Lifting US jade sanctions ‘a mistake’: Burma minister

23-Dec-2016 Intellasia | CNA | 6:00 AM Print This Post

The minister in charge of mining in Myanmar’s conflict-ridden state of Kachin says it was a mistake for the United States to lift sanctions on the country’s notorious jade industry.

Kachin lies at the heart of the “jade tract”, a small area that has deposits of the majority of the world’s precious green gemstone.

The secretive industry in Myanmar, worth an estimated $31 billion in 2014, according to Global Witness, has been shadowed by a long-running narrative of corruption, cronyism and abuses.

It was also one of the last remaining sectors still under the grip of US economic sanctions, enforced following the Saffron Revolution in 2007. The restrictions had meant the import or purchase of jade, as well as rubies, was banned.

However, the sanctions were largely seen as targeting key influential figures involved in murky business dealings. The jade trade is central to that. And it was a surprise when US President Barack Obama eased the controls, with the support of Myanmar State Counsellor Aung San Suu Kyi, in September.

“It is the right thing to do in order to ensure that the people of Burma see rewards from a new way of doing business and a new government,” Obama said at the time.

Following the decision, human rights experts jumped to warn that a final piece of leverage the government and international community had against the powerful military and its proxy companies would be gone.

Now, Hkyen Le Awn, the Kachin state minister for mining has joined their ranks in vehement opposition to a policy his own party helped orchestrate and deliver.

“Actually, the Americans shouldn’t release the sanctions,” he told Channel NewsAsia as part of a diatribe against the “atrocities” of the military in the area, whom he described as “getting worse than Islamic State”.

“Because of the American release, the military is getting stronger than before. If they didn’t release the sanctions, it would be the same as before and the military would realise that America is not supporting them,” he said.

He added that the opportunity to transform national politics had now been lost and it would be the people of Kachin that would suffer the most.

The National League for Democracy, the ruling party, has dealt blows to the jade business in recent times by suspending operations and not renewing mining permits when they expire. People close to the industry say that those moves have been felt by the sector, as thousands of operators can no longer function.

However, there is a greater sense that regardless of any official moves, the best days for jade mining have now passed.

The industry is in a decline that could re-shape much of the local economy.

“NO-ONE IS GETTING MUCH”

The settlement of Hpakan is Kachin’s mining nucleus. It is a dust-choked, drug-fuelled, violence-prone settlement that is completely off limits to outsiders.

Gam Shawng is a businessperson and trader who has been working in the jade sector – in Hpakan – for more than ten years. He says times have never been tougher. The reason, he claims: is not sanctions, but fractured local politics and a slowing Chinese economy.

“Jade markets haven’t worked well for almost two or three years, since Xi Jinping became the Chinese president,” he said. A once-insatiable Chinese demand for jade has begun to slow, in parallel with Xi’s crackdown on graft.

The ongoing conflict between the military and the Kachin Independence Army has added to the uncertainty. “Sometimes, the military comes and checks our jade mines. They shoot and bomb the miners when they don’t have a good relationship,” he explained.

The mines in Hpakan were known to have gone into overdrive in the months leading up to last year’s elections. The rapid extraction not only caused deadly landslides in the area but also flooded the market.

Now, there is less jade to be found and fewer customers to sell it to.

“Most of the companies have stopped and they don’t extend the licenses,” Gam Shawng said. “The expired companies close down. No-one is getting much jade this year.”

The evidence of the decline is also clear in the state capital Myitkyina.

In a small backyard, hidden under green tarpaulins, lies more than 60 tonnes of unprocessed jade boulders. The owner of the house takes a small fee from low-level operators who have managed to transport their bounty from the mines to the city.

They have a problem though. No one wants it.

Much of this jade has been here for more than one year, the custodian explains. He has no idea when their owners will return but does not expect it will be soon.

At the nearby Gems and Jewellery Trade Centre, the lack of enthusiasm in the market is obvious.

Trade here is dominated by amber sales. Dozens of buyers and sellers inspect and negotiate over the fossilised resin, which will be transformed into jewellery.

It also comes from mines throughout Kachin, but the market is less lucrative and more domestic, meaning the trade has carried on, largely indifferent to the outside forces that dictate jade’s fluctuating fortunes. One shop owner explains that several of the jade stores have closed down.

The statistics back up the sentiment. The Ministry of Commerce reported that the country earned $376 million from April to November this year from jade exports, down from $544 million in 2015.

The discovery of a 175-tonne jade boulder in October was a rare highlight in a tough year for business. And its estimated $170 million value – nothing close to what it would have been a decade or more ago – will not be shared by any of the workers who found it anyway.

Although much of the trade is clandestine and illicit and therefore not recorded officially, the trade channels are shrinking.

GIFT FROM GOD

One young entrepreneur is trying to buck the trend. My San Aung, 20, moved to Ruili in China for four years to learn the craft of shaping raw jade into highly valuable pieces, a skill often lacking in this part of Myanmar.

“The local people don’t buy this, it depends on the Chinese customers,” he said. “People in Myitkyina also don’t know how to make the nice items. So it’s worth it.”

Maung Chin, 48, runs the largest jade jewellery retailer in Myitkyina. He has been in the business since the illegal days of three decades ago, before machinery and moguls. He has witnessed first hand the explosion of demand from China.

“Chinese people have loved jade since the world began. A piece that was $5 in the 1980s became $10 after 1995. And a piece which was $1000 has become a million dollars now,” he said.

He says US sanctions can affect business only so much when it is Myanmar’s neighbour driving everything. But he noted the symbolism of President Obama’s move.

“If the situation is unstable and the place is not safe, nobody will come and invest in jade. If nobody trusts us, they won’t bring any money to invest.”

Gam Shawng too believes, perhaps optimistically, that the lifting of US sanctions will revive his business.

“The jade market will be good automatically as soon as the Americans release the sanctions and there is market in Europe.” The European Union in fact is due to review its own sanctions on Myanmar in April.

“If there is a market in Dubai, we can sell it. Most people see jade as accessories, but we can use it in building houses to be cool too.

“I accept that jade is the blessing from God for Kachin people,” he added. “The market won’t disappear.”

http://www.channelnewsasia.com/news/asiapacific/lifting-us-jade-sanctions-a-mistake-myanmar-minister/3383810.html

 


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