Counting the Cost

Is Myanmar’s jade business driving ethnic tensions?

How Myanmar’s jade trade, land grabs and vested economic interests contribute to what the UN calls “ethnic cleansing”.

Over the past few weeks, nearly 400,000 people escaping violence in Myanmar’s eastern state of Rakhine have streamed into Bangladesh, creating a humanitarian crisis. The UN Security Council has condemned the violence against the Rohingya people, calling it “ethnic cleansing”. 

A report by Global Witness suggested that natural resource exploitation, especially the country’s billion-dollar jade business, may also be playing a part in the country’s religious and ethnic tensions.

Myanmar has some of the largest and best quality jade reserves in the world.

According to a report by Global Witness, the country’s jade industry was worth $31bn in 2014, which is as big as half of Myanmar’s gross domestic product (GDP) in 2014. But none of that money is reaching ordinary people. 

Instead – the report said – the sector is secretly controlled by networks of military elites.

While there are about 100 big mining companies operating in Myanmar, they are controlled by only 10 or 15 owners, according to the report. Among those cited as the major beneficiaries of the lucrative trade are former and current government and military officials.

“Myanmar’s jade licensing system is wide open to corruption and cronyism. The main concessions are in government-controlled areas of Hpakant Township, Kachin State, and blocks are awarded through a centrally-controlled process which multiple industry sources say favours companies connected to powerful figures and high-ranking officials. In the words of one jade businessman, ‘if there is a big hat involved [in a bid], they will surely get it’,” the report stated.

Most stones are smuggled across the border to neighbouring China. According to Chinese government import data, gemstone imports from Myanmar were worth $12.3bn in 2014, while other unofficial estimates were much lower.

As one of Myanmar’s most precious resources, “jade is inextricably linked to the conflict in Kachin State. Watching licensed companies controlled by their worst enemies gobble up their natural inheritance is a source of simmering resentment amongst the Kachin people. As some put it, ‘the tree is in our garden, but we are not allowed to eat the fruit’,” the report stated.

Paul Donowitz, a team leader at Global Witness, spoke to Al Jazeera’s Hazem Sika about “probably the biggest natural resource heist in modern history” and the relationship between jade and conflict.

Al Jazeera: Is there a connection between the jade industry and what’s happening now with the Rohingya community?

Paul Donowitz: You have to take a step back and understand the context. The military in Myanmar has an outsized role in politics, the economy and the social life of the country by virtue of the Constitution which guarantees it 25 percent and a veto-proof standing to change the Constitution. Also, the military controls key sectors of the economy and by virtue of this special status, the military really remains outside of civilian control. The civilian government can’t hold the military accountable for any actions or abuses it commits against ethnic people, including the self-identified Rohingya.

Al Jazeera: Myanmar is a resource-rich nation – oil and gas being among them. There are pipelines being built right now to connect Myanmar to China. These projects claim to benefit the whole country with employment, transit fees, oil and gas revenues, but are they doing that?

Donowitz: There’s an offshore gas field that’s been built and oil and gas pipelines to transport Myanmar’s gas and foreign oil to China. Instead of providing jobs … and spurring the economy, what we’ve seen is they’ve created resentment among local people who feel they’re not deriving benefits from these projects.

There’s issues around land grabs, displacement, and in fact, we’re seeing now another mega-development project and economic zone up in Rakhine State that’s fuelling additional resentment. So, these megaprojects – which in theory could provide benefits to local people – are having the opposite impact and are really only furthering distrust to the central government and the military and further marginalising local people – which is not helping the situation in Rakhine at present.

For more, read the Global Witness report.