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

“Gold is valuable, but jade is priceless,” as an old Chinese saying goes.

Jade is not only high value, but easy to transport.

“Only the stones they cannot hide go to the emporiums,” said Tin Soe, 53, a jade trader in Hpakant, referring to the official auctions held in Myanmar’s capital, Naypyidaw.

The rest is smuggled by truck to China by so-called “jockeys” through territory belonging to either the Burmese military or the Kachin Independence Army (KIA), both of whom extract tolls. The All China Jade Trade Association, a state-linked industry group based in Beijing, declined repeated requests for an interview.

Hpakant lies in Kachin State, a rugged region sandwiched strategically between China and India. Nowhere on Earth does jade exist in such quantity and quality. “Open the ground, let the country abound,” the sign outside the Hpakant offices of the Ministry of Mines reads.

In reality, few places better symbolize how little Myanmar benefits from its fabulous natural wealth. The road to Hpakant has pot-holes bigger than the four-wheel-drive cars that negotiate it. During the rainy season, it can take nine hours to reach from Myitkyina, the Kachin state capital 110km away.

Non-Burmese are rarely granted official access to Hpakant, but taxi drivers routinely take Chinese traders there for exorbitant fees, part of which goes to dispensing bribes at police and military checkpoints. The official reason for restricting access to Hpakant is security: The Burmese military and the Kachin Independence Army have long vied for control of the road, which is said to be flanked with land mines. However, the restrictions also serve to reduce scrutiny of the industry’s biggest players and its horrific social costs: the mass deaths of workers and some of the highest heroin addiction and HIV infection rates in Myanmar.

There are also “obvious” links between jade and conflict in Kachin, said analyst Richard Horsey, a former UN senior official in Myanmar. A 17-year ceasefire between the military and the KIA ended when fighting erupted in June 2011. It has since displaced at least 100,000 people.

“Such vast revenues — in the hands of both sides — have certainly fed into the conflict, helped fund insurgency and will be a hugely complicating factor in building a sustainable peace economy,” Horsey said.

The US banned imports of jade, rubies and other Burmese gemstones in 2008 in a bid to cut off revenue to the military junta that then ruled Myanmar. However, soaring demand from neighboring China meant the ban had little effect. After Myanmar’s reformist government took power, the US scrapped or suspended almost all economic and political sanctions — but not the ban on jade and rubies. It was renewed by the White House on Aug. 7 in a sign that Myanmar’s anarchic jade industry remains a throwback to an era of dictatorship. The US Department of the Treasury included the industry in activities that “contribute to human rights abuses or undermine Burma’s democratic reform process.”

Foreign companies are not permitted to extract jade. However, mining is capital-intensive and it is an open secret that most of the 20 or so largest operations in Hpakant are owned by Chinese companies or their proxies, gem traders and other industry insiders in Kachin say.

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