UN in Myanmar Still Losing 20% on Currency Exchange, Asks for More, Problem Widens

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, August 5 -- While the UN in Myanmar has yet to resolve or even minimize the 20%, $10 million currency exchange losses it admitted eight days ago, it is going public with requests for more funds. At the UN's noon briefing on Tuesday, spokesperson Michele Montas quoted UN humanitarian coordinator for Myanmar Dan Baker that $51 million is needed for rice paddies, and that of the UN's July 10 revised appeal, there is a $285 million, or 59%, shortfall. Video here, from Minute 4.

Inner City Press, which back on June 26 first reported on the UN's losses to government-required currency exchange, asked Ms. Montas if the UN is still losing 20% of each dollar spent in Myanmar. "The information you have stands," Ms. Montas said. "I have heard of no changes." Video here, from Minute 12:03.

That each dollar of aid must be converted with Myanmar's military government for a Foreign Exchange Certificate with, now, 80% of the value means that 20% of aid is directly benefiting the regmine led by General Than Shwe. This puts in a different light -- bribery, some call it -- Chevron Corporation's self-described "$1 million cash contribution." $200,000 of that goes to the government, which controls licenses, including of those few money changers which in turn convert the devalued FECs. Other corporate contributors include French oil company Total, Siemens AG and JP Morgan Chase.

On July 28, the UN's John Holmes publicly admitted $10 million of losses and promised both to get to the bottom of it, and at Inner City Press' request to produce a list of other countries in which the UN is losing more than 5% to currency exchange. So far neither has been done.

UN's Holmes and Baker, follow-up to currency exchange loss admission not yet shown

A representative of the UN Development Program telephoned Inner City Press the day after Holmes' public admission, by contrast providing UNDP's answers only on a not for direct attribution basis. He said that the Myanmar government, in order to "control" foreign exchange, licensed a few approved money changers. He jotted down Inner City Press' request for UNDP's pre-cyclone currency exchange losses and a list of other countries in which UNDP is losing 5% or more to currency exchange, but said that UNDP will be relying on and deferring to John Holmes' inquiries in this regard.

Now, however, well-placed UN sources tell Inner City Press that the reason for the delay on making any disclosures, even about Myanmar, is that UNDP demanding a re-do of the numbers, trying to whittle down Holmes' admission of $10 million in losses. The attempt to re-fudge the numbers is being down through the UN Country Team, headed by UNDP's Bishow Parajuli, previously the head of the UN World Food Program in Egypt.

Meanwhile, UNDP has been unable to provide any figures about how much money it has converted in Myanmar, including for a program it calls "Micro-Finance." The spokesman-without-name repeatedly like a mantra, our work is good. But how much was converted and spent? How much money has been and is in UNDP's account with the Myanmar Foreign Trade Bank? There has still been no answer.

Belatedly joining its Western Permanent Five compadres the U.S. and UK, the French Mission to the UN provided Inner City Press with the following response to the scandal:

"Obviously, we are sharing the concerns expressed by John Holmes toward these difficulties. Since the beginning, France has been very engaged in the international effort to hurry assistance to the victims of Cyclone Nargis. Consistent with the principle of the responsibility to protect, we have also urged the Myanmar government to fully allow access of international aid to victims. We pay tribute to the UN involvement to improve the situation. It is obviously crucial that no financial resources dedicated to humanitarian assistance should be wasted, and we therefore support the UN efforts to find a solution to that problem."

But for now the efforts focus on cover-up, and nothing is being done to ensure that the problem doesn't continue, and in countries beyond Myanmar.

On August 5, to try to get answers since UNDP Administrator Kemal Dervis has refused to answer questions or to hold a press conference, Inner City Press attended a meeting of UNDP's Executive Board. After a presentation by UNDP controller Darshak Shah, comments were sought by UNDP from the member states on the Board. Nothing was said about Myanmar or the currency exchange losses. Rather the talk was of boosting UNDP's "direct budget support" to governments, and ensuring "government ownership" of funds. This has been UNDP's priority in Myanmar.

[Since Kemal Dervis does not, as he puts it, "answer questions in the hallway," nor hold press conferences, Inner City Press has formally posed the questions here.]

Similarly, despite a commitment by World Health Organization official Eric Laroche -- previously of UNDP -- to provide a description of WHO's currency exchange practices and losses in Myanmar, no information has yet been provided by WHO, despite reminders to Mr. Laroche's spokesman. Apparently the cover-up mentality of UNDP spreads with its former employees.

Inner City Press asked Ms. Montas when the Holmes-promised list of other countries with currency losses would be provided, and how that would cover UNDP and UN Peacekeeping. Ms. Montas said that Inner City Press will have to ask each agency, even each department, separately. One agency spokesman told Inner City Press that the agency's controller / accounting department might not be tracking currency exchange losses, even now, and that if is such information were being collected, it is not the UN's job to "do research" for Inner City Press. How about making basic disclosure, of losses up to 25% of each aid dollar, to donors? Apparently the UN does not that that is required, either.

The time for semi-proactively disclosing other countries with currency losses is now.