MAC: Mines and Communities

Burma's junta opens bloody auction

Published by MAC on 2007-11-16

Burma's junta opens bloody auction

16th November 2007

Despite speculation earlier this month that the Burmese military regime would - yet again - postpone its highly lucrative gems auction, the event opened last week. Early response was muted, however, as some boycotts are already taking effect, with others promised in the near-future.

It's at this event that principally Thai and Chinese buyers scoop up Burma's coloured gemstones. Many are sold on to customers in Europe, Japan and the United States, while India also serves as a cutting and polishing center.

China, Taiwan and Hong Kong are the key markets for much-prized Brmese jade, although jadeite jewelry also often ends up in the hands of customers from the US and Europe.

Meanwhile the vicious regime is bolstered to the tune of around US$300 million in foreign exchange earnings.

Signs of Slump at Myanmar Gem Sale

By THOMAS FULLER, New York Times

16th November 2007

BANGKOK, Nov. 15 — Officially, the government-sponsored gem auction that opened this week in Myanmar is a success, with 2,667 traders browsing the country's renowned rubies, jade, sapphires, and other precious stones, according to Thursday's edition of the New Light of Myanmar, the government mouthpiece.

"More merchants will arrive," the newspaper predicted.

But dealers and a trader based in Yangon, the country's commercial capital, say sales of precious stones — a financial lifeline for Myanmar's cash-strapped economy — are slumping. They say the gem exposition and auction, the first since the junta's brutal suppression of popular protests drew international criticism and the threat of Security Council sanctions, has been unusually quiet.

"Business is very slow, not like before," said U Kyaw, a gem merchant in Yangon reached by telephone Thursday.

The threat of sanctions by the United States and European Union that would specifically prohibit the import of Burmese gemstones has dented dealers' confidence, which could prove a serious problem for the junta that has ruled Myanmar for 18 years. Last year, the gem trade generated $296.9 million for the state-run Myanmar Gems Enterprise, the third largest revenue earner for the military government after fossil fuels and timber.

Adisak Thawornviriyanan, director of the Gems and Jewelry Traders Association of Chantaburi, a province east of Bangkok that is a major center for cutting and polishing Burmese gems, has taken part in the gem auctions for the past four years. But he says he decided to not to attend this one.

"We will wait and see if we can sell our old stock, but I wouldn't dare buy more," Mr. Adisak said. "We don't know how strong the U.S. ban will be."

Cartier, the Paris-based jewelry house, joined two other major brands, Tiffany and Signet, last month when it banned Burmese gems.

Jewelers of America, an organization representing 11,000 jewelry shops, about a third of the total, announced on Oct. 9 it was backing the strengthened ban on Burmese gems being considered by the United States.

The bill seeks to close a loophole in current law that allows the import of Burmese gems that are polished or cut in a third country.

It was introduced Oct. 18 and passed by the House Foreign Affairs Committee on Oct. 31 and awaits approval by the Ways and Means Committee before being submitted to the full House.

Rubies are the most popular Burmese gem in the United States, with official imports calculated as $87.4 million in 2006, mostly via Thailand, which is the main trading and polishing center for Burmese colored stones. Unofficial imports of the gems are probably much higher.

Should the Congressional measure pass, as seems likely, countries like Japan and China might make up for some of the lost sales, said Sean Turnell, an expert on the Burmese economy with Macquarie University in Sydney. Smuggling will also mitigate the effect of the boycott and trade restrictions, he said.

But drop in demand from the United States and European Union will cause prices of Burmese gemstones to drop, he predicts.

The boycotts could also crimp the ability of generals and Burmese business executives to move their assets out of the country. In the absence of a stable currency and with restrictions on holding dollars inside Myanmar, "gems perform a very important function in moving personal assets around the deck," Mr. Turnell said.

The boycotts and threat of sanctions have spawned a passionate but familiar debates over whether they are effective ways to pressure governments, as were used against the apartheid government of South Africa and the so-called blood diamonds that fueled West African civil wars.

"If the U.S. and the EU were to cease buying all Burmese gemstones, I think it would take a huge chunk out of the regime's pocket," said Brian Leber, a jeweler based outside Chicago who is leading lobbying efforts to halt all imports of Burmese gems.

Critics of the sanctions say they will hurt those Burmese miners who earn their money independently from the government, often by smuggling their gems, especially rubies, to Thailand.

"This is going to be absolutely devastating to the people that deal with gems," said Edward Boehm, vice-president of the International Colored Gemstone Association, an organization of miners, gem cutters and traders. "Most of the mining that is done is artisanal and falls out of the radar of the government."

Mr. Leber counters that the biggest beneficiaries of the gem trade in Myanmar is the military-controlled government.

