April 2012

 

Why Trade Sanctions Have Not Worked in the Gems and Jade Trade

 

The first sanctions were imposed in 1997. A second set was imposed in 2003. There are five different aspects of sanctions:

1. Ban on investments

2. Restrictions on financial transactions

3. Ban of money transfers

4. Freeze on assets

5. Ban on importation of jade and rubies

 

Regarding the last aspect: There are four sub areas in Kachin State where mining takes place. The largest is Phakant, constituting 1,864 square miles; the smaller mining areas are Lonkin Wai Kha Tar MaKhan. Phakant was originally a small village called Aung Mingla, in Jingpaw; “phakant” means a fallen mountain, and that is how the jade mining area was exposed and renamed.

 

Ne Win and the SLORC Generals deserve all contempt and opprobrium they receive. However, the jade mines in Burma are not gulags; the terrain does not permit this. People who describe such gulags have not visited this area, where the mines are spread over 2,338.87 square miles of most daunting jungle, mountains, and valleys and comprise 1,400 mining sites.

 

There are about 100,000 miners involved in mining, cutting, polishing, trading, and selling the output from the mines. That human rights are violated is a given, but to charge that local authorities induce trading in sex and drugs is a exaggeration; the high rate of HIV/AIDS has more to do with easy availability of drugs that cause HIV. One report quotes a resident, Aour lives are difficult so I use many drugs: I smoke heroin and use alcohol. Drugs are sold openly in many shops of Hpakhant. The government soldiers do nothing to stop to close the shops.” Such reports are common.

 

Sanctions were first imposed in 1997, but not specifically on the jade trade. Then in 2003, at the behest of the expat community, President Bush imposed more onerous and targeted sanctions against trade in gems and jade. Sanctions have not forced mines to close, however; trade in gems and jade have increased exponentially. Sales actually reached a high of 1 billion for the first time in 2006–07. Why is this?

 

First, almost all the jade mined at Phakant goes to China. Most sales are through auctions in Rangoon. Trade with the U.S. is negligent; the trade is primarily intra-Asian.

 

Second, the way the law was set up and what the expatiate community advised Congress to do is more focused on individual rich oligarchs than on reality. Jade is banned, but not Maw Sit Sit, which has a market here in the U.S. Rubies are banned, but not sapphire and spinel, which also has a market here.

 

I have been gathering statistics on sales for many years. From 1964 to 2002, sales of gems and jade totaled $390,638,311 (source: MGE and Burma’s Central Statistical Office). When sanctions first went into effect in 1997, total sales were $9,398,297. In 2002, before the second round of sanctions went into effect, total sales were $50,803,751. After 2004, despite sanctions, sales increased exponentially (sales after 2005 were reported in Euros but are here converted into U.S. dollars). In 2007–08 the country produced 20,235 tons of jade, 22.668 million carats of gemstones (including ruby, sapphire, spinel, and peridot), and 846 kilograms of pearl (www.burmanet.org/news for 6/302009); sales income, mostly from jade, totaled $647.53 million (Burma’s Central Statistical Office). At the March 2009 auction, more than 5,000 lots of jade were displayed, $191 million of gems and jewelry were sold, and more than 2,300 traders participated, mostly from China and Hong Kong (www.burmanet.org/news for 6/302009). In 2011, Naypyitaw reported participation of 8,719 traders at auctions. Most were from Asian companies; local traders numbered 3,719.

 

The figures speak for themselves; no further comment on the effect of sanctions is necessary.

 

Reflections on the 2012 Tucson Gem, Mineral, and Fossil Showcase:

First, a hearty thank-you to new and returning customers who helped to make our participation at the 22nd Street Show a success. We hope to see you again next year.

Traffic at the show seemed to be about the same as in 2011. There was a great deal of interest in jade; buyers were looking for fine jade from Burma. But prices have risen dramatically in recent years, because the Chinese are buying most of what is produced in Burma and will pay huge sums for the finest material. For the first time, Burma’s sales of jade approached the $1 billion mark, although their best year remains 2006–07.

Rough and cabbed Maw Sit Sit, produced only in Burma was a best-seller again this year. Burmese spinel also caught the eye of many shoppers. It is available in a multitude of colors and in sizes larger than ruby.

Due to the spiraling cost of gold, SKS has begun offering rings and earrings in sterling silver, some in delicate settings and others in heavier settings; some with single stones such as Burma spinel, Burma ruby, or Burma sapphire and others in multiple-stone settings. These were very popular at the show, and we intend to expand our offerings. They allow customers to purchase and own a beautiful, natural, untreated stone (which will likely appreciate in value, in contrast to synthetic or treated stones) at an affordable price.

Finally, many of you are aware that very little literature on Burma appears in English. We are proud to announce publication of a novel set in wartime Burma. Although it is listed as fiction, it is based on true events. It provides the reader with knowledge of what really happened in Burma during WWII, without hubris, half-truths, and tea-shop talk. Events of 1941 and thereafter influenced events in the post-war era, including the military coup of 1962, the closing of the borders and repression that followed, and the current tensions among Burma’s peoples. Rangoon 1941. A Novel Based on True Events, by S. Kella Samuels, sells for $22 including postage in the U.S.

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