Global IssuesDipping Dollar Hits Burmese Refugees
Tracking gun battles along the Thai-Burma border and preparing for another wave of refugees are not the only things that concern British humanitarian Sally Thompson.
She also spends her days immersed in the fluid world of global currencies, worried about the steadily weakening U.S. dollar.
'We monitor the currency all the time. We have to constantly adjust our budgets,' says 52-year-old Thompson in her office in Bangkok’s busy financial district. 'It comes down to our buying power with the baht.'
Thompson and her colleagues at the Thai-Burma Border Consortium (TBBC) are trying to come to grips with the downward slide of the dollar against the Thai baht, which has appreciated in recent days by 10 percent, emerging as the strongest currency in Southeast Asia.
A strong baht means huge losses for aid groups like TBBC whose funds are dollar-denominated. Its annual budget for 2011 is 40 million dollars, and a drop from 30 to 29 baht to a dollar, which is where the exchange rate stood when the year began, could mean a shortfall of 14 million baht, equivalent to nearly one million kilos of rice.
And TBBC, which has been caring for Burmese refugees for the past 25 years, is unlikely to get more baht for its dollars this year, given the direction foreign and local speculators are driving the bond market here.
It is a similar reality that haunts much smaller organizations doing humanitarian and political work along the border Thailand shares with Burma, or Myanmar.
The border is home to over 500,000 internally displaced Burmese who have fled military oppression as well as the conflict between government troops and separatist rebels that has been raging since the early 1980s. The majority of these refugees are in eastern Burma, near the Thai border.
Since last year, foreign currency speculators have eyed Thailand’s bond market as fertile ground for quick profits, helping to push the short-term bond market to 320 billion baht (10.4 billion U.S. dollars), up from the 270 billion baht (8.8 billion baht) at the same time last year.
'In the first week (of 2011), we have seen net foreign buying of 50 billion baht, about 80 percent of which was for short-term investment in debt- instruments of less than one year in maturity,' Ariya Tiranaprakij, vice- president of the Thai Bond Market Association, was recently quoted as saying in a local daily.
But such capital flows coming into this region are taking a bite from the vulnerable, among them humanitarian workers at TBBC.
Nagesh Kumar, chief economist of the Bangkok-based United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), observes that the situation will cause a lot of problems. 'The weakening of the U.S. dollar and exchange volatility will continue,' Kumar said.
The impact a weakening dollar has on humanitarian programs is also felt in other parts of Asia, where the U.N. food relief agency World Food Programme (WFP) supplies emergency needs.
'WFP buys most of its food in U.S. dollars, so any depreciation in its value is likely to have an impact on our ability to provide food assistance to the world’s hungry poor,' Marcus Prior, WFP spokesman for its Asia office, told IPS.
For the likes of TBBC, which currently cares for some 145,000 refugees in camps along the 2,000-km Thai-Burma border, the prolonged downward spiral of the dollar comes at a trying time: it is expecting to feed more mouths.
A new round of fighting between Burmese troops and ethnic Karen rebels had erupted along the border in early November, forcing tens of thousands of Karen civilians to flee to Thailand for safety.
'This instability along the border will continue. We expect more new arrivals to come because of this uncertain political situation,' says Thompson, the deputy director of TBBC.
It is a view echoed by other Burmese activists operating in Mae Sot, a Thai town close to the Burma border. They, like TBBC, are also grappling with a weakening dollar.
'We have been forced to downsize all our democracy and empowerment training programmes for people from Burma,' says Naing Aung, the secretary general of the Forum for Democracy in Burma (FDB), a coalition of Burmese political exiles.
In 2009, the FDB budgeted its 2010 costs at one dollar to nearly 35 baht. By the end of last year the exchange rate saw a dollar valued at only 29 baht. 'Nearly 20 percent of our budget was affected,' he said in an interview from the Burmese border.
'This trend began with the financial crisis and has worsened since,' says Debbie Stothard of ALTSEAN, a South-east Asian human rights lobby. 'Pro- democracy and humanitarian work has been affected.'
For now, the ripples of the global financial crisis that began in the U.S. in late 2008 and still impacting remote corners of western Thailand has not prompted a change of heart among the western donor countries.
'We are giving the same amount as we gave before to the Thai-Burma border,' a diplomat from a donor country told IPS. 'There is no talk in policy circles to change that because of the financial crisis.'
© Inter Press Service (2011) — All Rights ReservedOriginal source: Inter Press Service