"There's an argument that this is only hurting the little people," he said. "There really aren't little people who have direct control over things in the gem industry."

There is also a debate over how accurately gems can be identified as being of Burmese origin. Leber and other gem experts says rubies, unlike diamonds, can be identified by certain chemical signatures.

But Henry Ho, an influential jeweler in Bangkok who has been dealing in Burmese gems for decades, says ultimately gem trading is a business based on trust.

"Only God and the miner know where the gems come from," Mr. Ho said.

"God doesn't speak to you and the miner will lie about it."

Burma's 'desperate' military junta to sell pounds 150m gems

Thomas Bell in Kathmandu, The Daily Telegraph

15th November 2007

The Burmese junta began an auction of gem stones yesterday which could raise pounds 150 million of "desperately needed'' currency for the regime.

Burma produces more than 90 per cent of the world's rubies, almost all jade - which is highly prized in China - and is also abundant in sapphires and other jewels. The industry is closely controlled by the generals and their cronies.

The army sometimes confiscates the best gems, and the best mining sites, and uses forced labour to work them. In recent years, the regime has increased the frequency of the sales which provide Burma's third greatest source of hard currency, after natural gas and teak.

"The mere fact that this is the fifth auction [this year] shows the junta is really desperate for money,'' said Aung Naing Oo, a Burmese analyst exiled in Thailand.

Many coloured stones originate in Burma and are cut in third countries such as Thailand and India. Neither Europe or America currently bans imports of Burmese gems. The last gem sale in Rangoon, in July, was attended by five British jewellers.

Paulo Sergio Pinheiro, the United Nations human rights envoy, is on his first visit to Burma in four years, but that did not deter the regime from arresting three activists in Rangoon yesterday. Su Su Nway, a 35-year-old woman activist who had been on the run since August, was captured on Tuesday.

The Irrawaddy Magazine, published by exiled journalists, reported yesterday that a monk called Gambira, who helped lead September's protests, was arrested on Nov 4. "There is no going back. It matters little if my life or the lives of colleagues should be sacrificed on this journey. Others will fill our sandals, and more will join and follow,'' Gambira wrote in a Washington Post article.

Amnesty International claims that 700 people are being held over the pro-democracy demonstrations that gripped the country last month. The junta claims there are only 91.

Burma: Gem Trade Bolsters Military Regime, Fuels Atrocities

Importing Countries Should Ban Burmese Rubies and Jade

Human Rights Watch Press Release, (New York)

12th November 2007

China, Thailand, the United States, and other countries should completely block the purchase of gems from Burma that help finance military abuses there, Human Rights Watch said today. The group issued its call for targeted sanctions on Burma’s gem business ahead of the opening of a major gem auction in Rangoon this week.

“Burma’s rubies and jade are prized for their beauty but the ugly truth is that the trade in these stones supports human rights abuses,” said Arvind Ganesan, director of the Business and Human Rights Program at Human Rights Watch. “The sale of these gems gives Burma’s military rulers quick cash to stay in power.”

Burma’s military junta has organized the auction, which is scheduled to run from November 14 to 26 at the Myanmar Convention Center. Large numbers of precious and semi-precious stones will be on offer to the highest bidder.

Burma produces a variety of gems but is most famous for its rubies and jade. More than 90 percent of the world’s rubies originate in Burma, according to industry estimates. Burmese rubies are renowned for their dark “pigeon’s blood” color. Burma also dominates as the top producer of jadeite, a type of jade that is valued highly for its deep green hue.

The state-run Myanmar Gems Enterprise said it generated sales of nearly US$300 million in fiscal year 2006-2007. This figure represented an increase of nearly 45 percent over the previous year’s gem earnings. It qualified the company as the country’s third-highest exporter by value, after the state-run petroleum and timber companies, Myanmar Oil and Gas Enterprise, and the Myanmar Timber Enterprise.

Burmese officials have openly stated in the past that they increasingly rely on gem auctions to bring in hard currency. Regular auctions used to be held annually, but since 1992 they have taken place twice yearly. Beginning in 2004, additional “special” auctions were called to help fill the government’s coffers.

The junta controls most mining activity in the country. It has a direct ownership interest in many mines, in some cases through joint ventures with private entrepreneurs. Senior military officers reputedly arrange “private” sales of the finest gems and keep the proceeds.

Official gem sales at auction and private sales of the most valuable gems account for the major portion of Burma’s gem trade. In addition, some cross-border smuggling of gems takes place.

