New Delhi (Relief Web)- Even as cyclone victims reel under the devastating impact of Nargis, the military rulers are lining their pockets from the aid funds donated by the international community including the UN. The money is being made by way of a twisted currency exchange mechanism – dollar to local Burmese kyat, a source in the Burmese military establishment said.
Following the killer Cyclone Nargis lashing Burma on May 2 and 3, several international non-governmental organizations as well as UN aid agencies rushed in to help cyclone victims.
The source, who declined to be named for fear of reprisal, said the ruling junta is making a huge killing from these donations by keeping a margin in the conversion rates – from foreign currency to Burmese Foreign Exchange Certificates (FEC).
According to the source, the government-owned Myanmar Foreign Trade Bank is the principle bank that is used by aid agencies for transferring funds. And when aid agencies withdraw their money from the MFTB, it is given in the form of Foreign Exchange Certificates (FEC), which is treated as equivalent to the US dollar.
While the information cannot be independently verified, the source said the difference in exchange rates between the dollar and FEC is the margin that the government makes.
A businessman in Rangoon, who is into exchanging foreign currency in the black market said, currently a US $ is worth 1,175 Kyat while the FEC is valued at 850 Kyat. While the rates continue to fluctuate depending on the market, the US Dollar and FEC have never been treated equally in the market.
"The rate between the FEC and Dollar is only equal in the government exchange rates but here in Burma things are done only in the black market," the businessman told Mizzima.
The source, who is also close to the Myanmar Foreign Trade Bank, said, while the bank retains the in coming foreign exchange, it also profits from the marginal difference in the conversion.
The UN World Food Programme, one of the largest UN agencies currently involved in helping cyclone victims in Burma, however, declined to comment on it.
But Paul Risley, the WFP spokesperson in Bangkok admitted that it uses the MFBT to transfer funds to Burma.
UN Humanitarian Chief, John Holmes, who is scheduled to visit Burma next week, on Wednesday, told reporters at a news conference in New York that he would look into the issue of aid money going into the coffers of the ruling junta through a twisted currency exchange mechanism.
But reports quoted him as saying, "My impression from what I heard is that there is not a significant problem. There may be moments when the difference between the dollar and FEC is significant, but by and large it is not."
The source, however, said the Burmese military generals have made millions of Kyat from the exchange margin.
"For every dollar, if the junta is profiting about two to three hundred Kyats, you can imagine how much they will have pocketed since aid agencies made their way into Burma," the source said.
Burma's military junta has asked for US $ 11 billion in aid for emergency relief as well as for reconstruction work to be done in cyclone hit areas of Irrawaddy and Rangoon division.
The regime, in an article carried in its mouthpiece newspaper early this month, even challenged the international community particularly the US, UK, French, and Japan for failing to come up with more donations to help cyclone victims in Burma while spending huge amounts of money on wars.
The UN, last week, launched a fresh appeal urging governments to donate US$ 300 million more to keep humanitarian efforts in Burma going.