Rangoon Rental Costs in the Spotlight After Unicef Outcry

By Kyaw Hsu Mon & Simon Lewis 30 May 2014

RANGOON — Following an outcry over the revelation that the United Nations Children’s Fund (Unicef) is paying a steep rental fee to a former military official, other international organizations operating in Burma are facing calls to be transparent about their rental arrangements in Rangoon.

Last week, Unicef admitted that it pays US$87,000 per month for its office in the up-market Golden Valley neighborhood of the former capital, and confirmed that the property’s owner is related to a former general—thought to be former Agriculture Minister Nyunt Tin.

Some organizations have followed Unicef’s lead in revealing information on their rental of properties in Rangoon. The World Health Organization (WHO) admitted it is paying almost as much, $79,000 per month, for its Rangoon office.

The Unicef story—first reported by The Irrawaddy—has brought into public discussion the issues of Rangoon’s soaring property market, the concentration of ownership of properties among former military officials and their associates, and the transparency of foreign aid organizations.

Vicky Bowman, the director of the Myanmar Center for Responsible Business, said she was “disappointed” that a UN agency would enter into such an arrangement.

“It is very disappointing to see them paying such high prices to anyone, and especially when a former general owns the property,” Bowman, a former UK ambassador to Burma, said during this week’s Dateline Irrawaddy program.

While there are few properties to choose from for such organizations, Bowman said it was positive that Unicef’s rental cost and the identity of the recipient had come to light.

“Now we know [Nyunt Tin] is earning about a million dollars a year,” she said. “He is subject to income tax, which is about 20 percent in Burma. So, he should pay $200,000 to the government.”

Following last week’s Unicef disclosure, The Irrawaddy approached a number of other international organizations requesting information on their rental of properties in Rangoon.

The WHO, which is also a UN agency, told The Irrawaddy its office on Pyay Road in Mayangone Township is rented at a cost of $79,000 per month. The price tag means the agency is paying $948,000 a year for its office, more than one-tenth of its total annual budget in Burma of $9 million.

Rumor has it that the property is owned by the Burmese military’s Commander in Chief Snr-Gen Min Aung Hlaing, or someone in his family. But a WHO representative denied it in an email to the Irrawaddy.

“It belongs to a landlady Daw Khin Nwe Mar Tun,” the representative said.

Similarly to Unicef, the WHO explained that following the Burmese government’s order for UN agencies to move out of Traders Hotel (now Sule Shangri-La) last year, the agency conducted a wide search for suitable properties in Rangoon.

“Finally, the present property was identified [and] found suitable also in line with UN security standards,” the WHO said.

“The rental cost was high, in line with current market rates of astronomical rents but the building was taken after careful and due diligence. Though it was not to our desirable cost, but the best rate that were available and suitable at the time.”

The European Union’s Burma mission, which rents an office in the Hledan Center as well as a residence in Rangoon, declined immediately to declare its rental arrangements.

In reports that could not be independently confirmed, sources told The Irrawaddy that the EU ambassador’s residence, close to Inya Lake, belongs to a family member of the late Burmese dictator Gen. Ne Win.

The Asian Development Bank, which does not rent a standalone property but hires office space in the Union Business Center near Kandawgyi Lake, also declined to give details of its rental arrangement.

Smaller UN agencies have come forward with details of their office rents.

The Joint United Nations Program on HIV/AIDS said the villa it shares in Kamaryut Township costs $11,500 per month.

“We share the space with two small UN supported entities/projects so UNAIDS pays $9350 per month,” Country Director Eamonn Murphy said by email, explaining that due diligence had been conducted on the property’s owner.

“No known links were found to members of the former military or current government.”

According to Pierre Peron, spokesman for the UN Office for the Coordination of Humanitarian Affairs, his agency “rents office space at the cost of 12,000 USD per month for 30 staff” in Bahan Township.

‘There’s No Choice’

Observers said it was likely that Unicef was not alone in renting from someone with connections to Burma’s former military regime.

Kyaw Lin Oo, the executive director of the Myanmar People Forum Working Group, said a shortage in the supply of properties in Rangoon had driven up prices and left international organizations with sparse choice of properties.

“Most houses in the better locations in Rangoon are owned by former military generals and cronies,” he said, adding that international NGOs would face the same difficulty.

“Most of the INGOs and UN agencies have to rent their houses. There’s no choice, so such aid money is going into the generals’ pockets,” Kyaw Lin Oo said. “Rich people are getting richer and richer.”

Aung Myo Min, director of Equality Myanmar, also told The Irrawaddy it was likely that many international organizations and NGOs were paying high rents to people linked to the former military regime.

“The problem in Burma is while such NGOs and INGOs are renting houses, some don’t know who is the real owner,” he said.

“Mostly, there is no ownership under the general’s name. They might use some other name, so [the renters] don’t know. We have to be cautious about this issue.”

While he agreed that it was difficult for international organizations to avoid the situation, Aung Myo Min said the high cost paid to rent offices risked undermining the work that aid organizations do in Burma.

“I always object to some international organizations whose costs are higher than the amount that reaches the people,” he said.