Lifting of Myanmar sanctions should hinge on reforms in jade industry: Report

A pedestrian walks past the Sule Pagoda in Yangon on June 3, 2013.
A pedestrian walks past the Sule Pagoda in Yangon on June 3, 2013. PHOTO: BLOOMBERG

 BANGKOK - A report by investigative organisation Global Witness argues the United States and Myanmar's other partners should benchmark lifting of sanctions and future aid to reforms in the country's jade industry - including sharing control and benefits more equitably with locals in Kachin State, and making businesses more accountable.

 The report, released in Yangon on Friday (Oct 23), says the jade trade in Myanmar's Kachin state is ''secretly controlled by networks of military elites, drug lords and crony companies associated with the old military regime''  - and that while the value of jade production in Kachin was as high as US$31 billion (S$43 billion) alone, locals remain poor.

 The report titled "Jade: Myanmar's Big State Secret'' is based on a 12-month probe and some 400 interviews. The scenario it paints underscores the fact that the long-running conflict between Kachin and government forces is as much over natural resources as over political and ethnic rights.

 "Jade is a significant driver of Myanmar's most serious armed conflict, between the central government and the Kachin Independence Army / Kachin Independence Organisation (KIA/KIO),'' the report says.

 The elites who control the business do so outside the scope of the sanctions imposed on the old regime, Global Witness says.

In a statement emailed to media, Global Witness analyst Juman Kubba said "Myanmar's jade business may be the biggest natural resource heist in modern history.''

 US$31 billion was nearly half of the entire country's Gross Domestic Product, and over 46 times national spending on health, he said. 

Yet local populations saw little benefit. Conditions around the mines are dangerous, drugs and prostitution are endemic, and "those who stand in the way of the guns and machines face land grabs, intimidation and violence.'' 

 The jade industry is a key test of US policy on Myanmar, and Washington should use its leverage to work with the next government to "help take the jade out of the hands of the military, cronies and drug lords'' the report urges.

 Myanmar is gearing up for a watershed general election on Nov 8, and a new government will be in place early next year.

The KIO/KIA had stayed out of a Nationwide Ceasefire Accord (NCA) signed with fanfare in Naypyitaw on Oct 15 between the government and eight armed groups - leaving uncertain the fate of groups like the Kachin who did not sign.

 Ominously, the report notes that the jade industry "generates funds for both sides in a war which has claimed thousands of lives and seen 100,000 people displaced since it reignited in 2011.''