Cablegate: Burma: Unodc Cash Flow Woes

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 RANGOON 000605

SIPDIS

SENSITIVE

STATE FOR EAP AND INL; DEA FOR OF, OFF;
USPACOM FOR FPA

E.O. 12958: N/A
TAGS: SNAR KCRM PREL EAGR BM
SUBJECT: BURMA: UNODC CASH FLOW WOES

REF: A. RANGOON 148
B. RANGOON 138 AND PREVIOUS

1. (SBU) Summary: UNODC-Burma says it is strapped for funding
and may need to reduce counterdrug activities as of August.
Prospects for 2006 funding are solid, but UNODC is seeking an
additional $400,000 for its next illicit crop survey. We
recommend support for several UNODC projects in FY2006 to
address our counternarcotics objectives in Burma and to
ensure continued U.S. influence in UNODC programming. The
UNODC's crop survey, in particular, has taken on added
importance following the cancellation this year, and
uncertainty for next year, of the annual joint U.S.-Burma
opium yield survey. End Summary.

2. (U) Rangoon's mini-Dublin Group convened on May 12 to
discuss the group's annual report as well as related
counternarcotics activities. Representatives from UNODC and
from the embassies of Australia (current chair), France,
Germany, Italy, Japan, the U.K., and the United States
participated and several IO/NGO representatives made special
presentations.

BACK TO FULL STRENGTH IN WA TERRITORY....

3. (U) UNODC representative Jean-Luc Lemahieu gave an update
on the nascent Kokang and Wa Initiative (KOWI) and observed
that donor funding was "solid" for Phase I, primarily a food
and humanitarian response for former poppy farmers. He noted
concerns that farmers could evolve from "poppy dependency to
aid dependency" and UNODC therefore was focusing on
developing Phases II and III which will place greater
emphasis on sustainable alternative development.

4. (U) Lemahieu recapped that, following the unsealing of
U.S. federal court indictments against UWSA leadership, GOB
officials had required that UNODC temporarily withdraw staff
from Wa territory (ref B). This resulted, he said, in a
ten-day suspension in February of UNODC programs. However,
local-hire staff quickly returned and resumed programs. The
GOB permitted expatriate staff to return to Wa territory in
early April and, he said, UNODC and its NGO partners are now
"back to full strength" in the field.

....BUT PERHAPS NOT FOR LONG

5. (U) According to Lemahieu, UNODC is severely strapped for
funding. The Burma program, he said, will run out of "cash
flow" in August and, in the absence of new funds to cover a
$400,000 shortfall, UNODC will not be able to facilitate all
of its field programs. For the period August-December,
Lemahieu said he would only be able to operate with a limited
staff and greatly reduced activities.

6. (U) Lemahieu added that the current UNODC poppy survey is
not in jeopardy (although he needs $400,000 for next year)
and that the overall funding prospects for 2006 "look much
better," including potential Swedish support ($4.5 million)
for a joint poverty reduction program with UNDP as well as UN
security funds from Japan that would allow a continued UNODC
presence in Wa territory beyond the UWSA's 2005 ban on poppy
cultivation. Lemahieu concluded that UNODC plans to
transition out of its Wa programs in January 2008, handing
over the leading UN role in the region to UNDP.

7. (U) A WFP representative reviewed his organization's
one-year emergency food program for former poppy farmers in
northern Shan State. He said that if the UNODC-led KOWI
program succeeds, the food emergency should be less severe in
coming years, but that food insecurity would continue. In
the face of GOB restrictions on the transport of rice into
the region, and in the absence of serious economic reform,
the market response to food needs remains highly inadequate.

USG ADJUSTMENTS

8. (U) Emboff described ongoing USG support for counter-drug
programs and general U.S. recognition of the success of
alternative developments projects. He informed group members
that, following the indictments of UWSA leaders, the U.S. had
reprogrammed $432,685 from UNODC's Wa project to UNODC
general purpose funds (ref A). This action, he noted, was a
conclusion that the indictments rendered financial support in
the region untenable and was not a negative comment on UNODC
programs. In fact, the reprogrammed funds remained available
for other UNODC programs in Burma and $133,700 had already
been obligated to cover a shortfall in UNODC's illicit crop
monitoring project.
COMMENT: VALUE ADDED

9. (SBU) The withdrawal of U.S. support for the UNODC's Wa
Project was appropriate; however, we believe there is high
value in several of UNODC's other Burma programs. U.S.
support in FY2006 for UNODC's demand reduction project
(MYA/E76) and illicit crop monitoring (MYA/G43) would in
particular address our overall counternarcotics objectives in
Burma and ensure that we continue to be a donor with
substantial influence in UNODC programming. The UNODC's crop
monitoring project has taken on added importance following
the cancellation this year of the joint U.S.-Burma opium
yield survey (due to a lack of GOB cooperation). The results
of the 2006 UN poppy survey will be essential in evaluating
the effectiveness of the Wa poppy ban, scheduled to go into
effect next month. End Comment.

Martinez

© Scoop Media