Myanmar's jade trade 'worth $43b but locals are dirt poor'

The jade industry in Myanmar's Kachin state is worth up to US$31 billion (S$43.2 billion) annually, but it mostly benefits a few powerful military officials and cronies, while locals in the remote area long suffering from conflict remain dirt poor, a report by the investigative organisation Global Witness says.

Released yesterday in Yangon, the report, titled "Jade: Myanmar's Big State Secret", argues that the United States and Myanmar's other partners should benchmark lifting of sanctions and future aid to reforms in the country's jade industry - including sharing control and benefits more equitably with locals in Kachin state, and making businesses more accountable.

The report, based on a 12-month probe and some 400 interviews, charges that the jade trade is "secretly controlled by networks of military elites, drug lords and crony companies associated with the old military regime" and is equivalent to almost half the GDP of the entire country. The scenario it paints underscores the fact that the long-running conflict between Kachin and government forces is as much over natural resources as over political and ethnic rights.

"Jade is a significant driver of Myanmar's most serious armed conflict, between the central government and the Kachin Independence Army/Kachin Independence Organisation (KIA/KIO)," the report says.

In answer to a query by The Straits Times on whether the KIA/KIO were also involved in the jade trade, Global Witness replied by e-mail that they were.

"It is their main source of revenue," it said. "They have a rudimentary taxation system but they also have a problem with corruption within their ranks ."

But Global Witness said it is focusing on government-licensed companies because "they appear to be making the lion's share of the profits, are responsible for most of the illegal and destructive activities associated with the jade business and they are vehicles for political hardliners and drug lords".

"From what we can see, the government-licensed companies are, in a number of significant cases, controlled by people who have the motivation and means to keep the conflict going until long-term government control of the jade mines can be assured," it said.

Global Witness analyst Juman Kubba said "Myanmar's jade business may be the biggest natural resource heist in modern history", noting that US$31 billion was over 46 times Myanmar's national spending on health. Local populations saw little benefit from the trade. Conditions around the mines are dangerous, drugs and prostitution are endemic and "those who stand in the way of the guns and machines face land grabs, intimidation and violence", the report said.

The jade mines go largely unreported by the media. Hpakant, the hub of the mining zone, is out of bounds to foreigners. But Al Jazeera television succeeded in filming there last year, revealing a jade route lubricated with bribes.

Thousands of poor people sift through stone rubble every day in the hopes of finding that one piece of rock. Accidents are common. This year alone several have died on the near vertical slopes of rubble, killed by landslides.

Myanmar is gearing up for a watershed general election on Nov 8, and a new government is expected to be in place early next year. The report urges Washington to use its leverage to work with the next government to "help take the jade out of the hands of the military, cronies and drug lords". But with powerful vested interests in the status quo and an uncertain political landscape ahead, reforming the jade industry will be a tall order, analysts say.

nirmal@sph.com.sg

This article was first published on October 24, 2015.
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