer in Rangoon said the UN fully knows of the twisted foreign exchange system that the Burmese government has been using but it chooses to remain silent.
The source at the MFTB said, there is no reason for the UN not to know about the loss of at least 10 to 15 per cent on every dollar transferred to Burma.
