US embassy cable - 03RANGOON1075

UNCLAS RANGOON 001075 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID, ECON, BM, UNDP, NGO 
SUBJECT: UNDP BURMA'S ANNUAL ASSESSMENT READOUT 
 
 
1. (U)  SUMMARY:  COM and PolOff attended the UNDP,s Annual 
Assessment Mission debriefing for the diplomatic corps on 
August 28 to hear observations of, and recommendations for, 
UNDP,s Burma operations.  The assessment team reported that 
UNDP,s Burma programs have all been properly designed to 
have the intended grassroots impact and are making a 
difference, but expressed concerns that programs will face a 
sustainability challenge in the future.  The team also noted 
there was not the rapid deterioration in rural area living 
conditions as was reported by the previous year's Assessment 
Mission.  The Assessment Mission's official report will be 
available after it is presented to the September UNDP 
Executive Board.   END SUMMARY. 
 
2. (U) Over a nine-day period in late August, a UNDP 
two-person Assessment Mission, Mr. Robert Shaw and Mr. Mirza 
Shafiquer Rahman, randomly sampled township and village-level 
UNDP programs in both the Irrawaddy delta region and in 
eastern Rakhine State.  The mission examined the UNDP,s 
Human Development Initiative ) Level 4 (HDI-4) projects, 
which entails Integrated Community-Based Development in 
2,3000 villages, Community-Based Development in 400 villages, 
micro credit in 1,700 villages, and HIV/AIDS programs. 
 
3. (U) Regarding the micro credit issue, the Assessment 
Mission noted that rural Burma suffers a huge demand for 
rural credit, especially following the 2003 banking crisis. 
UNOPS executes the program and uses the international NGOs 
"PACT" in central Burma and "GRET" in Shan Sate, and a 
subcontracted Indian company in the Delta region.  Village 
money lenders charge 125 percent interest on average, but are 
able to stay in business because the farmers no longer have 
access to government subsidized fertilizer and must borrow to 
buy commercial fertilizer.  Even at such high interest rates, 
there is still a market for money lending since farmers have 
limited or no access to credit. 
 
4. (U) According to UNDP briefers, the January 2003 UNDP 
executive board meeting had discussed the possibility of 
enabling micro credit programs in Burma to achieve 
sustainability by becoming a legal entity.  However, the 
board decided that it isn't appropriate for UNDP to work with 
the GOB on this, leaving current UNDP micro credit 
intervention programs as the only option.  The Assessment 
Mission noted during their debriefing that the micro credit 
program is not sustainable if UNDP can't institutionalize it 
by making it a legal entity in Burma.  Stressing that there 
is a huge demand from the rural areas for more credit, but 
when the UNDP funding ends, there will be no more program. 
 
5. (U) The Assessment Mission also mentioned what they saw as 
problem areas:  Ongoing UNDP program monitoring and 
evaluation can be improved, micro financing is 
undercapitalized, and the Burmese agricultural sector needs 
to be reviewed.  Shaw went on to identify what he termed 
strategic challenges: policy dialogue with the GOB, program 
sustainability, eventual institutionalization of programs, 
and future directions for UNDP in Burma. 
 
6. (U) UNDP Resident Representative Charles Petrie, who 
arrived in Burma to take up duties in July, closed the 
debriefing by saying that he is undertaking a few changes to 
improve the UNDP programs in Burma, including more fully 
using the Analysis and Planning Unit, focusing on replicating 
programs in neighboring townships and villages, and promoting 
partnership between the UN agencies and international NGOs in 
Burma, which UNDP will push with a November Community Based 
Initiative workshop for international NGOs.  He has also 
directed his staff to conduct a living conditions survey as 
well as an agricultural survey that the Assessment Mission 
had recommended. 
 
7. (SBU) The Assessment Mission leader concluded that there 
was not a rapid deterioration in rural area living conditions 
as had been reported by last year's Assessment Mission. 
UNDP Burma's senior staff confided to PolOff that last year, 
the Assessment Mission had focused on a township in the 
Irrawaddy delta ) where the townships villages had been hit 
by serious floods, followed by pestilence, and forced labor 
levies from the local battalion commander during the harvest 
season.   The triple punch was disastrous for the villagers 
and thus skewed that Assessment Mission's country-wide 
conclusions. 
 
8. (U) According to the Assessment Mission, their conclusions 
will be available on the UNDP web site in November or 
December and will be represented at the next UNDP Board 
meeting in the middle of September. 
Martinez