Angshuman Choudhury

Myanmar, also known as Burma, is a country with many names. Yet, ‘land of jade’ remains the most evocative of all, at least for the distant observer. But, behind this otherwise benign sobriquet, thrives a murky world of exploitation and highhanded subversion.

A seminal 12 months-long investigation by the British NGO, Global Witness (GW), reveals the nasty face of Myanmar’s jade mines: slush-filled, begrimed stretches of uneven land dotted with diminishing rock hills, rumbling heavy machinery, and armed personnel in military fatigues. Very tellingly, Burma’s jade is a gem shackled in the unenviable politics of blood and corruption, not unlike the diamonds of Africa.

What, really, is the story of Myanmar’s precious green stone?

Stone In The Dark

Myanmar holds in its womb the world’s largest deposits of jadeite, a high-value ore that yields jade, a green ornamental gemstone famous world across, and particularly in China where it is popularly known as the “stone of heaven”. While jadeite deposits in Myanmar are spread out across the country in Lone Khin (Kachin State), Hkamti Township (Sagaing Region), and Mogok (Mandalay Region), the largest ores are concentrated in the country’s remote north, in and around Kachin State’s Hpakant Township.

The Burmese jade industry is massive in scale and scope: according to GW, jade worth $31 billion – nearly half of the country’s Gross Domestic Product (GDP) – was mined in 2014 alone, while annual profits amount to nearly $40 billion. In the first quarter of the current fiscal year, Myanmar earned $23 million from jade exports, mostly to China and India. A mere kilogram of the stone can fetch millions in overseas markets.

But, a large fraction of this lucrative industry operates within the confines of a sprawling black economy controlled by the country’s postcolonial elite, secretive companies owned by the military, and local drug lords. In fact, GW has called it the “biggest natural resource heist in modern history.”

The GW investigation, presented through several multimedia reports including a 7-minutes long documentary called Jade and the Generals, unapologetically unravels the full scope and nature of Burma’s nefarious jade business. The elaborate investigation – called ‘Jade: Myanmar’s Big State Secret’ – reveals an unscrupulous past, an evolving present, and a contested future for the country’s most precious natural resource.

The Burmese jade industry is massive in scale and scope: according to GW, jade worth $31 billion – nearly half of the country’s Gross Domestic Product (GDP) – was mined in 2014 alone, while annual profits amount to nearly $40 billion.

Besides cronyism and vested profiteering by domestic stakeholders, the nefarious jade industry has thrived on unyielding demand from China where the gemstone features as a prime luxury product in popular culture. China’s imperial fascination with jade has continued through the ages till this date, with most of the rough jadeite extracts from Kachin ending up in the hands of nondescript Chinese producers.

However, none of this happens legally, as exporters routinely bypass existing customs and export tax regimes. According to GW’s findings, $6.2 billion worth of mine site tax was lost in 2014 alone. But, very few in the region even know what transpires in these rocky, marshy mines.

Clearly, what happens in Kachin’s jade mines stays in the mines.

Stone in Shackles

Burma’s jade mining is a heavily ghettoised affair. Since the Tatmadaw (military) forcefully wrested control of the Hpakant mines from the powerful Kachin Independence Army (KIA) in the early 1990s, inconspicuous companies with links to the army – once the dominant organ of the Burmese state – have remained at the helm of extracting the precious stone. These include conglomerates like the military-owned Myanmar Economic Holdings (MEH) and the defence ministry-owned Myanmar Economic Corporation (MEC).

Clearly, what happens in Kachin’s jade mines stays in the mines.

To be more categorical, a large part of the trade is tightly controlled and protected by families of top generals from the erstwhile junta that ruled Myanmar for six decades, including former Prime Minister, Than Shwe, and senior minister in Kachin State, Ohn Myint. Most of these shadow businesses are shielded from public view via front companies and shell entities based in Mainland China, Hong Kong, and Taiwan.

