Fri, Oct 04, 2013 - Page 9 News List

Myanmar’s old guard clings to US$8 billion jade empire

The government is losing billions of dollars in ‘unofficial’ jade sales — revenue that could be used to rebuild a nation devastated by dictatorship

by Andrew R.C. Marshall and Min Zayar Oo  /  Reuters, HPAKANT, Myanmar

Illustration: Mountain People

Tin Tun picked all night through teetering heaps of rubble to find the palm-sized lump of jade he now holds in his hand. He hopes it will make him a fortune. It has happened before.

“Last year I found a stone worth 50 million kyat,” he said, trekking past the craters and slag heaps of this notorious jade-mining region in northwest Myanmar.

That is about US$50,000 — and it was more than enough money for Tin Tun, 38, to buy land and build a house in his home village.

However, rare finds by small-time prospectors like Tin Tun pale next to the staggering wealth extracted on an industrial scale by Myanmar’s military, the tycoons it helped enrich and companies linked to the country where most jade ends up: China.

Almost half of all jade sales are “unofficial” — that is, spirited over the border into China with little or no formal taxation. This represents billions of US dollars in lost revenues that could be spent on rebuilding a nation shattered by nearly half a century of military dictatorship.

Official statistics confirm these missing billions. Myanmar produced more than 43 million kilograms of jade in the April 2011 to March 2012 fiscal year. Even valued at a conservative US$100 per kilogram, it was worth US$4.3 billion, but official exports of jade that year stood at only US$34 million.

Official Chinese statistics only deepen the mystery. China does not publicly report how much jade it imports from Myanmar, but jade is included in official imports of precious stones and metals, which last year reached US$293 million — a figure still too small to explain where billions of dollars of Myanmar jade has gone.

Such squandered wealth symbolizes a wider challenge in Myanmar, an impoverished country whose natural resources — including oil, timber and precious metals — have long fueled armed conflicts while enriching only powerful individuals or groups. In a rare visit to the heart of Myanmar’s secretive jade-mining industry in Hpakant, Reuters found an anarchic region where soldiers and ethnic rebels clash, and where Chinese traders rub shoulders with heroin-fueled “handpickers” who are routinely buried alive while scavenging for stones.

Burmese Minister of Mines Myint Aung did not reply to written questions from Reuters about the jade industry’s missing millions and social costs.

Since a reformist government took office in March 2011, Myanmar has pinned its economic hopes on the resumption of foreign aid and investment. However, some economists say that Myanmar’s prosperity and unity may depend upon claiming more revenue from raw materials.

There are few reliable estimates on total jade sales that include unofficial exports. The Harvard Ash Center, which advises Myanmar’s quasi-civilian government, has possibly the best numbers available.

After sending researchers to the area this year, the Harvard Ash Center published a report in July that put sales of Burmese jade at about US$8 billion in 2011. That is more than double the country’s revenue from natural gas and nearly a sixth of its GDP that year.

“Practically nothing is going to the government,” said David Dapice, the report’s co-author. “What you need is a modern system of public finance in which the government collects some part of the rents from mining this stuff.”

HIDING STONES

Chinese have prized jade for its beauty and symbolism for millennia. Many believe wearing jade jewelry brings good fortune, prosperity and longevity. It is also viewed as an investment, a major factor driving China’s appetite for Burmese jade.

This story has been viewed 2137 times.
TOP top