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UNITED NATIONS | Burma is forcing U.N. aid agencies to convert cash to local currency at below-market rates, costing the world body $10 million so far and drawing comparisons to the scandal-plagued U.N. oil-for-food program in Iraq.
Unlike with Iraq, however, U.N. officials disclosed the problem with aid to Burma pre-emptively, just days after top humanitarian official John Holmes returned from a visit to the stricken nation.
Mr. Holmes put U.N. losses at about $10 million on currency exchanges and said he raised the issue with Burmese officials last week.
"They understood this was a problem. But we haven't got a solution yet," he told reporters at U.N. headquarters in New York on Monday.
The U.N. is required to purchase Foreign Exchange Certificates issued by the Burmese government, with a nominal value of $1. The certificates then are exchanged for the local currency, the kyat, at rates set by the government.
Mr. Holmes, the U.N. undersecretary-general for the Coordination of Humanitarian Affairs, said he did not know why the value of the certificates had fallen, nor would he say that the government is profiting by the system.
On the open market, a dollar is worth about 1,100 kyat, but the rate available to the United Nations had recently fallen to about 880 cents, according to Inner City Press, an Internet-based news agency that covers the United Nations and first disclosed the problem.
About 140,000 people were dead or missing after Cyclone Nargis struck Burma's fertile and populated Irrawaddy Delta on May 2.
Suzanne DiMaggio, an official with the Asia Society, said the currency issue would damage efforts to raise additional relief.
"The trust issue is serious, and until it's rectified, I don't see any rush to donate to this cause," Miss DiMaggio said.
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