Take an Obama Break - and Check Up On the UN’s “Burma Shave”

by Claudia Rosett

If ringing rhetoric and nifty stage-sets could save the world, there’d be no problem about changing our national anthem — Yes, we can! — to ”Kumbayah.” But global reality comes crammed with more than serial exclusive TV interviews and 200,000 happy Germans snacking on bratwurst. There are also tyrants, terrorists, schemers, crooks and con men, whose take on citizens-of-the-world exhorting enraptured crowds to ”stand as one” is that it’s an excellent opening for all sorts of thuggery.

Take Burma. While Barack Obama has been touring 8 countries in 9 days, refining a foreign policy based on the spontaneous coming-together of the world (or was it the “planet?”), a sordid tale has been oozing out of Burma — with almost no attention from the American mainstream media. In this case, the change-seekers are the members of Burma’s brutally repressive junta, led by Than Shwe. And the change they’ve been seeking — and getting — is hard-cash foreign exchange, skimmed out of the massive United Nations relief operation for victims of the cyclone that hit Burma in May.

How has Burma’s junta been managing this racket? In brief, by requiring the UN to change hard-currency into Burmese currency, the kyat, at lousy, below-market rates — with the Burmese regime pocketing as much as 25% of every dollar exchanged.

This tale only came to light thanks to the intrepid efforts of the small but feisty Inner-City Press, whose UN-based reporter, Matthew Russell Lee, in a series of articles over the past few weeks, has dubbed the scandal “Burma Shave.” Back in June, Lee began asking the unsexy but hugely important question of what exchange rate the UN was getting from Burmese authorities for relief funds spent in local currency inside Burma. Following the usual pattern of UN scandal, the UN’s first response was no answer at all, except that someone would look into it. A fortnight later, having pressed the question again, Lee was assured there were no “dodgy deals.” He kept digging. Last week the UN finally admitted to going along with a Burmese government dodge involving the UN purchase at inflated rates of “Foreign Exchange Certificates” which the Burmese government requires in order to buy Burmese kyat.

So, while the UN has been collecting hundreds of millions in emergency funding for Burma’s cyclone victims, how much of that money has the UN been forking over to the Burmese junta in hard cash? (Hey, this is the UN. What matters is that donors stand as one to give money; not where the money goes). As Lee reported this past weekend, it’s still unclear what the numbers really are — though with the de facto exchange fees ranging from about 17% to 25%, the transfer of UN relief funds to Burmese junta coffers has likely been on a scale of millions. Lee asks a very good question: “Why were these losses never disclosed while funds were being raised, including in UN appeals for $200 million and then, earlier this month, $300 million more?”

While Inner-City has been trying to extrude information about this scam from UN officials, the UN has been busy bemoaning a funding crunch for its relief efforts in Burma (the Burma Shave foreign-exchange scam gets a brief mention way down in the final paragraph of this July 25th article in The Christian Science Monitor).

So, what’s just happened here? Burma is hit by a terrible cyclone, with vast devastation, including an estimated 140,000 or so people dead. The reason the Burmese are so especially vulnerable is that the country is kept miserably poor under the boot of one of the world’s worst governments — the same regime that last fall slaughtered peacefully protesting monks. To help the cyclone victims, the UN raises hundreds of millions in aid from generous donors. UN Secretary-General Ban Ki-Moon makes a personal visit to Burma, where he says, “The whole world is trying to help Myanmar.” He sits down to talk with high-ranking officials, including the head of the junta, Than Shwe. From that meeting, Ban emerges to say, as reported by the UN public information office, that “substantive progress was made on all critical issues at hand regarding humanitarian assistance to Myanmar… .”

And now we learn — thanks not to the UN, or the MSM, but to the internet-based Inner-City Press — that in this coming-together and talking-to-dictators relief operation, the Burmese junta, dignified by a personal visit and happy words from the UN Secretary-General, buoyed up by a tide of relief money and goods from abroad, has been pocketing one heck of a lot of change. As with Oil-for-Food in Saddam Hussein’s Iraq, Cash-for-Kim in North Korea, aid to Robert Mugabe’s Zimbabwe, funds to Gaza under Hamas … it’s an approach that helps keep Burma under the jackboot, while the world, standing as one, coming together, don’t-bother-us-with-realities, sings kumbayah. Yes, they can.