Burma’s gem mines are ruled with an iron hand by military authorities and mining companies. Conditions are reported to be deplorable. Access to the mining tracks is strictly limited, especially to foreigners, but reports from nongovernmental groups suggest that land confiscation, extortion, forced labor, child labor, environmental pollution, and unsafe working conditions for miners are rampant. The absence of health care and HIV prevention information and services has accelerated the spread of HIV/AIDS and drug resistant malaria and tuberculosis in mining areas.

“It is simply unconscionable for traders to help Burma’s generals sell off the country’s natural resources for their own benefit while average people are victimized and harassed,” said Ganesan. “Trading in Burmese gems bolsters the country’s military rulers at a time when they are committing serious human rights abuses, driving their people into further poverty, and rejecting calls for political reconciliation.”

The upcoming gem auction is the first in Burma since the military government violently repressed peaceful protests that began in August. It was twice postponed, purportedly due to weather conditions. Ongoing unrest and strong international condemnation of the regime may have raised fears that few traders would attend. Even after delaying the event, the government has set lower expectations for attendance than in the past.

Myanmar Gems Enterprise has said it expects approximately 2,000 foreign buyers to attend the November auction, which would be significantly fewer than attended prior auctions in March and July 2007. The March gem emporium, attended by some 3,000 traders, reportedly generated $185 million in total sales. The company said the July auction, at which 4,000 buyers were present, set a new record for jade earnings but it has not released sales figures.

The vast majority of the gem merchants who attend the Rangoon auctions are from Asian countries, especially China and Thailand. Those two countries also import the bulk of Burma’s precious stones. Burmese jade, which is popular in China, reportedly is increasingly sought after for use in products commemorating the 2008 Beijing Olympics.

Chinese buyers also purchased Burmese gems at a recent China-ASEAN Expo that took place from October 28-31 in Nanning, in southern China. According to a report in the Myanmar Times, Burma’s gem sales at the four-day event amounted to 200,000 yuan (US$27,000) per day.

Thailand is the main importer of Burmese colored gemstones, which are cut, polished, and re-exported to customers in third countries. Burmese gems typically are sold on to retailers in Europe, Japan, and the United States. India also serves as a cutting and polishing center. A considerable number of the highest-quality and most expensive stones are exported to Switzerland for onward sale to the US or other markets, according to industry sources.

On October 15, the European Union imposed new sanctions to block the import of Burmese precious and semi precious stones, along with other measures.

In the US Congress, pending legislation would ban the purchase of Burmese-mined gemstones, closing a loophole in existing US sanctions that allows gems from Burma to be sold in the US if they have been processed in a third country.

A few jewelry retailers, notably Tiffany & Co. and Leber Jewelers, have long refused to purchase gems of Burmese origin. In reaction to the bloody crackdown in Burma that began in August, several European and US jewelry companies – including Bulgari and Cartier – also have voluntarily pledged to boycott Burmese gems.

In October 2007 the Jewelers of America, an industry association, issued an unprecedented call on Congress to fully ban Burmese gems and encouraged its 11,000 members to halt purchases of these gems until democratic reforms are underway. Other industry associations – one in Canada, a second association in the US, and an international jewelers confederation – also have supported similar moves.

“The governments and companies that have stopped buying Burmese gems deserve credit for not supporting human rights abusers,” said Ganesan. “The rest have the blood of Burmese on their hands.”

To read the October 2007 Human Rights Watch statement, “Burma: Foreign Investment Finances Regime,” please visit:

For additional Human Rights Watch reporting on Burma, please visit:

Press Release-Burma Gemstone Ban

Leber Jewellers

10th October 2007

Chicago, Illinois

Leber Jeweler Inc. has written letters to several key members of US Congress requesting they take immediate steps to prohibit the importation of gemstones mined in Burma into the United States. While the Burmese Freedom and Democracy Act of 2003 specifically states that “no article may be imported into the United States that is produced, mined, manufactured, grown, or assembled in Burma”, current US Customs regulations allow for Burmese gemstones to be imported into the United States.

Gemstones are Burma’s third largest export, officially listed at close to $300 million USD. Burma produces a wide range of colored gemstones, with over 90% of the world’s rubies originating in this country. At present, the Burmese military government holds a majority share in every gemstone mining project, issues all relevant licenses and permits, as well as runs the gem auctions held in Rangoon.

The letter formally requests "all members of Congress to work to prohibit the importation of any gemstones mined in Burma. Doing so will deprive the regime of much needed cash and will strengthen the efforts that we all hope will one day lead to a free and democratic nation of Burma."

As part of Leber Jeweler Inc's goal of advocating on behalf of a range of human rights and environmental issues facing the jewelry trade, in 2002 the company implemented a policy of not purchasing any gemstones known to have originated in Burma.

