IRIN
MYANMAR: Government cuts currency red tape for donors?
4 September 2008


YANGON, 4 September 2008 (IRIN) - The UN is calling on donors to give 
more generously to an international appeal for victims of Cyclone 
Nargis, and a senior official says donors are now getting a fair 
exchange rate.

On 10 July, the UN re-launched a flash appeal on behalf of 13 UN 
organisations and 23 NGOs for emergency relief and early recovery 
efforts through to April 2009 for a total of US$481 million, up from a 
previous appeal of $201 million. But so far that remains just 41 percent 
funded. Donor reluctance was blamed by humanitarian officials in part on 
transaction fees and poor exchange rates for incoming hard currency.

"Now is the time for donors to step up to the plate," Daniel Baker, the 
UN Humanitarian Coordinator to Myanmar, told IRIN on 3 September in 
Yangon, the former Burmese capital, reassuring donors that earlier 
problems over foreign exchange rate differentials had been resolved.

"This issue has been taken fully on board by the government. Donors 
should feel confident that they are getting the best value for their 
money.

"The loss in value due to foreign exchange for the Cyclone Nargis 
international humanitarian aid during the last three months has been 
about $1.56 million," Baker had said on 13 August, in a joint statement 
by the UN, Myanmar's government and the Association of Southeast Asian 
Nations (ASEAN).

"We are not getting the full value of dollars donated for emergency 
relief, and donors are extremely worried and keen to see that this issue 
is resolved," he said at the time. The issue was first raised at the end 
of July by the UN Under-Secretary-General for Humanitarian Affairs, John 
Holmes, and stems from Myanmar's restrictions on the use and exchange of 
foreign currency.

When the UN brings dollars into the country, it received so-called 
Foreign Exchange Certificates (FEC), which can be used to buy local 
currency. The FECs can be converted into the kyat, but they were being 
changed at a rate of about 900 kyats to one, or 20 percent less than the 
current exchange rate of close to 1,200 kyats for one dollar.

"That rate can be either higher or lower than the current market rate," 
Baker clarified.

To address this, the government has agreed to allow foreign donors to 
pay local vendors directly and in dollars, rather than through FECs, an 
option that had also carried a 10 percent government transaction fee.

The government has since agreed to waive this fee for all international 
humanitarian agencies providing cyclone assistance, including the UN, 
bilateral and international NGOs.

The Minister for National Planning and Economic Development U Soe Tha 
said such issues could always be brought to the government's attention.

"Effective assistance to the Nargis-affected population is our common 
goal and we certainly have the intention to continue addressing any 
issues as they arise," he said.

According to the Post-Nargis Joint Assessment (PONJA) report in July, 
about $1 billion would be needed over three years to help affected 
communities and households meet food, livelihoods, housing, education, 
and other needs. The report, compiled by the UN, the Myanmar government 
and ASEAN is based on detailed surveys of more than 390 affected 
villages in June.


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Appropriate Donations for International Disaster/Humanitarian Needs
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Center for International              web: www.cidi.org
.  Disaster Information          listserv: www.cidi.org/listsub.htm
.                              guidelines: www.cidi.org/donate.htm
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Myanmar: Cyclone Nargis           www.cidi.org/incident/myanmar-08e