Dec 3, 2009 (DVB), Aid given by the United Nations to malnourished villagers in Burma's northwestern Chin and Kachin states may be coming in the form of repayable loans, an investigation has found.
Moreover, in some cases the loans are allegedly tied to a 200 percent rate of interest on repayment, according to Christian Solidarity Worldwide (CSW) and the Humanitarian Aid Relief Trust (HART).
Chin state is currently suffering from an acute food crisis, due largely to a mass rodent infestation which is destroying farmland and food supplies. A joint CSW-HART delegation has recently visited the India-Burma border near to Kachin and Chin states.
The delegation was told by representatives of the Chin Famine Emergency Relief Committee that in at least 17 villages in Paletwa township, the worst affected part of Chin state, the local UN Development Programme (UNDP) has distributed international funds in the form of loans, instead of providing food aid.
"Villagers claim they have been told they must repay twice the amount they are given, either in cash or in rice bags", said a statement released by the group.
Aye Lwin, from the Community Development for Remote Township Project, a subsection of the UNDP in Burma, told DVB today that UNDP officials had spoken with community leaders in several of the townships in Chin state and would be preparing an official report.
The UNDP is operating two food aid programmes in the region; a "rice assistance programme" and a "rice bank activity", he said. For the latter "the villagers need to pay back the rice. This is our regular programme".
He denied however that the UNDP had set the interest rate cited in the CSW/HART report.
"The UNDP never set up the interest rate. For the rice bank activity, interest rates are basically set by the village community; all the village members," he said.
"They organize a meeting and they discuss the activity and they try to agree on the rules and regulations, including the interest rates."
He added that from UNDP observations, the interest rates agreed by the community were generally between 30 and 50 percent. "The 100 to 200 percent figure is the market price increase, not the UNDP's," he said.
"The UNDP's purpose is just to facilitate the community; we never dictate or influence the community to do this or do that. The decision maker is basically the community members."
Baroness Caroline Cox, chief executive of HART, who led the delegation to the region, said that if reports of aid being loaned were true, then it would call into question the legitimacy of aid provided by governments.
"The whole thing seems extraordinary; that food aid given by the British governments or other organizations is made into a loan at all," she said.
She added that a lot of the communities in the region were yet to receive any food aid despite money being made available for them.
Moreover, because of the inaccessibility of the region from Rangoon, "we urge everyone to allow cross-border aid from India to reach these inaccessible places," she said.
Reporting by Francis Wade