US embassy cable - 05RANGOON909

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 000909 
 
SIPDIS 
 
STATE FOR EAP/BCLTV; PACOM FOR FPA 
 
E.O. 12958: DECL: 08/04/2015 
TAGS: PGOV, PHUM, PREL, EAID, EAGR, BM, NGO 
SUBJECT: WFP CHIEF REVEALS GOB SKIMMING DURING BURMA VISIT 
 
REF: RANGOON 904 
 
Classified By: CDA, a.i. Karl E. Stoltz for Reasons 1.4 (b,d) 
 
1. (C) SUMMARY: WFP Executive Director James Morris, the UN's 
most senior visitor to Burma in over a year, told Rangoon 
donor missions that, unbeknownst to WFP, the GOB has been 
levying a 10% "export tax" on all commodities that WFP 
purchases in country for its feeding programs.  Morris was 
angry at media reports that falsely claimed he was carrying a 
"secret message" to the Burmese regime from the UNSYG. 
During his 4-day visit, he visited project sites, conferred 
with ethnic leaders and the NLD, and met with PM Soe Win. 
END SUMMARY. 
 
UPSET BY FALSE MEDIA REPORTS 
 
2. (C) Executive Director of World Food Program (WFP), James 
Morris, visited Burma August 1-4.  He is the highest-ranking 
U.N. official to visit Burma since the UNSYG's Special Envoy 
Razali visited in March 2004.  In a briefing to donors before 
his departure, he took strong exception to media reports that 
he was carrying a "secret message" from U.N. Secretary 
General Kofi Annan to the SPDC.  Characterizing a report by a 
Bangkok-based journalist as "dishonest and reprehensible," he 
said he had never met the reporter and that his visit was 
purely for program purposes. 
 
3. (U) Morris visited a WFP project site at Pakokku Township 
in Magway Division (central Burma) and had praise for WFP's 
Burma country team that works in very difficult 
circumstances.  He said he was not able to visit WFP's large 
food-for-work program for former poppy growers in Shan State 
because of time constraints (reftel). 
 
BRIEFING THE NLD AND ETHNIC LEADERS 
 
4. (C) Noting that WFP has a mandate to be "inclusive," 
Morris said he had also held separate meetings with ethnic 
leaders and with NLD leaders (Secretary U Lwin and CEC member 
U Nyint Wei).  His meeting with ethnics included Seng Raw, a 
Kachin of the Metta Foundation, and U Aung Myint, 
representative for the United Wa State Army.  Morris said 
that he discussed general development issues with the NLD, 
explaining to party leaders that WFP carefully selects 
partners among the NGO community, does not work with 
government NGOs (GONGOs), and identifies its feeding program 
beneficiaries independent of the GOB. 
 
THE GOB'S LOOPHOLE REVEALED 
 
5. (C) In a damning revelation, Morris announced to donors 
that WFP Burma recently discovered that they have been paying 
the GOB a 10% "export tax" for all the food commodities they 
purchase, and then distribute, in Burma.  WFP claims they 
were unaware because the GOB made a surreptitious arrangement 
with suppliers to mark up prices and collect the "tax." 
 
6. (C) Morris noted that in Burma, WFP purchases all its food 
commodities locally (except vegetable oil), a process that 
most countries appreciate for the economic advantages. 
However, he said that an "export tax" on commodities that do 
not ever leave the country is without precedent in WFP's 
global program.  He said he raised the issue with the 
Minister of National Planning and Economic Development, who 
gave assurances that "this tax will be eliminated." 
 
PRIME MINISTER SOE WIN VOICES SUPPORT FOR THE U.N. 
 
7. (U) According to Morris, in a meeting with Prime Minister 
Soe Win and various GOB ministers, the PM praised the UN 
community in Burma, expressed his "high respect" for its 
work, and said the GOB seeks closer cooperation.  Morris 
addressed the increasing difficulty UN and NGO personnel are 
facing in accessing project sites and asked the GOB to be 
more flexible. 
 
COMMENT:  REGIME-STYLE TITHING 
8. (C) WFP in Burma faces many challenges, including access 
of its personnel to the field, bureaucratic delays in 
transporting food commodities, and now the revelation that 
the GOB has been skimming 10% off its food 
budget--systematically taxing the poorest of its poor in a 
country where an estimated 35% of children under five years 
of age are chronically malnourished.  General Soe Win's 
"praise" for the UN community stands in stark contrast to 
recent GOB diatribes against the ILO and increasing 
restrictions placed on UN and NGO workers.  END COMMENT. 
Stoltz