Myanmar: Reforming The Jade Industry The Litmus Test For New Government
Lotus News Analysis
Singapore: As a new government led by Aung San Suu Kyi takes over in Myanmar this month, reforming Myanmar’s Jade mining industry and ensuring the benefits of it flow to the people and the national coffers would be the litmus test of its democratic credentials.
Many people tend to conclude that having a free and fair multi-party election and a long serving government being overthrown by the peoples’ verdict is the ultimate test of a country’s flowering of democracy. But, in today’s globalized economic system that by itself is not enough. The ability of democratic change to make real changes to grassroot peoples’ exploitative living conditions and reign in foreign investors that work hand in glove with corrupt local officials and business leaders are the real challenges facing today’s democratic leaders.
The way, Myanmar’s new leaders led by Suu Kyi (either as president or puppeteer) moves to clean up the Jade mining industry in the country and create proper safety standards and accounting procedure should be a major criteria on judging the new government’s ability to push real democratic change.
According to estimates by British-based Global Witness, an international non-governmental organization (NGO) dedicated to expose corruption and exploitation in the world’s mining industry, Myanmar’s Jade industry was worth $ 31 billion in 2014 alone. This figure is 48 percent of Myanmar’s official GDP and 46 times it annual health budget. But, only about a tenth of this comes into government coffers.
After 114 miners were killed in a deadly landslide in the major mining town of Hpakant in Kachin State on November 26th last year, Suu Kyi said in a Radio Free Asia interview that this type of accidents are common because “there is no rule of law” and she promised that a National League for Democracy (NLD) government will bring in laws to “safeguard peoples’ lives and property”.
The Hpakant tragedy is not an isolated case there have been at least 36 landslides around jade mines last year alone killing many others.
Though NLD’s intentions will be good, to reign in all the players in the jade industry will be a mammoth task for the new NLD government. The two separatist rebel groups in the state – Kachin Independence Organization (KIO) and its Kachin Independence Army (KIA) – the Myanmar national army, local officials and businessmen and Chinese investors are all a web of collaborators that would like to keep it the way it is. They all benefit from the trade while the people loose out, exploited and hooked on drugs.
The Global Witness in a report published in October last year on Myanmar’s jade industry argued that the battle for control of jade revenue will be a “strategic priority for both sides in the conflict”. A 17-year ceasefire in the state’s civil war broke down in 2011 and has left over 100,000 people displaced. Thus for a novice government that is trying to come to an accommodation with the powerful army and rebel groups across the country, NLD’s hands could be tied to a certain extent.
"The question of who controls and benefits from jade needs to be addressed as part of the peace talks between the government and KIA," argues Global Witness spokeswoman Juman Kubba."Resource sharing is an important issue and transparency is key to allow real and ongoing scrutiny of what is happening.
The group’s report provided glimpses into this complex web of shadowy proxies, business fronts and companies connected to the military which are very much controlled by the top brass of the former junta. In addition there are Chinese businessmen from across the border that are heavily involved in the trade.
"According to multiple industry sources, between 50 and 80 per cent of jade is smuggled directly to the China border, bypassing the official (Myanmar) sales completely," says Kubba.
Jade is a much valued stone in China and for centuries the Chinese have had an obsession with the stone. Jade has been long associated with long life and good health in Chinese culture, making it a prized material for
good-luck charms. People of all ages receive new amulets each year based on their zodiac signs and computations of the ancient Chinese almanac. Amulets of the Buddha or various Chinese deities are sought after to wear for good luck and prosperity.
There are large Jade markets all over China with the Hualin Jade Market in Guangzhou covering an area of 10,000 square meters. Beijing also have a number of jade and pearl markets, while in Hong Kong the Jade Market in Kowloon and the Jade Street off Canton Road are very popular.
Thus it is no surprise that China’s appetite for the stone and Myanmar junta’s close relationship with its giant neighbour has fuelled this industry, especially since 2010. Myanmar has earned an accumulative $ 1.3 billion from jade stone exports to mainly China and Hong Kong between 2011 and 2014. But, this is believed to be highly under reported with nearly half of the exports estimated to be unofficial with no taxes paid to any state.
As of the end of November 2015, nearly 630 companies were engaged in the jade mining industry on 22,500 acres of land around Hpakant, according to the government. But, according to Ye Htut, the deputy head of Myanmar Gems Enterprise, most of the activity is dominated by about 10 firms, mostly Chinese-led ventures.
According to a South China Morning Post (SCMP) report in December last year, Myanmar miners have said that they cannot stand up to Chinese tycoons who buy influence and invest in modern heavy machinery like Caterpillar and Komatsu earth-excavators. These firms have successfully cornered the market, selling directly to visiting Chinese buyers they are already familiar with, according to traders.
A Myanmar Gems Enterprise official told SCMP that Chinese firms had co-opted local army commanders to secure mining concessions on their behalf, knowing they were too powerful for the local government to refuse them.“The military officers already have deals with the Chinese companies to transfer the sites to them,” said the official, who spoke on condition of anonymity.
“No one dares to touch the worksites if they are owned by the powerful people. We’ve discussed over this matter repetitively in the state parliamentary sessions. There are laws, but no one follows them and no one got punished for breaking the laws,” Sai Myint Kyaw, a Kachin state lawmaker told Myanmar Eleven newspaper recently.
The question is whether the NLD government will be willing to take them on and if they don’t, what would be the state of the new democracy in Myanmar?
* This Lotus News analysis is a a joint production with Berlin-based IDN-International Press Syndicate (IDN-INPS)