Is Modern History's Biggest Natural Resource Heist in Myanmar?

An important report by an environmental watchdog sheds new light on the country’s massive illegal gem industry.

Global Witness has staked its reputation on significant investigations and reports into corruption by corporates and governments on a grand scale, particularly in Southeast Asia where objectivity and honest appraisals about the state of the environment are in short supply.

Its work in the East Malaysian state of Sarawak – where long serving chief minister Taib Mahmud retired with a family fortune worth an estimated at US$20 billion – was widely applauded, as were investigations into land grabbing across Cambodia by Vietnamese rubber companies.

Now the London-based environmental watchdog has set its sights on Myanmar, where it has revised the value of the illegal gem trade substantially higher, at US$31 billion in 2014 alone, almost half of the country’s entire GDP and 46 times government’s spending on health. The result is what one analyst says might be the biggest natural resource heist in modern history.

“The jade business is a significant driver of Myanmar’s most serious armed conflict, between the central government and the Kachin Independence Army/Kachin Independence Organization,” the report, Jade: Myanmar’s Big State Secret, found.

“The industry generates funds for both sides, and our report shows there is a strong incentive for military commanders and hardliners in government to prolong the conflict and protect the ill-gotten assets they stand to lose if the jade business is run more openly and fairly.”

It found the money raised from the illicit trade “could make a massive difference to the country’s future” but hardly any of the financial benefits were reaching the ordinary people or state coffers.

“Instead, the benefits are swallowed by elites including the family of former dictator Than Shwe and drug lord Wei Hsueh Kang, amongst many others also on US sanctions lists,” the report said.

“Hidden behind layers of sham companies and proxy owners, they control large chucks of this critical industry. These elites between them have most to lose from an open and fair future for the country.”

It also found the jade business was wreaking havoc on the people and environment of Kachin state, where the stone is mined. Conditions around mining are often fatally dangerous and drugs and prostitution are endemic, while those who stand in the way of the guns and machines face land grabs, intimidation and violence.

“Myanmar’s jade business may be the biggest natural resource heist in modern history. Since 2011, a rebranded government has told the world it is turning the page on the ruthless military rule, cronyism and human rights abuses of the past,” said Global Witness analyst Juman Kubba.

“But jade — the country’s most valuable natural resource and a gemstone synonymous with glitz and glamour — reveals a very different reality.”

“This massive, dirty business is still controlled by a rogues’ gallery of former generals, US-sanctioned drug barons and men with guns,” Kubba said. “Hidden behind obscure companies and proxy owners, these elites cream off vast profits while local people suffer terrible abuses and see their natural inheritance ripped out from beneath their feet.”

The report was released just two weeks ahead of landmark elections following more than three years of political reforms which critics fear are more about legitimizing the wealth of Myanmar’s generals and politicians who have overlorded the country as a one party state for decades.

In March, Global Witness produced a separate report detailing allegations that Tatmadaw – Myanmar’s military – had systematically grabbed large swathes of land from farming communities since the mid-2000s.

The land was subsequently parceled-out to government-friendly companies and political associates to develop rubber plantations which Global Witness says has marginalized ethnic minorities, particularly in the country’s northeast along the Chinese border.

“Following almost 50 years of military rule, Myanmar’s politics and economy is supposedly being disentangled from the Tatmadaw’s grip,” said Josie Cohen, land campaigner for Global Witness.

“But in many cases the army has merely swapped its uniforms for suits, with military officials and their cronies retaining firm control of the country’s land sector.”

Luke Hunt