Cash scam in Myanmar swallowing UN cyclone aid: ReportJuly 29th, 2008 - 10:58 pm ICT by IANS
London, July 29 (IANS) The UN has admitted that nearly $10 million or 15 percent of the aid meant for the survivors of the Cyclone Nargis in Myanmar have been skimmed off by the ruling junta. In a well-planned cash scam, which is still running, the military regime of the country forces the UN aid agencies to buy the local currency, the kyat, at a higher rate from banks run by the government, the Telegraph newspaper reported Tuesday.
According to the paper, the UN agencies are forced to buy the kyat through government backed Foreign Exchange Certificates (FEC). A $1 FEC buys only 880 kyat, while in value $1 in open market is about 1,100 kyat.
In this way, 15 percent, or five million pound (nearly $10 million), of aid has been lost, according to Sir John Holmes, the UN under-secretary general for humanitarian affairs.
In New York Monday, Holmes said: “We were arguably a bit slow to recognise… how serious a problem this has become for us.”
A UN spokesman in Yangon also told the newspaper that the exact losses were still being calculated. Experts believe that the losses could be higher as the discrepancy in exchange rates since the cyclone hit Myanmar in May has been around 25 percent.
The scandal was first exposed in June by a New York blog which received a leak of minutes from a teleconference in which officials raised their concern over the scandal.
However, top officials in Myanmar denied such reports. On July 10, they launched an appeal for another 150 million pound (nearly $299 million) in cyclone aid.
In a report last year, the International Monetary Fund had also raised alarm over the issue of discrepancies between the official and market exchange rates in Myanmar.
The devastating Cyclone Nargis hit Myanmar May 2-3, killing more than 130,000 people and rendering millions homeless.
A joint assessment report by Myanmar, the Association of Southeast Asian Nations (ASEAN) and the UN has estimated the total damage and losses at 4.4 to 4.5 trillion Kyats ($4.02 to $ 4.13 billion).
The UN has spent $200 million on aid to Myanmar since the cyclone struck.