Blood jade empire as Burma warlords diversify

An in-depth Sept. 29 Reuters report on the multi-billion-dollar but very murky jade trade in Burma raises the specter of "blood jade"—without actually using the phrase. Almost half of all jade exports are "unofficial"—apparently spirited over the border into China with little or no formal taxation, representing billions of dollars in lost revenues. Official statistics are said to indicate that Burma produced more than 43 million kilograms of jade in fiscal year 2011-12, worth a low-balled $4.3 billion. Yet official exports of jade that year stood at only $34 million. (It isn't explained how all that "unofficial" jade made it into the production stats in the first place.) China doesn't publicly report how much jade it imports from Burma, but jade is included in official imports of precious stones and metals, which in 2012 were worth $293 million—a figure too small to account for billions of dollars in Burmese jade.

In a rare visit to the heart of Burma's jade industry in Hpakant, Kachin state, Reuters found mines and export networks controlled by a patchwork of companies controlled either by the military or the rebel Kachin Independence Army (KIA)—which held Hpakant until a 1994 cease-fire returned it to government hands. But even the military-controlled firms seem to be dealing under the table. The Harvard Ash Center published a report in July that put sales of Burmese jade at about $8 billion in 2011—more than double the country's revenue from natural gas. "Practically nothing is going to the government," David Dapice, the report's co-author, told Reuters. 

The bulk is evidently smuggled by truck to China by so-called "jockeys" through territory belonging to either the Burmese military or the KIA, both of whom extract tolls. The All China Jade Trade Association, a state-linked industry group based in Beijing, declined repeated requests fro Reuters for an interview.

There are "obvious" links between the jade trade and the remote region's war, said Richard Horsey, a former UN senior official in Burma. The 17-year cease-fire between the military and the KIA ended when fighting erupted in June 2011. Since the, some 100,000 have been displaced. "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 and other Burmese gemstones in 2008, but soaring demand from China meant the ban had little effect. After Burma's reformist government took power, the US dropped most sanctions—but not the ban on jade and rubies. The US Treasury Department included the industry in activities that "contribute to human rights abuses or undermine Burma's democratic reform process."

Last year, protests outside the Letpadaung copper mine (Sagaing region) triggered a violent police crackdown. The mine's two operators are the Union of Myanmar Economic Holdings Ltd (UMEHL), investment arm of the military, and Myanmar Wanbao, a unit of Chinese weapons manufacturer China North Industries Corp (Norinco). These entities shares most of the profits, leaving the government with just 4%. That contract was revised after the protests in an apparent attempt to appease public anger, with the government now getting 51% of the profits, much of it ostensibly to be invested in local communities.

Radio Free Asia reported Sept. 25 that a new protest was held against Letpadaung facility by local villagers as a deadline approaches for residents relocated by the mine to accept a compensation deal fom the government. FRA reported Aug. 29 on a protest march at the local town of Monywa when a resident accused of leading last year's protests against the mine was sentenced to two years in prison.

As the jade empire burgeons in Burma's northern jungles, it seems tribal warlords and the military continue to vie for control of the opium trade as a source of revenue. The White House in its new annual report on the illicit drug trade finds that Burma had "failed demonstrably" to make significant progress in its drug eradication efforts over the last year. Among 22 countries that the US designates as "major drug transit and/or major illicit drug producing countries," Burma was castigated along with Bolivia and Venezuela in the annual review. Aid to Burma will not be suspended, because it was found to be "vital to the national interests of the United States." Burma is the world's second-largest producer of opium, after Afghanistan. (Irrawady, Sept. 16)




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