Foreign governments act to recover missing aid millions

Parliamentarians from several countries, including Britain, are reported to be planning a joint initiative to demand reimbursement by Burma's ruling junta of tens of millions of dollars creamed off cyclone relief funds, writes Edward Loxton for The First Post.

The UN, under intense questioning, has admitted that a fund set up to finance relief for victims of Cyclone Nargis in May 'lost' up to 20 per cent of its true value because of a currency exchange scam operated by Burma's ruling generals.

As reported here on July 25, the Burmese government requires payments of dollars and other major foreign currencies entering the country to be converted into so-called Foreign Exchange Certificates, or FECs, which then buy Burmese kyat. The foreign currency is exchanged into FECs at a rate of 880 to the dollar, although the true exchange rate is about 1,200 Burmese kyat to the dollar - meaning that up to 30 per cent of relief funds reaching Burma in the form of dollars has 'disappeared'.

"This is an extraordinary exchange loss," said a top UN aid official, John Holmes, Under Secretary General for Humanitarian Affairs, after a visit to Rangoon.

According to the New York media watchdog group Inner City Press, the UN has known for some time about the Burmese scam but has kept quiet about it. Parliamentarians from several countries were now organising an initiative to recover the money from the Burmese junta, UN sources said.

The UN appealed for nearly $500m for the Burma cyclone relief fund, and has so far raised nearly $200m. Britain's Disaster Emergency Committee raised more than $20m for cyclone relief - $6m of which has presumably ended up in the junta's coffers. Even Queen Elizabeth is reliably reported to have made a 'significant' contribution.

FIRST POSTED AUGUST 4, 2008