For inquires please contact: Brian Leber

Burma's Blood-colored Gems

The Irrawaddy

16th November 2007

Burmese rubies are indisputably the world's finest, but their rich red hue is reminding an increasing number of international gem dealers of the bloody suppression of democracy advocates by Burma’s military junta.

The regime’s brutal crackdown on September’s demonstrations has renewed calls to boycott precious stones exported and smuggled out of Burma, one of the world's top gem producers.

"There is a growing awareness that it is a fascist regime," said Brian Leber, an American gem dealer pushing for a boycott of "blood rubies."

"Considering what this regime has done to its own people, we're troubled to see that a precious stone is offering such a great source of cash for them," he said in a telephone interview from the Chicago suburb of Western Springs, Illinois.

Organizing a boycott would prove difficult, however. More than 1,500 people from some 20 countries registered for a gems auction that opened in Rangoon on Wednesday, despite the boycott calls.

"The trade in these stones supports human rights abuses," the New York-based Human Rights Watch said in a statement this week. "The sale of these gems gives Burma's military rulers quick cash to stay in power."

The ruby trade certainly puts money in the pockets of the junta, which controls mining concessions, but it’s difficult to assess just how much they earn in view of the secrecy shrouding the gems trade.

In 1964, Burma introduced an annual gems auction, which became a biannual event in 1992, and later spawned a third annual sale.

The government boosted trade still further, and moved to combat smuggling, by enacting the New Gemstone Law in 1995, allowing people in Burma to mine, produce, transport and sell finished gems and jewelry at home and abroad, as long as they paid tax on their earnings.

Nevertheless, most rubies are trafficked as rough stones dug out of mountainsides in the Mogok and Mong Hsu mining areas of northeast Burma. From there they travel a long, perilous journey over mountains, through jungles and insurgent-prone areas, changing hands several times on their way to Thailand.

There, the rough stones are heat-treated with chemicals at high temperature for long periods to bring out the brilliance of the color and clear away small cracks.

Once cooked, cut and polished, the gems are sold to foreign buyers who in turn sell them to jewelers around the world.

On the journey from mine to the world's ritzy jewelry shops, the gems change hands four to six times, with the price increasing 20 percent to 30 percent with each change, dealers in Thailand said.

The biggest price jump depends on the success of the heat enhancement. If done carelessly, the process can split the stone and make it almost worthless; handled correctly, a ruby can be worth more per carat than a diamond.

The biggest and best stones can fetch millions of dollars or euros at auctions. Christie's auction house, on its Web site, lists a ring set with an 8.62 carat ruby which sold for US $3.6 million—or a record per carat price of $425,000—in February 2006.

The vast majority, however, are stones of up to 2 carats which miners in Burma sell for just a few dollars and end up in jewelry shops with price tags ranging from a few hundred to several thousand dollars.

Gem smugglers bypass the state-owned Myanmar Gem Enterprise that oversees the industry and runs the auctions in Rangoon. Myanmar Gems Enterprise said it generated sales of nearly $300 million in fiscal year 2006-2007, according to Human Rights Watch.

Jade is the biggest earner, with more than 90 percent sold to China. Rubies are a distant second, with 85 percent of them going to the US, EU countries and Japan. Burma also exports sapphires and pearls.

Dealers in Bangkok estimate the generals earn at least $60 million annually from gems, but some say the amount could be 10 times that.

Whatever the figure, a growing number of dealers want to deny the junta any windfall from rubies.

But imposing sanctions would be fraught with problems. The industry would have to ban the trade in rubies almost altogether for the embargo to work, said P J Joseph, a teacher at the Asia Institute of Gemological Sciences, a school and laboratory in Bangkok.

"Things are stacked against the embargo working,” he said. The generals are pretty used to divide and rule, and it will be difficult to get all countries involved. China, India and Southeast Asia are the key." But countries in the region would probably not join an embargo, he added.

Arnold Silverberg, who owns AJS Gems in Bangkok, said an embargo hurts small dealers and outlets.

"The amount of money the generals get from gems is minuscule compared to the money they get elsewhere,” he said. “The generals don't give a damn, they have all the money in the world."

Silverberg claimed those pushing for a boycott "are just trying to make themselves feel good. But we're starving the people, not the generals. I feel bad for the Burmese people."

Jewelers of America supports a ban on Burma rubies, advising its more than 11,000 members to "to source their gemstones in a manner that respects human rights," the group's president, Matthew A Runci, said in a statement released last month.

Sanctions haven’t worked well in the past, dealers point out.

American companies stopped buying rubies in 2003, when the United States banned imports of all Burma products under a law enacted in reaction to the ruling generals' human rights abuses.

The following year the US Customs Department created a loophole, exempting gems cut or polished in other countries from the ban. More than 90 percent of Burma's gems are exported in rough form.