“Most of the jade companies are connected to the army. It is very obvious that the army is protecting the jade business and trying to control the land,” the head of Kachin Baptist Organisation (KBO) is heard saying in Jade and the Generals.

The existence of these subcutaneous profit-making entities has created a toxic shadow economy in the region, one that is grossly extractive, corrupt, invasive, and reckless in nature. The gargantuan profits, which seem to flow in only one direction (outward from Kachin), have served little for the region’s upliftment and only deepened the pockets of a select group of powerful elites. The largely non-competitive economy is premised on a well-guarded monopoly wherein the dominant stakeholder – the Tatmadaw – keeps outside entities at bay through both direct and institutional violence. For the powerful men behind the jade trade, “outsiders” is a broad category that includes journalists, recalcitrant politicians, humanitarian workers, and even locals.

in November 2015, a massive landslide in the Hpakant jade fields killed 116 people and swallowed 100 others.

The GW investigation quotes locals, who have little idea of who runs day-to-day operations in the sites or who the bulldozers and trucks belong to, complaining about how they are arrested if they lay their hands on high-value jadeite. What more, army personnel shooting at stray jade-pickers, leading to both injuries and deaths, are not uncommon in the ashen mines of Hpakant.

Further, the shadow operators of this trade have shown little regard for environmental ramifications of rampant mining, gorging through large jadeite deposits for maximum output. The consequences have been drastic: in November 2015, a massive landslide in the Hpakant jade fields killed 116 people and swallowed 100 others. In the GW film, we also see locals ruefully talk about disappearing jadeite hills, indicating high topographical disruption.

Thus, a high-value natural resource that could have formed the backbone of the national economy is today seen as a wretched curse, mostly by local Kachins living on the capricious, blackened land. Subdued by the barrel of the gun and the ensuing sense of fear, the local population has been systematically and rather, ruthlessly deprived of the potential benefits of the jade commerce, despite being the traditional owners of the ore-rich lands. At the most, they manage to accrue minuscule profits by occasionally handpicking leftover stones after big miners have rummaged through the ores using heavy machinery.

Beyond the sight of long convoys of trucks rumbling out of the towering jadeite hills and gun-toting military personnel patrolling the mines, the world has seen very little of Burma’s jade mines.

But, is discriminatory extraction the only dark side of Myanmar’s imprisoned jade mines?

Stone Soaked in Blood

Myanmar has been ravaged by a six decades-long violent insurgency, involving the national army and a diverse set of ethnic armed groups, or Ethnic Armed Organisations (EAOs), fighting for political autonomy. The protracted war has destroyed a significant portion of the country’s domestic economy, displaced millions, pauperised frontier ethnic populations, and diminished the country’s human capital dividends.

Beyond the sight of long convoys of trucks rumbling out of the towering jadeite hills and gun-toting military personnel patrolling the mines, the world has seen very little of Burma’s jade mines.

A pivotal part in the GW investigation is the intersection of the armed conflict and the nefarious jade business. Both sides of the conflict – the army and the various EAOs – happen to be the prime stakeholders in the jade trade. In fact, the whole business forms a core part of the broad conflict economy that has sustained the violent civil war for so long and buttressed the self-serving, rival interests of those directly engaged in the violence.

What has particularly sharpened the intersection between political violence and the extractive mineral industry is the endemic (and unfortunate) geographical location of the jadeite mines. Kachin State happens to be one of the most politically contested and restive regions of the country, sitting next to the porous Chinese border. The desire for autonomy has always run strong in the northern frontier peoples, translating into strong support for armed struggle.

This, in turn, has fostered an ideal environment for a long drawn-out tussle between the army and powerful rebel groups in the region, most prominently the KIA and United Wa State Army (UWSA), for control of the jade mines in Hpakant. The chaotic mix of such one-off endemic factors has ultimately led to unending cycles of violence, massive internal displacement, and a thriving cross-border smuggling racket. Simply put, the gemstone commerce and violence have maintained a symbiotic relationship with one feeding the other.

everyone wants a slice of the pie – quite a big pie here – by taking advantage of the secrecy around the whole industry and the overall lawlessness created by the insurgency.

