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UN Admits Currency Losses in Myanmar,
Won't Say How Much Lost or Why It Was Denied
Byline: Matthew Russell Lee of
Inner City Press at the UN: News Analysis
UNITED NATIONS,
July 24, updated July 25 -- The UN on Thursday
acknowledged serious "exchange losses" to the government of
Myanmar's
requirement that each dollar of aid be converted into a Foreign
Exchange Certificate and only then to local currency, Kyat. Four weeks
after
Inner City Press first exclusively reported on the issue,
and one week after UN
Under Secretary General John
Holmes told Inner City Press he would look into
the issue during this trip this week to Myanmar, Holmes in Yangon said
"this
is an extraordinary exchange loss, and where that gain goes I'm not
sure."
In New
York, Inner
City Press asked Secretary-General Ban Ki-moon's
spokesperson Michele Montas to confirm Holmes'
quote, and to state just how much
money the UN has converted and lost. Ms. Montas replied that "the Under
Secretary General acknowledged losses, saying that donors are
concerned,
because the losses mean that less services can be purchased. She said
Holmes has
raised the issue to the government, which said it will "find a way to
resolve" but that there is "no further information given by the
government at this time." Video here,
from Minute 14:19.
The
Germany press agency DPA,
which correctly cited Inner City Press for the story (but incorrectly
called it "Inter" City Press),
noted that despite the formation by the UN, the Myanmar government and
the Association
of South-East Asian Nations, ASEAN, of a tri-partite mechanism which
most
recently put amount needed for post Cyclone Nargis reconstruction at $1
billion, "the exchange problem was not revealed." Worse,
the UN's humanitarian coordinator
Daniel B. Baker, when asked on-camera by Inner City Press on July 10 if
the Un
was losing money on currency exchange, said "we buy kyats at the market
rate using dollars" and that "the government has not benefited."
Video here,
from Minute 46:20.
But
now that the dollars that the UN
has been exchanging for Foreign Exchange Certificates with the Myanmar
Foreign
Trade Bank are worth 1180 kyats, while the Foreign Exchange
Certificates yield
only 880, it is clear that the hard currency dollars the Myanmar
government is
received are worth 25% more than what the UN can buy with the FECs the
UN
receives in return.
Sir John Holmes with UN logo,
now-admitted currency loss in Myanmar not yet quantified
While Holmes said "where
that gain goes I'm not
sure," it seems clear that the gain goes to the government, through the
dollars they receive in exchange for lesser-valued kyat. It is also
hard to
accept that the UN cannot state how much it has converted in Myanmar in
this
way since the cyclone. Ms. Montas told
Inner City Press to "ask Mr. Holmes on Monday when he will be back"
at UN Headquarters.
Footnotes: Inner
City Press asked the Ambassadors
to the UN of both the U.S. and Vietnam, because they were the two
Ambassadors
to address the media at the Security Council stakeout on Thursday
afternoon, to
comment on the UN's currency exchange losses in Myanmar.
Le Luong Minh, the Ambassador of Vietnam
which is also an ASEAN member, said that only those "on the ground"
could answer about this. Video here.
He talked over Inner City Press' questions about
the on-the-ground UN Development Program, which weeks ago told Inner
City Press
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."
Despite
promises of further answers about how much value is lost comparing the
kyat
value of dollars to the FECs the government gives to UNDP, no further
answer has
been received from UNDP. Its spokesman went on leave, it's true, but no
other
UNDP staffer, as was promised, has provided any information. If this is
not
stonewalling, what is it? In light of John Holmes acknowledgement of
losses,
UNDP should be required to provide the value of its conversions and how
much
was lost.
With U.S. Amb.
Khalilzad at the stakeout at five
o'clock, video here
--
Inner City Press: On Myanmar, John Holmes
the Humanitarian Coordinator today has acknowledged that the UN in
exchanging
funds, money, dollars, with the Myanmar government was losing, he
called it a
serious amount of funds and it turns out to be about 25% in terms of
currency
exchange that went straight to the government. One, what does the US
think
about this use of funds and two, is that one of the things that the US
government or others would ask the government to waive during a time of
humanitarian crisis?
Ambassador Khalilzad: Well we
want obviously for the government in any of these circumstances, you've
heard
us speak about Zimbabwe earlier, to do nothing that depletes the supply
of
humanitarian assistance whether it is a natural or man made
humanitarian
crisis. So that will be my generic response. But with regard to your
specific
reference to what Mr. Holmes has said, I have not seen he has said and
I will
have get back to you on that.
Five hours earlier at the UN's noon briefing, the following from the transcript
--
Inner City Press: Michele, you
gave this readout of John Holmes
from Myanmar. But he’s given,
apparently, an interview there -- the German News Agency DPA
quotes John Holmes
as acknowledging losses of millions of dollars on foreign exchange to
the
Myanmar Government and saying this is an "extraordinary loss and where
that
gain goes, I am not sure." Since it's an interview in another media,
that
one, to get confirmation that that's what he said, and two, to find out
how
much, now that he has acknowledged this, how much money since Cyclone
Nargis
did the UN convert through foreign exchange certificates in Myanmar and
how
much is all this, acknowledging the loss, worth?
Spokesperson Montas: I don't
have the exact number, but the
Under Secretary General acknowledged that this is a serious issue. There are losses which are implicit in the
gap between the street rate and the official foreign exchange
certificate
rate. Aid agencies and donors alike are
concerned about this issue, because fewer services then can be
purchased. The issue was raised by Mr.
Holmes at a
meeting with the Government. They
understood the problem and they will find a way to resolve it, though
no
further details have been given by the Government at this time. So this is what I have in terms of the
foreign exchange rate. As you know, any
international agency has to abide by the foreign exchange rules that
exist in a
specific country.
Inner City Press: I think you
were here when Dan Baker was here and they did the flash appeal. At that time they said they were unaware of
any losses and that they thought it fluctuated, they would not even be
losing
anything. So, I am wondering, maybe it’s
clearly a question for Mr. Baker, but if this has been going on since
the
cyclone, how could they either not know or not acknowledge then that
they knew? See what I mean?
Spokesperson Montas: Actually,
you will get a chance to ask Mr.
Holmes when he comes in. He will be in
on Monday.
Watch this site.
And
this --
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