Most colored stones from Burma are cut and polished in Chanthaburi, Thailand, a global gem center.

But even during the total ban on Burma gems, many passed under the radar by being sold as coming from Vietnam or Sri Lanka. When the loophole was introduced they started being Burma rubies again.

Despite such problems, Leber disagrees with the boycott opponents: "It's not a question if it's going to be effective. It just feels wrong to sell rubies from Burma."

A photo slideshow accompanies this article at:

Gem Traders Unfazed by Burma Turmoil, Auction Postponed

Business Week, Hong Kong

8th November 2007

After the bloody September crackdown on dissidents, Buddhist monks are again on the march in Burma, denouncing the military government. As the crisis deepens, Western opponents of the military regime have singled out China for criticism, charging that Beijing props up the junta through purchases of fuel resources. However Chinese businessmen in Hong Kong and the mainland provide another, less visible form of support: trade in jadeite gemstones. The export of jadeite from Burma to Hong Kong and China, which has been going on for decades with little media scrutiny, is worth about $433.2 million a year, official figures for 2006 show.

That's 10% of the country's total exports, making jadeite sales vital to the Burmese government. And the figure doesn't include the hundreds of millions of dollars raised from sales of smuggled goods to Hong Kong and China. Where official sales are concerned, two departments of the regime at present conduct six auctions a year, selling hundreds of millions of dollars worth of rough stones and polished pieces of this rare, more highly valued form of jade.

But future sales are now in doubt. One of the organizers of the auction, the Myanmar Gems Enterprise (MGE), a unit of the Ministry of Mines, has already twice postponed its upcoming auction, which was originally scheduled for the last week of October. Although no official reason has been given, traders in Hong Kong speculate that the delay is a result of the country's political turmoil; the authorities, they believe, do not want foreigners entering the country while unrest continues.

A fax sent by the Burmese Consulate to a Hong Kong jadeite trade association says "the auction [will be] suspended for a week.from 14 November to 26 November." Kwok Man Chan, chairman of the Hong Kong Jade Assn., says the new schedule has not yet been confirmed by the consulate.

Certainly, some companies are not eager to conduct business-as-usual with the Burmese regime following the crackdown against peaceful demonstrations led by Buddhist monks in September. For instance, Cartier has announced that it will stop buying gemstones mined in Burma. And the Jewelers of America, a national association of jewelers, has urged Congress to amend a law enacted in 2003 that bans all imports from Burma, because the ban has a loophole allowing gemstone traders to import Burmese gemstones if they have been cut and polished elsewhere.

Still, while the gemstone boycott is likely to subject any trade link with Burma to intensifying scrutiny, executives from several Hong Kong jadeite companies say they are not worried. Provided the political situation in Burma does not worsen, Hong Kong traders will continue purchasing rough jadeite at auctions in Burma and selling the jewelry in Hong Kong and China, they say. "Business and politics should be separate. We're just businessmen and not politicians," says Kim Wing Yau of Kam Wing Cheong Jewelry. A 30-year veteran of the jadeite trade, Yau is a former chairman of the Hong Kong Jadeware Trades Industry & Commerce Assn.

The main jadeite jewelry markets are in China, Hong Kong, and Taiwan. And the Rangoon regime has leverage, since Burma is the only country in the world with deposits of the gem-grade jadeite so highly coveted by Chinese consumers. Apart from the highly prized green variety, jadeite is available in a broad range of colors, such as yellow, lavender, black and white. Moreover there are several categories, like "icy" and "glass," that denote the stone's varying levels of translucence.

In 2005 the Burmese government declared jadeite a "national treasure" and mandated that all jadeite sales be centralized through auctions organized in Rangoon by the MGE. Because of the rising demand for jadeite from consumers in China, the junta has increased the number of MGE jadeite auctions to four from two.

A consortium called the Union of Myanmar Economic Holdings (UMEH) also holds two auctions annually. (The UMEH and the Myanmar Economic Corporation are the two major industrial conglomerates controlled by the armed forces, dominating key economic sectors. Shares of UMEH are reserved for the military establishment.) Around three thousand buyers attended the July auction, according to Hong Kong Jade Assn. Chairman Chan, with over 70% coming from China. The rest are mainly from Hong Kong, Chan adds.

Trading through unofficial channels has continued. Yau of Kam Wing Cheong says many visiting Burmese traders peddle stones from shop to shop on both sides of Canton Road, the strip in Kowloon's tourist district that is Hong Kong's jadeite trading center.

