MAC: Mines and Communities

Burma's junta gets richer as villagers become poorer

Published by MAC on 2009-11-09

The so-called "Resource Curse" reflects a country's over-dependence on mineral extraction, as a few get rich even as the majority of citizens plunge deeper into poverty.

Perhaps nowhere is the "curse" more egregious than in Burma's Kachin state.

Here, the military junta is creaming off profits from gems and gold, workers are mercilessly exploited, and basic standards of living are drastically falling.

With tension ebbing, jade mining activities resume

Kachin News Group

29 October 2009

Jade mining has resumed in full swing in Hpakant in Burma's Northern Kachin State a couple of weeks ago, after military tension between the Burmese Army and the Kachin Independence Army (KIA) ebbed somewhat, said local sources.

With tension escalating the junta forced the jade mining companies to stop their activities in August, said residents of jade land.

Palpable tension was in evidence after the junta broke a ceasefire agreement and captured Laogai, the headquarters of ethnic Kokang rebels also called the Myanmar National Democratic Alliance Army (MNDAA) in Northeast Shan State on August 24. The Kokang is a military ally of KIA, said sources.

"Jade companies started mining activities in full swing over a couple of weeks ago. Mining activities were stopped for over two months following escalating tension between the KIA and the junta," a resident of Hpakant jade mining city told KNG.

Hundreds of jade mining companies dot Hpakant. However all jade mining activities are done under joint ventures with the military regime according to the junta's 1995 Myanmar Gemstone Law.

In keeping with the regime's law, companies have to sell their jade stones through the junta-organized regular jade emporia in Rangoon and 40 per cent of sale proceeds from every piece of jade automatically go to the regime, said jade company sources.

The Burmese junta seized Hpakant jade land and started controlling jade sales after it signed a ceasefire agreement with the Kachin Independence Organization (KIO), the political-wing of KIA on February 24, 1994. Before, most Hpakant jade mining activities were controlled by the KIO.

The last junta-sponsored gem emporium was held from June 11 to July 4 without any announcement. However, the junta earned more than 209 million Euros ($292 million) from the sale of jade only, despite a U.S. ban on its import, according to jade merchants.

Burma is one of biggest producers of jade and other gems in the world, as well as 90 per cent of rubies. It annually earns its third largest revenue from export of jade and other gems.

The junta will launch another mid-year gem emporium in Rangoon for selling quality items of jade, gems, pearls and jewelry in October-November this year, according to the Chinese state-run Xinhua.

Increasing poverty in gold and jade-rich Kachin State

Written by Kachin News Group -

17 October 2009

There is mounting poverty among people in gold and jade rich northern Kachin State, in Burma said local sources.

The state's economy depends on natural resources like gold, the world's most precious jade and timber. But it mainly benefits officers of the country's military regime, said local businessmen.

By permitting business in these natural resources, the regime and its military officers earn revenue, said local businessmen. The net income from the sale of Kachin gold, jade and timber go directly to the Burmese generals, added local businessmen.

Now ordinary people have to struggle for their daily meals because of lack of jobs and the drop in the value of the Burmese currency Kyat. It is difficult to find Kyats but easy to spend it all, said local people.

According to residents of Kachin State's capital Myitkyina, people are now receiving 24-hour electricity supply from the Buga Company owned by the Kachin Independence Organization (KIO). Yet they use charcoal for daily cooking to save on electricity bills.

There is a significant drop in customers in the town's cultural tea shops. Another problem in Myitkyina is that more people are selling goods but there are fewer customers because of lack of cash among people, said local traders

Currently, a general worker earns between 2,000 Kyat and 4,000 Kyat (US$1.9 - 3.8) after working eight hours a day. This is just about enough for two meals a day for one person, said local sources.

Kachin State is mostly populated by farmers. But now only rich farmers can barely continue with farming activities because of increased farming costs as there is no subsidy from the military government, said local farmers.

A farmer in Waingmaw Township told KNG today that the total cost involved in ploughing to harvest is around 150,000 Kyat (US$142) per acre. Every year, farmers have to sell their paddy to the Burmese Army at reduced prices fixed by the junta, he added.

The regime has put all jade and gold mining fields in the state under the Ministry of Mines. Permission to mine is given to only authorize companies following the signing of the ceasefire agreement with the local Kachin Independence Organization (KIO) in 1994.

Before the ceasefire agreement, the KIO controlled most of the Hpakant jade mining land. Then some benefits would accrue to people in the state.

An indication of economic hardship in Kachin State is the rise in the number of people, who are switching to growing poppy in Hukawng Valley, Sadung and Putao, said local sources.

An acre of poppy field produces between one Viss to 7 Viss (1Viss = 1.6 Kilograms). One Viss of opium can sell for over 10 million Kyats (over US$943) and the demand for opium is high in the state, said sources.

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