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Survivors of Cyclone Nargis during an aid distribution in Yangon in May 2008.
REUTERS/Stringer
REUTERS/Stringer
NEWSDESK
Ten days after Cyclone Nargis, physics teacher Tin Win was sitting in his local teashop on the outskirts of Yangon wondering how his meagre salary could possibly stretch to replacing the roof ripped off his house by the disaster.
When the owner of the teashop - an old friend - came over with an envelope containing $400, he was astonished. "It was exactly what I needed," he said. "But I had no idea where it came from." The money had actually been sent by Canadian graphic designer Jon Trent. When he saw the reports of Nargis from his home in Toronto, Jon's first thought was for Tin Win, a friend from Myanmar he had made on a recent holiday in Yangon. Desperate to help but with no way of contacting Tin, Jon went not to an international aid agency but to a local Myanmar cafe in Toronto. When they said they could deliver cash to Myanmar, David decided to trust them with $400 and Tin's name. Days later, it was in Tin's hands. Neither Tin nor Jon have any idea how the money travelled. Others do, having used these networks for years. Accurate figures are impossible, but some aid workers estimate that even four months on from the cyclone, the assistance reaching survivors through private channels still comprised as much as 40 percent of what was getting through. And while traditional remittance support from families abroad undoubtedly made up a large percentage, much funding was also clearly coming from people like Jon, choosing unofficial channels for assistance over donating to large agencies. A matter of hours after the cyclone, the phone of Dr Tun Myint, a longstanding Myanmar exile in Minnesota, began to ring with friends and colleagues wanting to know how to help. Myint put them in touch with activists in Thailand and began arranging couriers for funds, operating outside the official system to evade the crippling government exchange rates. He wasn't the only one - and small donations add up: within six weeks of the disaster, the United Nations guesses that at least $11 million moved secretly into Myanmar - equal to the total commitment by the Canadian government and the $11 million of local donations that were recorded. FAST WAY TO HELP Support to individual disaster victims from relatives in the diaspora is, of course, hardly new or surprising. But one year on from Nargis, development economists say the response to the disaster highlighted interesting and important new trends. Known global remittances now total around three times the amount spent on international aid, and as the movement of money becomes faster and easier, have become an ever more significant form of humanitarian assistance. A 2007 paper published by British think-tank the Overseas Development Institute noted that in post-tsunami Sri Lanka, money sent to victims amounted to a 15 percent increase on annual remittances. And the choice of Myint's friends to use private networks - people without a direct personal link to Myanmar - rather than donate to large charities - is also increasingly common. "It's a consumer choice," said World Bank economist and remittances expert Dilip Ratha. "We are seeing a shift from donations to big aid agencies to remittance channels. They are faster, more effective and tailored to the needs of the individual in a way no aid agency can match." And in an environment where large scale international aid struggles, remittance money can make a crucial difference. On the ground, aid workers reported that the impact of such efforts was dramatic. "In the weeks afterwards, everyone was asking why there hadn't been more secondary deaths," said one aid worker in Yangon. "The answer is simple: the local response was incredible." While Nargis was an extreme example, remittance experts argue that the fact that most immediate emergency assistance is provided by the local community means that the instant financial help provided by remittances is something that needs to be better understood. ADVANTAGES OVER OFFICIAL AID As the Nargis response proved, remittance or unofficial funding has some considerable advantages over official aid. In the case of Myanmar, the cash moved via an unofficial system honed over decades of evading the junta and was able to move astonishingly fast. One Myanmar exile in the United States, for example, got cash to his affected family in Yangon in under 48 hours - faster than any official response. And in the case of Myanmar, unlike international aid, it is not subject to the government levies or commission charges that bedevilled the U.N. effort. Handled by trusted contacts, wired to bank accounts in Singapore and Thailand then smuggled in by couriers across the Thai-Myanmar border or passed through bank systems via sympathetic banking staff, it arrived in cash. Networks in the country delivered it to individuals - some aid workers speak of hiding thousands of dollars under beds - to monasteries or to local organisations as specified. "If we send it directly into Myanmar, the government will take all the money - so we find as many different ways as we can to help our families and those who were affected by the cyclone," says another U.S.-based exile. As Myint pointed out, remittance aid can reach into the remotest areas and to specific projects. And it moves through local networks which have a real handle on the actual needs on the ground. But remittance aid is far from the solution to all humanitarian shortcomings. Aid agencies warn that "flying money" assistance can be just as problematic as official aid, just in different ways. The delivery is patchy, and not co-coordinated. Most remittances are still sent to friends and family - those without international contacts often miss out. NO SUBSTITUTE Money sent through unofficial systems cannot be easily tracked, and is vulnerable to corruption and misuse. As Ratha points out, some aid must remain within an official system to be sustainable: "Remittances will never be a substitute for official aid. Fixing roads, draining water - these have to be public projects." And Myanmar is a unique operating environment, characterised by a highly self-reliant population, a proactive diaspora, a highly problematic official financial network, very strong social organisations, and a profoundly difficult environment for international agencies, all of which have combined to highlight the importance of unofficial local aid. Such shortcomings are more than acknowledged by the likes of Myint. Having managed his ad-hoc aid broker role for a year now, he says lack of organisation, difficulties in targeting the greatest needs and lack of accountability are key problems. "Many people have said that if I can identify a need, they will write a cheque. But it is very hard from the U.S. to see where money really needs to go." Myint has, he said, also worked hard to ensure other positive outcomes from his work: villagers who ask for funds must come to him with proposal endorsed by the whole community. "This means they need to discuss what they want together and make decisions - this is how democracy is shaped from the ground. These roots need to be there in Burma." Myint also argues that greater co-ordination with official humanitarian systems is an important part of improving the efficacy of both kinds of aid - and in this he is not alone. Many humanitarians, whose systems have long failed to factor in private aid or its agents, also acknowledge they have much to learn in this regard. Ideas for the future floated by academics include providing free money transfer services or other facilitation - the U.S. Treasury lifted the $300 limited on personal remittances to Myanmar a week after the cyclone to allow individuals to help - and finding ways to track those who are getting private help. The Humanitarian Policy Group also suggests helping disaster survivors regain the documented proof of identity which banks and other remittance companies require to make transactions. "Humanitarian agencies also need to design their assistance programmes in ways that complement and enhance remittance flows," concludes their Briefing Paper. Lessons learned in Myanmar could yet have far reaching implications for future disaster responses.
