Rising costs in Myanmar put strain on UNICEF’s resources in Yangon
UNICEF News Note
The end of foreign sanctions and the opening up of Myanmar have led to countless benefits for the country’s children, however they have also led to rising operational costs for UN agencies and other aid organizations.
Escalating costs have meant new challenges in meeting the needs of the population. In particular. spiralling real estate prices in Yangon, have put a strain on UNICEF resources as UNICEF’s rents have nearly doubled in the past three years.
As the country opened up to foreign business, and businesses competed to take advantage of the new opportunities, demand increased dramatically for accommodation. In 2012 UNICEF was given one year’s notice by the Ministry of Tourism and the owner of the Traders Hotel to vacate the premises by mid-2013. The rate the Trader’s Hotel was US$1 per square foot (approx. $45,000 per month for 130 staff).
Due to the rising costs, the organization searched for new smaller premises – although for a larger staff - in various locations in Yangon (in Botataung Township, Kyauktada Township, Pabedan Township, Yankin Township, Kamayut Township, Hlaing Township, Mayangone Township and Bahan Township) and chose the most cost-efficient option available. UNICEF undertook an extensive search of some 40 premises or spaces. However the properties were either too expensive, too difficult to reconstruct as they were residential, were incomplete buildings or held potential risk of flooding.
The current office premises, in Inya Myaing Road in Bahan Township, was then offered at a competitive rent of US$2.90 per square foot. The owner agreed to bear the additional expense of ensuring the new building was suitable for UNICEF’s work and provided a 3000sq ft side-building free-of-charge. This space is 33,000 sq.ft at a steep rental of $ 87,000 per month. However the rent is fixed for 7 years and it is a competitive commercial price in a tough market. Some international agencies have had to pay considerably more than our $2.9 per square ft for suitable space to avoid halting their programmes.
Standard due diligence on the owner and her family concluded that none of the international sanctions in place until recently had been levied against the landlady or her immediate family and no criminal charges were extant. Although allegations against a member of her family who was once a member of the previous military regime surfaced, the official had since left public office and was not subject to any criminal charges or international sanctions. Consequently, the best interests of the children we exist to help would not be damaged through this commercial engagement.
UNICEF, like other UN agencies in a similar predicament, continues to seek free or supported space from the Government of Myanmar. It is committed to continuing support for the country’s children, who will ultimately benefit from the political reforms and related economic development.