After appeasing North Korea, United Nations in bed with another dictator. Is it Ban Ki-moon or the UN system itself the problem ?

After Matthew Lee of Inner-City-Press discovered last month that United Nations Agencies, and more precisely UNDP in Myanmar was in cohutz with Junta and was closing an eye on millions of dollars being diverted thru a simple exchange machinery, now UN officials are finally admitting it.

After 4 months of operations in Myanmar, and after 308 Million Dollars spent there, OCHA expressed concerns today that: - "Myanmar’s military leaders are pocketing at least one-fifth of the cash earmarked for victims of Cyclone Nargis by requiring international aid agencies to use an expensive system of changing currency".

Holmes, who first denied to inner-City-Press the loss, expressed “serious concern” over missing money after it emerged that as much as 20 per cent of relief funds were being lost through a costly exchange rate mechanism. He said he raised the issue with top junta officials in the capital, Naypyidaw, during his visit this week to assess the effect of relief efforts after the catastrophe, which killed 140,000 in May.

“At the moment, we don’t have a figure for how much money has been lost,” said Dawn Blalock, an official in Mr Holmes’s Office for the Coordination of Humanitarian Affairs (Ocha).

“All the aid agencies that are working within Myanmar operate within the same system. We have to work within the foreign exchange rules and regulations of a sovereign country,” she said.

All the times when UN is caught in doing "wrong" favors to dictators, the excuse is "everyone does it". (do you remember North Korea??)

Foreign currency brought in to Myanmar by aid agencies must first be changed into government-issued foreign exchange certificates (FECs) before it can then be converted into the local currency, kyat.

Officially, one FEC is worth the same as US$1 (Dh3.67). But, in reality, they trade for only about 80 cents of every dollar they represent, meaning conversion costs for the aid agencies run at about 20 per cent – massively higher than in conventional exchange systems.

Meanwhile amids all this scandal, the United Nations has the guts to demand more CASH to assist the more than two million survivors of Nargis, the most devastating cyclone in Myanmar’s recorded history.

Seems that after lying on North Korea's operations, now Ban Ki-moon is finally acknowledging that an unstated amount of money has been changed into kyats to buy supplies and pay the wages of locally hired staff.

The proportion of cash passing through the currency exchange system is expected to increase as the United Nations Development Programme (UNDP) focuses more heavily on reconstruction efforts and follow an established pattern of acquiring supplies locally to assist economic recovery.

Mr Holmes has estimated that relief work will continue in the affected Irrawaddy Delta region for at least six more months, while recovery and reconstruction efforts will not be completed until April next year.

The missing money also comes at a time when Mr Holmes has been encouraging the UAE and other oil-rich Gulf countries to provide more aid and assistance through Ocha and other such aid systems.

UN aid chiefs have criticised Gulf philanthropists for providing aid on a country-to-country basis, while many Arabian aid-givers express concern over whether agencies like Ocha lose too much relief cash in unnecessary overheads.