Myanmar jade rush muddies promise of change, fuels conflict

[Jonathan Fairfield]

Myanmar jade rush muddies promise of change, fuels conflict

ESTHER HTUSAN, Associated Press

HPAKANT, Myanmar (AP) — Villagers in the jungles of Myanmar's northern Kachin state stand upon staggering wealth: Jade worth tens of billions of dollars. Yet they see almost none of that money, even as the precious stone is dug out from under them.

They've lost land, homes and entire communities to jade mining. The industry was worth more than $30 billion last year according to a new estimate by Global Witness, a group which investigates misuse of resource wealth. But there is so little investment in the region that cars on the main road to the state capital need elephants to rescue them from the mud. And while big, well-connected companies rake in most of the jade, informal miners risk and often lose their lives digging for the scraps.

At one site, dozens of men balanced on a shifting hillside of dirt and rock, jabbing with metal-tipped sticks for the telltale ring of jade as a house-sized dump truck disgorged its load of earth. A basketball-sized boulder tumbled from the dump bucket and barreled down the white and gray slope. The bright-shirted jade pickers scattered in all directions, and as soon as the danger passed they were back, jabbing the dirt again.

In another corner of the 55 square miles transformed into moonscape by the jade industry, several men were buried alive in May when one of the mining-waste mountains collapsed. Photographs taken by a local man showed four corpses pulled from the dirt, streaked with dust and bloodied. They are among dozens maimed or killed in the past year.

Myanmar has changed much in the four years since a notorious military junta gave way to a nominally elected government and the long-isolated nation began opening up to the world. The biggest change for Hpakant, the epicenter of the jade industry in Kachin, is that the pace of mining has turned frenetic. The lifting of many sanctions by the West has made it easier for local companies to import the battalion of Caterpillar, Volvo, Komatsu and Liebherr machines that now dig and haul around the clock

Researchers believe the dark green rocks that can be the size of giant boulders are enriching individuals and companies tied to Myanmar's former military rulers. The rapacity and industrial scale of the effort to extract jade is fueling a separatist conflict in Kachin state. And it is adding to doubts about the government's commitment to political reforms and fair economic development since ending its international isolation in 2011.

"Many people have been killed because of these huge mining companies. We hate these companies," said Kai Ra, a member of a group that formed a year ago after there was no accountability or compensation for children and adults killed by trucks and landslides. "It's so painful to see these huge machines and whenever we see these earthmovers, we think these are murderers," she said

In January, a landslide of unstable waste earth killed at least 30 jade pickers, according to lawmaker Kyaw Soe Lay. The tragedy barely registered beyond Hpakant and no official death toll has been announced.

Authorities carefully monitor the area, particularly prohibiting foreigners, partly because of clashes between the military and independence fighters seeking autonomy for Kachin. Apart from rains, only attacks by Kachin fighters have interrupted the mining. The Associated Press gained access to Hpakant this year, interviewing residents and recording images that show a reckless rush to cart away the area's riches.

Jade is most prized in Myanmar's giant northern neighbor China and is more valuable than most precious gems: Last year, a jade bead necklace was sold for $27.4 million at a Sotheby's auction in Hong Kong. The Global Witness report released Friday estimates Myanmar's jade trade, official and illicit, was worth $31 billion in 2014. That dwarfs Myanmar's famous opium poppies, estimated by the United Nations at $340 million last year.

The group says its yearlong investigation shows the jade wealth is being divided among the over-lapping factions of the country's military, political and business elite rather than aiding development of a country where GDP per head is about $1,200.

No scrap of ground, no part of daily life in Hpakant is left untouched by the fleets of canary yellow trucks and backhoes that carve out the land to uncover thick jade deposits.

In the dry season, the dust is everywhere. In the rainy season, the villages flood. The small Hpakant river can't absorb the massive runoff from the denuded distorted landscape.

As children walk to a school that sits near a precipice created by mining, the machines claw at the earth just meters away.

"There are many different kinds of accidents," said Ye Tun, superintendent of Hpakant Public Hospital. "There could be landslides, stones hit the people, there could be floods," he said. "People are hit accidentally by the machines or crushed."

"It's always very often that we received those kinds of patients."

Secrecy surrounding the jade industry in Myanmar has made precise estimates of its value difficult.

Sales at officially sanctioned emporiums are in the hundreds of millions of U.S. dollars but thought by experts to represent just a fraction of production, much of which is smuggled. Harvard's Ash Centre for Democratic Governance estimated two years ago that jade sales were worth $8 billion in 2011.

The Global Witness investigation arrived at its $31 billion estimate for last year's production from multiple sources: Chinese import figures that show about $12 billion of jade imported from Myanmar last year, Myanmar government production figures, industry estimates of the proportions of smuggled and officially exported jade, valuation data from official emporiums and the Ash center's estimates of the proportions of the three major grades of jade.

Sean Turnell, a Myanmar economy expert at Macquarie University in Sydney, said the magnitude of Myanmar's jade business is a "growing revelation" that adds it to gas and narcotics as a source of illicit funding for the military. He said the methodology behind the $31 billion estimate is "more than sound."

David Dapice, a Harvard professor behind the Ash study, said $31 billion is possible though not certain. The Chinese import figures alone make it clear "a lot of money" is involved. "Without jade, peace in Kachin state would be a lot easier," he said.

Global Witness said its investigation shows the dozens of companies mining in Hpakant are controlled by a small number of players that include the family of former dictator Than Shwe, major military owned enterprises, ministers in the current government, a drug lord and business groups that were cronies of the junta government.

"What's happening to the money is the real question," said Global Witness analyst Juman Kubba. "It certainly isn't helping the people of Myanmar or the people of Kachin state," she said.

Hkyet La Lawt, a 43-year-old who is one of the leaders of Maw Maung Layang village in Hpakant, said they had little choice but to move the entire village when mining began to encroach upon it.

"This is not only my village. This is happening in every single village," he said. "They just throw earth left and right and destroy our roads. You are going on one road and the next day it will have disappeared."

"They've destroyed everything. It's like we, the local people, are using their roads."

-- (c) Associated Press 2015-10-25