Myanmar’s jade mining industry an illicit $31-billion business

Reading Time: 3 minutes

Jade reportA new report by UK-based non-governmental organisation Global Witness reveals that Myanmar’s illicit jade trade is controlled by networks of military officials and their business allies, and had a value of up to a whopping $31 billion last year alone, equivalent to nearly half the GDP for the whole of Myanmar.

Oil and gas, long thought to be the resource-rich country’s key source of income, raked in just $4.3 billion last year. Income from jade was also 46 times annual national spending on health.

The 12-month investigation (multimedia version here, full report here) found an industry far bigger than previously thought, controlled by officials from the military, drug lords and crony companies associated with the darkest days of junta rule.

The highly lucrative industry of jade mining is complicating Myanmar’s democracy process because of a lack of transparency and the involvement of key players closely associated with the former junta government, the report said.

“Since 2011, a rebranded government has told the world it is turning the page on the ruthless military rule, cronyism and human rights abuses of the past. But jade – the country’s most valuable natural resource and a gemstone synonymous with glitz and glamour – reveals a very different reality,” Global Witness analyst and researcher Juman Kubba said.

If this vast wealth was fairly distributed among the residents of Kachin, where the mines are located, it could pull the region out of poverty and drive development of the entire country, she suggested.

“The numbers are staggering,” said Kubba, adding the country’s jade trade “may be the biggest natural resource heist in modern history”.

She also noticed that there has been a “massive escalation” in jade extraction ahead of the November 8 elections since large-scale mining resumed last September.

The sector and its players have received very little attention, partly because a web of obscure companies and proxy owners make it difficult to work out who is making money, said Kubba.

However, after extensive research Global Witness claims that “those involved in the jade trade today reads like a who’s who from the darkest days of junta rule in Myanmar”.

The families of heavyweights in the former military regime are among the biggest beneficiaries, as well as at least one Union government minister, a Union Solidarity and Development Party power broker and serving parliamentarians.

Jade network
The Jade network, including US firm Caterpillar (Click to enlarge)

Companies including Asia World, Htoo Group and KBZ are among the other players in the jade industry – in some cases through front companies – the report said. A number of Chinese individuals also reportedly play a role – either as backers for local companies, or by taking Myanmar identities – and much financing comes from within China.

Chinese import data indicates gemstone imports from Myanmar were worth $12.3 billion last year, though Global Witness believes that 50 to 80 per cent of jade is smuggled across the border. Myanmar official figures for 2013-14 put the trade at barely $1 billion.

The report also names the Coca-Cola Company, which reportedly spent more than $1 million on due diligence but failed to spot its local partner’s interests in the jade industry. Caterpillar, too, reportedly has business relations with the front man for a group of jade companies that Global Witness claims is controlled by drug lord Wei Hsueh Kang, a commander in the United Wa State Army who is wanted by US authorities.

Change is urgently needed, said Kubba. Reformers within the government have already signed Myanmar up to the Extractive Industries Transparency Initiative (EITI) – an international scheme aimed at halting corruption and abuse in the oil, gas and mining sectors.

The jade industry is also an important test of US foreign policy in Myanmar, said Kubba. The US supports EITI and has sanctions on the jade sector “imposed during the Than Shwe dictatorship to deny money and power to abusive members of the military junta”.

However, in many cases, these sanctioned individuals continue to rake in billions of dollars – as do others who are under US sanctions for their roles in the drugs trade.

A spokesperson at the US embassy in Myanmar said he had read the report, and that remaining sanctions are carefully targeted, including investment with the military, as well as a general prohibition on importing jadeite and rubies mined or extracted from Myanmar into the US, including jewellery containing such gems.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

Reading Time: 3 minutes

A new report by UK-based non-governmental organisation Global Witness reveals that Myanmar’s illicit jade trade is controlled by networks of military officials and their business allies, and had a value of up to a whopping $31 billion last year alone, equivalent to nearly half the GDP for the whole of Myanmar.

Reading Time: 3 minutes

Jade reportA new report by UK-based non-governmental organisation Global Witness reveals that Myanmar’s illicit jade trade is controlled by networks of military officials and their business allies, and had a value of up to a whopping $31 billion last year alone, equivalent to nearly half the GDP for the whole of Myanmar.

Oil and gas, long thought to be the resource-rich country’s key source of income, raked in just $4.3 billion last year. Income from jade was also 46 times annual national spending on health.

The 12-month investigation (multimedia version here, full report here) found an industry far bigger than previously thought, controlled by officials from the military, drug lords and crony companies associated with the darkest days of junta rule.

The highly lucrative industry of jade mining is complicating Myanmar’s democracy process because of a lack of transparency and the involvement of key players closely associated with the former junta government, the report said.

“Since 2011, a rebranded government has told the world it is turning the page on the ruthless military rule, cronyism and human rights abuses of the past. But jade – the country’s most valuable natural resource and a gemstone synonymous with glitz and glamour – reveals a very different reality,” Global Witness analyst and researcher Juman Kubba said.

If this vast wealth was fairly distributed among the residents of Kachin, where the mines are located, it could pull the region out of poverty and drive development of the entire country, she suggested.

“The numbers are staggering,” said Kubba, adding the country’s jade trade “may be the biggest natural resource heist in modern history”.

She also noticed that there has been a “massive escalation” in jade extraction ahead of the November 8 elections since large-scale mining resumed last September.

The sector and its players have received very little attention, partly because a web of obscure companies and proxy owners make it difficult to work out who is making money, said Kubba.

However, after extensive research Global Witness claims that “those involved in the jade trade today reads like a who’s who from the darkest days of junta rule in Myanmar”.

The families of heavyweights in the former military regime are among the biggest beneficiaries, as well as at least one Union government minister, a Union Solidarity and Development Party power broker and serving parliamentarians.

Jade network
The Jade network, including US firm Caterpillar (Click to enlarge)

Companies including Asia World, Htoo Group and KBZ are among the other players in the jade industry – in some cases through front companies – the report said. A number of Chinese individuals also reportedly play a role – either as backers for local companies, or by taking Myanmar identities – and much financing comes from within China.

Chinese import data indicates gemstone imports from Myanmar were worth $12.3 billion last year, though Global Witness believes that 50 to 80 per cent of jade is smuggled across the border. Myanmar official figures for 2013-14 put the trade at barely $1 billion.

The report also names the Coca-Cola Company, which reportedly spent more than $1 million on due diligence but failed to spot its local partner’s interests in the jade industry. Caterpillar, too, reportedly has business relations with the front man for a group of jade companies that Global Witness claims is controlled by drug lord Wei Hsueh Kang, a commander in the United Wa State Army who is wanted by US authorities.

Change is urgently needed, said Kubba. Reformers within the government have already signed Myanmar up to the Extractive Industries Transparency Initiative (EITI) – an international scheme aimed at halting corruption and abuse in the oil, gas and mining sectors.

The jade industry is also an important test of US foreign policy in Myanmar, said Kubba. The US supports EITI and has sanctions on the jade sector “imposed during the Than Shwe dictatorship to deny money and power to abusive members of the military junta”.

However, in many cases, these sanctioned individuals continue to rake in billions of dollars – as do others who are under US sanctions for their roles in the drugs trade.

A spokesperson at the US embassy in Myanmar said he had read the report, and that remaining sanctions are carefully targeted, including investment with the military, as well as a general prohibition on importing jadeite and rubies mined or extracted from Myanmar into the US, including jewellery containing such gems.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid