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Leaked Minutes Show UN Knew of 20% Loss in Myanmar 2
Weeks Before $300 M Request
Byline: Matthew Russell Lee of
Inner City Press at the UN: News Analysis
FEC/Burma Shave series - 1st (June 26), 2nd, 3rd, 4th, last
UNITED NATIONS,
July 28 -- While UN humanitarian
officials John Holmes and Dan Baker have belated admitted currency
exchange
losses of up to 25% to Myanmar's government, an internal UN
document obtained
by Inner City Press shows that the UN knew as early at June 26 of a
"very
serious 20% loss on foreign exchange... changing US Dollars to Foreign
Exchange
Certificates [FEC] then to local currency, Kyats."
This
appears in the
internal "Notes
for the Record" of an "Emergency Task Force
Teleconference" call involving top officials in Yangon, Bangkok and
Rome,
available here.
But on July 10, the UN's humanitarian coordinator for Myanmar
Dan Baker answered Inner City Press' questions by stating there were no
significant losses to the government. Video here,
from Minute 46:20.
The
troubling implications of the June 26 "Notes for the
Record" are not
limited to Mr. Baker. Fully two weeks after the "very serious 20% loss
on
foreign exchange" was acknowledged in writing by the UN, an appeal for
an
additional $300 million was launched at the UN in New York, with no
disclosure
at all about the losses.
The
preparation of this request for additional funding is noted in the June
26
minutes, which also discuss such matters as the "messaging" and
talking points for the UN's phase-out of helicopter flights to the
Delta. The
minutes have it that the government urged that rice be bought outside
of the
country -- the UN, it should be noted, preferred to buy it in-country,
putting
in question Dan Baker's claim that foreign exchange losses were
minimized by
making purchases outside of Myanmar.
Long
after Inner City Press requested basic information
about how much money the UN has exchanged into undervalued FECs, OCHA's
Dawn
Blalock on the morning of July 28 responded that "on the dollar
issue, the UN [Country Team] in Myanmar is working on that and should
have
figure by the end of the week and Mr. Holmes will address the issue
today after
the noon briefing." It shouldn't take this long to get financial
information. But Mr. Holmes will be asked about it, and about the June
26
minutes, at the July 28 UN noon briefing.
UN into Myanmar, size of currency exchange
loss not shown or disclosed
Inner City
Press first raised the issue on June 26 itself, in print and in
questions to
the UN Development Program, which handles UN finances in the field.
UNDP Spokesman
Stephane Dujarric provided a written response that
"UNDP Funds are remitted
into the UNDP US dollar account at Myanmar Foreign Trade Bank. UNDP
Myanmar
exchanges US dollars for Foreign Exchange Certificates at the Bank, and
then
converts these into local currency (Kyat)."
After
that,
in response to Inner City Press' request for how much money UNDP and
the UN
have converted into FEC, UNDP has provided no information. Mr. Dujarric
left a
message that he was going on leave but that his colleagues would
provide the
information. This never took place.
On July 25,
Inner City Press asked UNDP
Administrator Kemal Dervis after he launched an appeal for more
most-emergency
funds if he would answer questions about UNDP's Myanmar operations,
there in
the UN's conference room 4 or in a press conference. "You know I don't
answer questions like this," he said, adding that any press conference
would have to wait until "after the high summer season." There are
indications that UNDP, even prior to Cyclone Nargis, provided larger
cuts to
Myanmar's Than Shwe government than the 25% now admitted to by the UN's
humanitarian operations.
The amount
of
money the UN system has turned over to the Than Shwe government goes
back far
before the cyclone. At UN Headquarters on July 16, Inner City Press
posed
questions to Eric Laroche, now at the World Health Organization, but
previously
the UN's humanitarian coordinator in Somalia, and further back with
UNICEF in
Myanmar. When Inner City Press asked if
Laroche thought it legitimate to accept a low exchange rate from a
government
in order to have access, he stayed silent for a full eight seconds
before
saying, "It's a very difficult question, and a more difficult answer.
It
has to do with principles." Video here,
from Minute 51:46.
Laroche
said that
when he was in the country with UNICEF, auditors were told about the
exchange
rate arrangements with the government. He and his spokesman committed
to
explain how WHO exchanges money in Myanmar, but to date have not done
so. Their
response is expected immanently, and will be covered as this series
progresses.
In
fairness, the UN has now provided to Inner City Press its transcript of
John Holmes' July 24 press conference in Yangon, which has him stating
"yes,
there is an exchange
loss. I’m not sure where that gain goes, it’s hard to be sure. There is
an
issue here, it’s a serious problem because we are losing purchasing
power in
the dollars we are spending. We have raised that with the Govt. I
raised that
with the Govt today, with the Govt ministers, and they have said that
they
understand the problem and will look for a solution, and I hope we can
find a
solution very quickly."
Myanmar's government has
implemented a
temporary fix
or cover-up. It has announced that certain taxes and fees can be paid
with the
Foreign Exchange Certificates it requires that the UN convert dollars
into.
Last week, this temporarily raised to street value of FECs from 880
kyats, the
local currency, to 980 kyats, limiting exchange losses from 25% back to
17%. But
now the spread is back to 21%, with the FEC to kyat exchange rate
sliding back
to 950 to 1, compared to 1180 kyats per dollar.
The
temporary fix or cover-up did not work. Even at its best, is a 17% loss
of aid
funds to the Myanmar government acceptable to donors?
Why were these losses never disclosed while
funds were being raised, including in UN appeals for $200 million and
then,
earlier this month, $300 million more?
Watch this site.
And
this --
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