The GW investigation categorically highlights how the KIA maintains its own systems of revenue collection in the mines. Notably, top UWSA operatives too have direct interests in the shadow business. GW points at strong evidence of a longtime drug kingpin and UWSA commander, Wei Hsueh Kang, controlling a certain group of companies that are now dominant players in the jade industry. In fact, private entities owned by Kang – who has a $2 million US bounty on his head – and other UWSA affiliates have been frontal players in the jade industry since the 1990s.

Unsurprisingly, everyone wants a slice of the pie – quite a big pie here – by taking advantage of the secrecy around the whole industry and the overall lawlessness created by the insurgency.

Thus, the gun has emerged as an effective instrument for operational control in a situation where the jade mines dole out large sums of profit for its extractors. On the other hand, the precious mines serve as near-limitless treasure chests for both the army and the rebel groups to maintain their ranks, arsenal, and strike capacities, in addition to surplus profits. In a way, whoever controls the mines, enjoys the upper hand in the near-symmetric conflict.

Jade and Democracy

Myanmar today stands on the crossroads of history, with a popularly-elected government led by Daw Aung San Suu Kyi spearheading the country’s landmark transition to democracy. A key component of this transition is an ambitious peace process that intends to engage almost all ethnic groups that operate in the country. The ultimate aim is to reach a permanent negotiated settlement based on a federal structure, much like the one envisaged by Suu Kyi’s father and pioneer of Burmese democracy, General Aung San, in 1947.

But, does every political actor in Myanmar want peace? Enter, jade.

The highly rewarding jade industry is, unquestionably, one of the key hurdles between the Suu Kyi administration and an effective national peace deal. An end to the conflict would mean greater transparency and fairness in administrative dealings in addition to new institutional safeguards against unilateral actions by private entities. This openness would be highly disadvantageous for the shadow operators of the jade trade, who have traditionally benefited from the opaqueness of the transactional environment, institutional corruption, and absence of legal safeguards. Naturally, the powerful benefactors of this trade would do everything in their capacity to maintain the status quo.

GW’s investigation, once again, sheds light on this aspect. It reveals a certain ‘recognisable pattern’ of conflict intensification in light of fresh scrutiny by the new civilian government. In April 2016, just a few weeks after Suu Kyi’s party, the National League for Democracy (NLD), came to power in Nay Pyi Taw, the Minister of Natural Resources and Environment toured Hpakant for an inspection of the mines. The visit was immediately followed by fresh military offensives by the army against KIA. Since then, the fighting has only gotten worse, with thousands displaced and rendered impoverished due to lack of basic resources and no access to humanitarian services.

The highly rewarding jade industry is, unquestionably, one of the key hurdles between the Suu Kyi administration and an effective national peace deal.

The deliberate flare-up in violence was a clear attempt by the Tatmadaw – the key benefactor of the jade trade – to deflect attention from potential reforms under a democratic state structure. What was perhaps more surprising was the government’s refusal to grant access to the UN Special Rapporteur on the Situation of Human Rights in Myanmar for her proposed visit to Hpakant, something that she mentioned bluntly in her January 2017 report.

Clearly, even the reformed Burmese state is hesitant to open its jade mines up to public scrutiny.

But, it would be wrong to say that the Suu Kyi government has blindly protected the shady jade business. In fact, a lot of progressive action has been undertaken by her administration on this front. After all, no ‘ethically upright’ country would want to invest in a country that runs a parallel shadow business.