The postponement of the jadeite auction has not caused any panic in the Hong Kong trade. Since many large jadeite companies in Hong Kong bought large stocks of stones when availability was low, and hung on to them as an investment, they are not concerned about short-term supply fluctuations. "The supply has been so strong that prices of jewelry with medium- and lower-grade jadeite [up to $4,000 per item retail] are flat," says Yau. "Availability of jadeite has increased so much in recent years as mechanized mining methods have become widely used."

Traders have other sources of jadeite, too. Samuel Kung, owner of the eponymous Hong Kong trader and retailer, says that although the company purchases jadeite at the MGE's auctions, 90% of its goods come from from private companies in Burma, Hong Kong, and China. That provides them with a cushion even if the auctions don't resume soon. And even if the political situation in Burma worsens so much that Hong Kong traders are unable to purchase rough stones at the auctions, supply won't dry up altogether. "There are many visiting sellers and we have good connections with suppliers with huge stock," says Kung. "Although the political situation is delicate.we have established good relations with the [Burmese] people," he says.

Kwok Man Chan of Shiu Lun, a wholesaler and retailer, thinks that if the military government in Burma continues to postpone the auction for several more months, many traders will benefit as they reduce excess inventory. "This should have positive impact on the market as the demand will outstrip the supply and prices will increase," he says.

However prices are likely to tumble if the government suspends the supply for more than a year. Many miners in Burma are independent companies that have taken out concessions from the government and have to keep producing in order to amortize their investment in mining gear. They "are doing mechanized mining in a systematic manner and some mines are in operation 24 hours a day. Stock builds up very quickly. And if the suspension of jadeite exports continues for an extended period, prices will drop when [the ban is lifted and] the accumulated stock floods the market all at once," Chan says.

Despite the negative publicity Burma is generating in the West, Hong Kong jadeite companies interviewed say they are not worried since the main market for jadeite is in Asia, particularly China and Hong Kong. Chan of Shiu Lun reckons that the U.S. and Europe together account for less than 1% of the global jadeite market. Shiu Lun operates an outlet in an upscale Hong Kong shopping mall which sells to consumers from the U.S. and Europe. "None [of them] has discussed the political situation in Burma," he says.

At Kam Wing Cheong, Yau says the company has held a large stock of jadeite and does not plan to replenish it yet. "However we will buy rare, fine-quality [stones] when we come across them," he says. "We will not stop purchasing stones in Burma because of the political situation. The political chaos did not start with the junta; the country has been plagued by the conflicts with ethnic minorities for years. This is totally out of our control."

'Rubies are red with the blood of Burma's young'


8th October 2007

THEY have decorated the headdresses of maharajas, the bellies of courtesans and the fingers of the world's affluent. The rubies of the Mogok valley in upper Burma are cherished for their clarity, quality and the lush red hue known as "pigeon's blood". Yet, as the trade funnels millions of pounds each year into the coffers of the military junta, campaigners now argue the rubies are red with the blood of the people.

While Leonardo Di Caprio and Hollywood have helped educate the public about "blood diamonds" - gems mined in war zones and sold secretly to finance insurgency or a warlord's army - there is a growing demand to have the precious stones of Burma rebranded as "blood rubies" and subject to the same boycott.

In light of the Saffron revolution led by Buddhist monks and the subsequent violent crackdown on the democratic movement by the military government, pressure groups outside Burma are critical of a trade they insist is built on the back of oppression and abuse. "It's said 95 per cent of all rubies come from Burma, so if you see a ruby in a shop, it's gone through the hands of the Burmese generals and is helping to pay for the soldiers and guns on the streets of Rangoon," Mark Farmaner, the acting director of Burma Campaign UK, said.

Debbie Stothard, of the Alternative ASEAN Network on Burma, said conditions in the country's mining operations were horrendous, with owners hooking employees on drugs to improve productivity, and where shared needles are common and AIDS rife.

She said: "Heroin is given to people at the end of the working day as a reward. Young people go off to the mines with big hopes and dreams, and they come back to die. These rubies are red with the blood of young people."

Burma's generals are estimated to have earned about £400 million since they began holding official gem and jade sales in 1964. A far bigger number of precious stones are smuggled over the border into Thailand and China. The official expositions, held twice a year in the tropical heat of Rangoon, are still increasingly popular. More Chinese bidders are attending, attracted by slabs of jade.

Last week, the European Union said it would consider a trade ban on Burmese gemstones, but for the moment there are no such restrictions. However, there is evidence of growing doubt about the morality of trading in such precious stones.

Eric Smith, the co-owner, with his wife, of Eric N Smith, a jeweller in Glasgow, said he was seeking a Burmese ruby for a client who had been insistent on its point of origin.

