BAN KI-MOON SAYS 25% OF CYCLONE AID LOST

BANGKOK, Thailand -- A UN official says as much as 25 per cent of cyclone relief aid in Myanmar is being lost because of the military government's foreign exchange system.

Dan Baker, the UN humanitarian co-ordinator for Myanmar, says he is concerned that the losses could upset donors who have already shown a reluctance to fund the relief effort.

Baker says "This is a big issue. This is a big concern."

The government says the May 2-3 cyclone killed 84,537 people.

Myanmar requires that foreign aid money be converted first into foreign exchange certificates at a set price, and then into the country's national currency, the kyat.

The certificates have been worth as much as 25 per cent less than the market value of an equivalent number of U. S. dollars.

On Friday, a certificate costing $1 was worth 900 kyat while $1 on the open market fetched 1,175 kyat.

The certificates were introduced by the military junta in 1993 to counter a thriving black market and take advantage of a rise in tourism dollars coming into the country.

But the black market has remained popular for most citizens because the official exchange rate remains artificially low.

Baker said the UN has taken up the issue with Myanmar authorities and has argued for the elimination of the certificates.

The UN has raised about $191 million so far following an initial appeal for $201 million in aid. On top of the $10 million shortfall, it says it needs $280 million in additional money for the work of 13 UN agencies and 23 non-governmental organizations.

The money is intended to help the 2.4 million survivors who the UN says have been seriously affected by the cyclone.