In July 2016, barely three months since it came to power, the NLD government moved to hault fresh licensing of mines in Hpakant till a revised legal framework is not put in place. The new licenses, to be doled out pursuant to a fresh gemstone law, will also follow a certain Environment Management Plan (EMP) that the Department of Mines is currently preparing.  However, the moratorium does not cover extensions of previous licenses and those that are yet to lapse. Hence, operators continue to mine jade in Hpakant, and are lobbying for favourable laws so as to continue their activities. On 11 July, moreover, the national parliament approved amendments to the Special Commodity Tax Law (2016) that would render revenue collection on items like jade more effective.

it would be wrong to say that the Suu Kyi government has blindly protected the shady jade business. In fact, a lot of progressive action has been undertaken by her administration on this front.

Despite the progress made, the civilian administration remains apprehensive of taking full-spectrum action against illegal jade mining and trading: bringing past offenders to account and cleansing the mines of nondescript operators. The reason behind this is apparent: the military controls most of the mining business, and the fledgling civilian administration remains hesitant to indict the powerful Generals out of fear of forceful subversion. This skewed dynamic has emerged as a peculiar, and rather reverting, feature of post-2015 Burmese democracy and is continually redefining state-society relations in the country. Without negotiating this impasse, the popular government would find it impossible to affect multi-sectorial reforms.

The Way Forward

The government of Suu Kyi must tackle the jade business on a priority basis, for it could be the key to managing the violent conflict in the north and achieving a durable ceasefire. The jade issue is intrinsically tied to political aspirations of the Kachins, who seem to be fast losing faith on the Suu Kyi administration, and forms a core element in the ethnic desire for greater autonomy. As GW points out, past experiences of conflict resolution in Kachin have proved that imposing a ceasefire or disarming rebel armies without dealing with the root causes of the violence is an exercise in vain.

But, what does tackling the jade issue even entail?

In the short term, it involves ensuring open access to critical information about day-to-day operations, equitable sharing of profits amongst national and local stakeholders, local ownership of profits, installing an environmental protection regime, instituting legal safeguards against rights abuses, and democratising the decision-making structure around the entire business. The idea is not to completely stop jade mining and the commerce around it, but to simply allow the local community to decide how it is to be undertaken. This is because they are the ones who face the direct consequences of the mining.

One local Kachin activist puts its aptly, “My dream is a situation where communities are allowed to choose themselves which [mining] company is best.”

At the core of democratising the industry, lies throwing open the information matrix to the public. GW highlights how “ordinary people have been unable to access basic data on which companies hold mining licences; who those companies’ real owners are; how licences are allocated; what the terms of their contracts are; what they are paying the government; and how much they are producing.” This information black hole has fueled greater suspicion and lack of trust, triggering in turn, political violence.

The idea is not to completely stop jade mining and the commerce around it, but to simply allow the local community to decide how it is to be undertaken.

Furthermore, the introduction of legal safeguards against corruption and human rights abuses must be part of a broader framework of labour rights protection and commercial ethics, wherein the state ensures that industry owners do not exploit locals for their own benefit or to maximise outputs. All stakeholders must have institutional grievance redressal mechanisms to voice their concerns, rather than resorting to violence for resolution.

Needless to say, the jade industry must be a central agenda point in the ongoing peace process. Without addressing this, a permanent ceasefire in the north will remain a distant dream. Giving back control over natural resources – a penumbral component of land-oriented local identity – to the local community would automatically pave the way for deeper consensus on other political and economic issues between the union government and the frontier populations.

Thus, Myanmar’s emancipatory shift to democracy will remain incomplete if its precious green gemstone remains imprisoned. There is little doubt that the powerful forces, which benefit from the trade, will continue to defend the status quo, largely by force. But, Nay Pyi Taw has to step in and stand tall to establish rule of law and a robust regulatory regime before its too late.

This piece was originally published by WION News with the title ‘How jade, the precious stone, is funding ethnic conflicts in Myanmar‘

Angshuman Choudhury is a New Delhi-based conflict analyst and independent journalist, currently coordinating the South East Asia Research Programme of the Institute of Peace and Conflict Studies (IPCS).

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