"Burmese ruby is considered the finest in the world," he said. "Each year, I travel to Bangkok and buy from small family traders who risk their lives to come over the border and sometimes have only two or three stones. The question is, do you cut off them and their families? It's difficult. Until now, no-one has bothered about Burma. It was known to be a topsy-turvy country, but in recent weeks, the conditions have been brought home to us. When I return in February, I will be having second thoughts about what to buy. It is a moral concern."

The ruby market in Britain is exceedingly small, with experts estimating it at no more than 1 or 2 per cent of a £3 billion jewellery business dominated by gold and diamonds. Jack Ogden, the chief executive of the Gemological Association of Great Britain, said: "It has always been said that Burma accounts for 90 per cent of the world's ruby, but this is taken from old text books of the 1930s. Now it can come from Afghanistan, Tajikistan, Cambodia and Madagascar."

The Mogok valley is the traditional home of Burma's ruby mining. One recent visitor was Ted Themelis, a geological consultant, and author of Gems & Mines of Mogok, an in-depth study of the region.

Mr Themelis, who is based in Thailand, told The Scotsman the situation there was far more complex than the image presented by protesters. He insisted that, under a deal thrashed out with the military government, former insurgents among Burma's large minority ethnic groups, such as the Shan, Lisu, Palaung and Karen, were given concessions over the gem mines, with 50 per cent of the proceeds going to the government. In November 2003, there were 1,250 licensed mine work sites, while in 1999 there were 850 different registered companies. As there is little mechanisation in the area, the panning, tunnelling and digging of pits is performed by hand, with children as young as 12 taking part. There are about 35,000 miners in the area, who live in camps and earn commission on their finds.

"The work is difficult, but it's not so bad," Mr Themelis said. "What else are they going to do? Grow poppies? At least this is positive. I don't agree with a boycott - the only people this will effect will be the workers. The generals in charge will just find a way around it."

Yet Philip Dundas, of the Scottish-based Burma Educational Scholarship Trust, insisted the situation was far more serious. "Burma has a long history of using forced labour, of getting people addicted to drugs so they cannot leave, and I find it hard to believe that this is not the case in the gem mines," he said.

In Thailand, where the majority of Burma's gems are bought and sold, the stone merchants have yet to be put off doing business with the junta. Pornchai Chuenchomlada, president of the Thai Gem and Jewellery Traders Association, said: "People are unhappy about what's going on, but they are not angry enough to stop buying rubies. If they killed a lot of people like they did in 1988, we might consider banning their products."

The ripples of concern among a few British jewellers, such as Eric Smith, have not yet generated a tide demanding change, according to Geoff Field, chief executive of the British Jewellers Association.

He said he had not been contacted by any members wishing to discuss Burmese rubies, and added: "There has been discussion in chat rooms among members who say they wish to continue to support the small self-employed traders they have been dealing with for years."

In the valley of Mogok, the rains still fall and the mines are largely silent, but in November, when the clouds pass, they will again echo to the sound of hammer and chisel and the scraping of dirt. In literature, the ruby has often been used as symbol of virginity, but in Burma, nothing about the gem business is pure. As Philip Dundas said: "At what price do we wear beautiful things?" Mogok valley's gems highly prized for their purity and hue

A RUBY is a variety of the mineral rock called corundum, also known as aluminium oxide. The colour comes from chromium.

The mining of Burmese rubies stretches back thousands of years and has traditionally been centred on the Mogok area about 200km north of Mandalay, which is known as the "valley of the rubies".

The crimson stones have been dug from the ground at Mogok since prehistoric times and were previously a source of wealth for Britain during the age of Empire.

Mogok's rubies occur in marble. Millions of years of weathering has freed the stones, washing them down from the hills to the valley floors, where they have settled in the bottom of the streams and rivers.

They are freed from the gravel by panning, tunnelling and digging by hand. There is little mechanisation of the mining.

The gems from Mogok are prized for their purity and hue. The Burmese word for ruby is padamya which translates as "plenty of mercury".

The Burmese call their gems "pigeon's blood ruby" because of the deep red-magenta hue which is similar to freshly drawn arterial pigeon blood. The colour is also often compared to the hue of a pomegranate seed.

They are sold in markets in Mogok; however, foreigners require special permits to visit the town, and the purchase or export of gems at non-government licensed dealers is illegal.

Traders say a ban on Burmese rubies introduced in the US three years ago has been widely ignored and that the rare gems are more sought after than ever.

Last year, an 8.62 carat Burmese ruby fetched a record price of $3.7 million when it was auctioned by Christie's.

BURMA: China Has Much at Stake

Analysis by Antoaneta Bezlova

1st October 2007

BEIJING, Oct 1 (IPS) - Jarring against a dearth of official news about the turmoil in Burma, the ‘Southern Weekend’ -- one of China’s more liberal official newspapers -- has chosen to run a lengthy feature about an ethnic Chinese entrepreneur striking it rich in the jade business in that neighbouring country.

