Cyclone Nargis killed more than 140,000

NEW YORK – As much as $10 million of United Nations relief funds designated for Burma in the wake of Cyclone Nargis have been siphoned off by “private money exchangers” and the military government, according to a U.N. official.

The U.N. called for an initial $200 million in emergency aid in response to the storm, which killed more than 140,000 people, but not all the promised funds are reaching the intended destination, admitted John Holmes, under-secretary general for humanitarian affairs and the U.N. emergency relief coordinator, at a news conference at the agency’s New York headquarters.

The funds are being siphoned through an exchange-rate scam that forces the U.N. to buy the Burmese currency, the kyat, at above the market rate.

Holmes confessed, “We were arguably a bit slow to recognize … how serious a problem this has become for us.”

The U.S. government has made a $39 million contribution to the relief effort and is expected to give more.

Much of the initial aid consisted of goods supplied directly to the victims of the cyclone, but Holmes estimated as much as $10 million dollars has been lost.

The Burma government requires the purchase of a “foreign exchange certificate” effectively taking between 15 percent to 25 percent of every dollar spent on aid to the cyclone victims.

“It’s a very complicated system,” said the U.N. coordinator, who recently toured Burma, where he cited “significant progress” in the relief effort.

The official rate for the kyat is 1,100 per dollar, but the U.N. rate is about 880, according to the Inner City Press, a newssite that broke the exchange scandal.

Holmes said the U.N. was initially, “not aware of the extent of the loss,” but insisted to WND that access to the people of Burma was worth the cover charge the Burma government required for entry into the country.

“Our priority is to get aid to the people,” Holmes said. “This has to be a needs-based operation and not based on politics.”

Although many governments have responded to the worldwide appeal for international aid to the cyclone victims, private individuals and organizations have been the biggest contributors and may be the biggest losers.

The Bill and Melinda Gates charity donated an estimated $3 million for relief in Burma “so they can go in there and help as quickly as possible,” Gates told the Associated Press in an interview in May.

After the initial appeal for aid in May raised most of the $200 million requested, another appeal for an additional $280 million was made. The “extraordinary exchange losses” were not mentioned in the appeal.

Holmes said the U.N. did not bring up the issue of the exchange rate losses in the appeal, because officials “were not aware of the extent of the loss.”

“No reason not to be transparent about this, we haven’t tried to conceal it,” Holmes said.

The Burma government was initially reluctant to accept international aid and workers from the U.N. and non-governmental organizations, but conceded due to the enormity of the disaster. An estimated 2.4 million people are affected.

There are approximately 100 foreign relief workers in Burma, Holmes said.

“Unfortunately, members of the international press are not allowed to enter Burma,” he added.

The Burma government has not responded to calls to exclude foreign relief aid from the foreign exchange certificate requirement. But Holmes rejected setting currency exchange conditions to the flow of international aid in Burma or in future relief aid efforts.

Yesterday, President Bush signed the Tom Lantos Block Burmese Jade Act of 2008, a sanction against the import of Burmese precious gems.

Bush has aggressively criticized Burma on human rights, but Russia and China have expressly blocked efforts to approve resolutions through the U.N. Security Council.

First Lady Laura Bush has publicly called for the unconditional release of Nobel laureate and opposition leader Aung San Suu Kyi, who has been under house arrest for 12 years.

Bush said in a ceremony at the Oval Office in the presence of Tom Lantos’ widow, “I’m going to sign a piece of legislation and a joint resolution that will continue some sanctions, propose new sanctions, and extend the import restrictions. On the Burmese regime, our message is: The United States believes in democracy and freedom.”


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