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article imageIn Burma, Foreign Aid Agencies Now Wrestling With Loss Of Funds

By Can Tran     Jul 24, 2008 in World
The situation in Burma after getting hit by Cyclone Nargis is back in the headlines. This time, it has much to do with money issues.
It has been quite a number of weeks since we have last heard the situation of what was going on in Burma since it was struck by the violent Cyclone Nargis back in May. Only a few weeks ago, the United States House of Representatives has made a move to freeze the assets of Burma’s leaders. However, it is highly unlikely that these rounds of sanctions will do anything to hurt Burma’s junta.
Back to the case of Burma itself, the international aid agencies are at risk of losing money that could be used to help those in the Irrawaddy Delta back in May 2. The circumstance with the money loss is quite an interesting one. They have to exchange US dollars into some form of voucher before it is converted into the local currency of the country.
Here’s an example:
US dollars > voucher nicknamed as “Monopoly money” or “Play money” > local currency.
There is pretty much a middle man. It is not the US dollar gets automatically exchanged into the local currency. But, the returns are one-fifth below the exchange rate. That would mean that the international aid agencies are getting screwed out of some serious dough. The money that has been lost could have been used to really help the victims of Cyclone Nargis.
It is highly unlikely that China would do the same time. After all, China’s government even took the initiative to help pay for its own reconstruction when getting hit by the devastating Sichuan earthquake.
Instead of US dollars being automatically exchanged for Burmese kyats, the aid agencies have to exchange US dollars for FECs or “foreign exchange certificates.” The screw-job comes in when the FECs are exchanged for kyats. The kyats received are below the normal market rate.
In a nutshell, foreign aid agencies are getting screwed out of funds needed to help the victims of Cyclone Nargis. On top of that, we donate money to such agencies so they can continue their charitable work.
This is the newest problem in regards to Burma.
Yes, there are foreign aid agencies that do get government assistance. The government assistance comes out of our tax dollars. At the same time, there are many that donate to such agencies.
There goes our donations and there goes our taxpayer dollars.
However, the most important questions that need to be asked would be:
What happens to the missing cash?
Where does the missing cash eventually end up?
How much money ended up getting lost in the process?
More about Burma, Myanmar, Cyclone nargis
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