But the feature was curiously apt. Describing the country as the "jade kingdom on earth" where fortune is easily made as long as one is hard-working, the article effectively perpetuated a centuries-old perception here of Burma here as a country of riches from which successive Chinese dynasties commanded a tribute.

Tellingly, the weekender article steered around Burma’s current state of turmoil and the brutal suppression by the military junta of peaceful demonstrations led by Buddhist monks.

The event eerily resembles China’s own suppression, in 1989, of student-led democracy protests. And it comes at a time when Beijing is preparing to hold the 17th congress of its ruling Communist Party and is wary of anything could jeopardise the country’s fragile social stability.

However much the official Chinese press chooses to ignore popular calls for political change in Burma, China’s rulers have a long history of involvement in the country’s fortunes and hold a unique capacity to influence its future.

Going back 800 years to the Yuan Dynasty, the Mongol rulers of China invaded Burma three times. There were two more invasions by the succeeding Ming Dynasty. And under the sway of the last imperial dynasty, the Qing, Burma came to be regarded as a vassal state whose kings were regularly sending tributary missions to Beijing along with gifts of elephants.

This traditional patron-vassal relationship became fiercely ideological under the reign of China’s communist Chairman Mao Zedong (1949-1976) when Beijing wanted to establish itself as the leader of a world revolution and take over the leadership of the communist movement from Moscow.

Under Mao, China financed and trained long-running insurgencies over the whole of South-east Asia. In Burma, it supported the now defunct Burmese Communist Party, which several times came close to winning power.

Over the years the Chinese grew to dominate Burmese trade in many commodities, including rice. Resentment sometimes exploded into anti-Chinese riots. Chinese shops and warehouses were ransacked and Chinese homes burnt down.

Such anti-Chinese riots gave China an excuse to invade Burma in 1968. In an undeclared war, that was little noticed because it took place during the Tet offensive in Vietnam, Beijing sent 30,000 heavily armed troops who rapidly occupied swaths of the country and forced the government of Gen. Ne Win to negotiate.

But the effort to spearhead a communist revolution across the region and the cost of subsidising large-scale insurgencies like that in Burma had exhausted communist China -- itself impoverished and starving.

The death of Mao in 1976 signalled the end of an era of ideological crusades and failed industrial campaigns. China assumed a low profile in international affairs and concentrated on rebuilding relations and gaining an economic foothold in the region.

Since 1990 China has been the only big country backing the military junta that rules Burma, supplying it with aid and arms. Observers reckon Beijing has provided the generals with more than two billion dollars worth of arms and ammunition. In return, China has received teak and gems, promises of Burma’s oil and gas reserves through a planned pipeline and access to a large market for its cheap consumer goods.

Around a million Chinese are said to have migrated to Burma, dealing in trade, constructing dams and laying a road that, when ready, will stretch from the Chinese border across Burma to its shores. Isolated by western countries, Burma’s rulers have become ever more dependent on trade with China. Two-way trade doubled between 1999 and 2005 to 1.2 billion US dollars.

Protecting its investments and business interests, China has also come to play the role of Burma’s staunchest supporter at the United Nations. It has consistently resisted action against Rangoon, insisting that its behind-the-scenes political negotiations work better with the regime than imposing sanctions.

While the international community deplored the bloodshed in Rangoon and other cities last week, China blocked calls for a strong statement condemning Burma’s repressive actions. China’s U.N. ambassador Wang Guangya told the media afterwards that the situation in Burma did not "constitute a threat to international and regional peace", the formal threshold needed for Security Council action.

Yet despite appearances of inaction on Beijing’s part, foreign diplomats here believe China would seek to exert pressure on the Burmese military to prevent a repetition of the 1988 massacre, when 3,000 peaceful protesters were killed by the army.

"The stakes are too high for China," said one Western diplomat. "They have been criticised for remaining passive in Sudan for far too long and don’t want to have another Darfur crisis unfolding right at their doorstep".

The approach of the 2008 Beijing Olympics has brought heightened international scrutiny on China and its leaders are loath to see the preparations marred by any association with a Burmese massacre that some are already calling the "Asian Darfur".

In meetings with Burmese leaders last month, Chinese diplomats were unusually forthright about the possibility of violent suppression of peaceful protests that were gathering momentum in Rangoon and other cities.

"China, as a friendly neighbour of Myanmar (Burma’s formal name as used by the junta), sincerely hopes Myanmar would restore internal stability as soon as possible, properly handle issues and actively promote national reconciliation," the Xinhua News agency quoted state councillor Tang Jiaxuan as telling visiting junta leader Gen. Than Shwe.



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