BANGKOK (AlertNet) - Myanmar will be given 35 million euros ($52 million) in aid to tackle food insecurity and livelihood issues in the poorest areas of the country in the next five years, the European Union (EU) has announced.

The EU has been a major source of funding for recovery after Cyclone Nargis left more than 140,000 dead and 2.4 million destitute in May 2008 in the Irrawaddy delta, an area once dubbed the country's rice bowl.

The EU has provided funding for about two thirds of recovery projects but money has been mostly spent on the worst-affected delta region. The new money, channelled through the EU's LIFT (Livelihood and Food Security Trust Fund) will see aid being expanded beyond the the delta through United Nations agencies and non-governmental organisations.

David Lipman, the EU regional ambassador, who has returned from a recent trip to Myanmar where he met senior government and opposition figures, said he had detected a new mood among the ruling generals.

"The (Myanmar) government is being much more cooperative," Lipman told journalists.

Lipman said the EU hoped contributions from other donors such as Britain and Australia eventually would increase the amount of money in LIFT to $100 million.

Almost 18 months after the disaster, tens of thousands of survivors are still living in makeshift shelters. Many farmers are also struggling with crippling debts after the cyclone destroyed their crops and killed livestock.

The program will cover, in addition to the delta, Chin, Shan, Rakhine and Kachin states as well as the dry zone in central Myanmar.

The four states are political hotspots - home to many of Myanmar's ethnic minorities and beset by problems ranging from poverty and lack of infrastructure to government restrictions and discrimination and insurgency.

It is unclear though whether the programme will extend to ceasefire areas or areas where insurgents are active.

The EU's announcement came after a flurry of diplomatic and political activities on Myanmar in the past few weeks, starting with the United States' disclosure that it would be talking to the junta, a move which opposition leader and Nobel laureate Aung San Suu Kyi said she supported.

Since then, she has also met foreign diplomats on the issues of sanctions, blamed by some to have contributed to the country's dire living conditions.

Aid agencies in Myanmar welcomed the announcement but said more funding was needed.

Andrew Kirkwood, country director in Myanmar for aid agency Save The Children, told AlertNet the funds, at $20 million a year, will mean a 10 percent increase in humanitarian assistance to Myanmar. Currently Myanmar receives about $200 million a year.

"But it still leaves the total assistance to Myanmar at about $4 per person inside the country per year," said Kirkwood.

He pointed out that Myanmar received less overseas development assistance than any of the poorest 55 countries in the world. The average assistance to those 55 poorest countries in the world is more than $42 per person, Sudan receives $51 per person, Zimbabwe $41 per person and Laos $58 per person, said Kirkwood.

"The fund is hugely welcome. It's going to focus on a very important issue for children in Myanmar," added Kirkwood. "But it's not going to address on its own the continued under funding of assistance activities in Myanmar."

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