Myanmar’s jade trade is worth as much as half the country’s entire official economy and is benefiting top figures in the military and politics, according to new research released on Friday.
Annual production of this green gemstone prized by China’s rich is much higher than previous estimates and could be as large as $31bn, claims a report published by Global Witness, a UK-based campaign group, ahead of Myanmar’s elections next month.
The secrecy, smuggling and human rights abuses in the jade industry show the limits of reform in the fast-changing Southeast Asian country, says Global Witness. Some individuals allegedly linked to the trade also have relationships with leading international companies including Caterpillar, the truck and digger maker.
“Since 2011, a rebranded [Myanmar] government has told the world it is turning the page on the ruthless military rule, cronyism and human rights abuses of the past,” says Juman Kubba, a Global Witness analyst. “But jade — the country’s most valuable natural resource and a gemstone synonymous with glitz and glamour — reveals a very different reality.”
The big gap between the official size of the jade industry in Myanmar and the estimates highlights concerns over the illicit trade that has already prompted an official crackdown at the country’s showpiece annual gem emporium.
Global Witness says it bases its estimate of possible Myanmar official jade production of $31bn last year on multiple industry sources who said 50-80 per cent of the gems are smuggled directly over the border to China.
The Middle Kingdom’s official jade imports were almost $12.3bn last year, while Chinese customs data suggest less than a third of Myanmar’s official production of the stones crossed the frontier legally.
Sean Turnell, an Australian academic specialising in Myanmar who has advised Aung San Suu Kyi, the opposition leader, as well as government reformers and western countries, says he and most other commentators have “underplayed the jade story” relative to other official income sources such as energy.
He says: “There seems little doubt, for instance, that jade has been by far the biggest source of foreign exchange flows into Myanmar in many of the last few years.”
Jade has long been coveted in China for its delicate colours, elegant patterning and associations with spiritual ideas such as immortality. But the murky trade, much of it from mines in Myanmar’s conflict-racked northern region, is still under sanctions prohibiting imports to the US.
Companies linked to the family of General Than Shwe, the last Myanmar junta leader, earned $220m from the annual gem emporiums held in the country in 2013 and 2014, Global Witness claims, although it makes no allegation of wrongdoing about those deals. General Than Shwe, who ruled Myanmar for the concluding 19 years of almost half a century of military rule, could not be reached for comment.
Global Witness claims present-day politicians who are tied to the jade trade include Ohn Myint, a former army commander who is now the minister for livestock, fisheries and rural development. Global Witness says a company named Myanmar Win Gate Gems and Jewellery Mining is owned by members of the minister’s family and sold a single 24kg piece of jade at this year’s gem emporium for almost $40m, although again no wrongdoing is alleged in the sale.
Win Gate did not respond to questions. Mr Ohn Myint could not be reached for comment.
Global Witness also focuses on Zaw Bo Khant, a businessman whom it claims operates a jade mining company. That business is said to be part of a network controlled by Wei Hsueh Kang, who has a $2m US government bounty on his head over his alleged involvement in drug trafficking.
Mr Zaw Bo Khant has separate business interests in a Myanmar dealership selling Caterpillar products. He has posted pictures of himself on social media on visits to company facilities in Australia and Europe. He has also described how he drank champagne at the Eiffel Tower and shopped for a Rolex watch during the trips.
Mr Zaw Bo Khant denies he has any relationship with Mr Wei Hsueh Kang, adding that he obeyed Myanmar’s laws and regulations. He says Caterpillar “never gave me any gifts, but we play golf”.
Caterpillar says it had “robust screening procedures” to ensure it did not violate any export control laws. It says “courtesies” given to Mr Zaw Bo Khant when he visited Caterpillar facilities were in line with the company’s code of conduct and were not “excessive, lavish or improper”.