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Myanmar Jade Trade is run by former junta

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Revealed: Myanmar's jade trade is run by former junta members





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Global Witness, a London-based campaigning group that reveals the economic networks behind conflict, corruption and environmental destruction, has released a report into the jade business in Myanmar that, for the first time, reveals the scale of the industry and details how it is controlled by the military elites associated with the junta that ruled the country until 2011.

Following a year-long investigation, Global Witness researchers sought to bring transparency to an industry that largely remains in the shadows, suggesting that the value of jade production in the country could be as high at $31 billion (£20bn). The largest market for the green stone is China, but official Chinese data on its import from Myanmar values it as significantly less, at $12 billion.The NGO, whose co-founder Charmian Gooch spoke at WIRED 2014, estimates that the jade trade is the equivalent of 48 per cent of Myanmar’s official GDP – and 46 times government expenditure on healthcare.

So where is the money going? The report alleges that, despite Myanmar’s significant political reforms, it’s disappearing into the pockets of individuals associated with the military junta, drug lords and crony companies under the control of individuals who use the cash for their own private and political purposes. "We interviewed over four hundred key players in the jade industry, government officials and others pored over company records and production data,” says Global Witness researcher Mike Davis on the phone from Myanmar’s capital, Yangon. "The vast majority goes to China, most of it smuggled, and price manipulation is rife."

Despite significant efforts from western governments -- particularly the US -- to encourage reform in Myanmar, significant amounts of the country’s economy are still in the hands of a corrupt elite. In a leaked US diplomatic cable in August this year Steven Law -- the chairman of a company that was awarded a government contract to develop Yangon international airport -- was described as a "top crony" of Myanmar’s junta. His father Lo Hsing Han was identified as Myanmar’s "godfather of heroin".

and China. Global Witness reports wholesale environmental and economic destruction in parts of the region and intimidation of indigenous people who have had their land seized. The jade trade is also fuelling armed conflict between the government and ethnic minority Kachin nationalists. "You’re not allowed into the jade mining area," Davis says. "Officially you can get a permit -- but you won’t be granted one. We used a combination of methods from straightforward approaches like knocking on the door of government offices, sending letters, and asking questions of officials, as well as retrieval and analysis of company records in partnership with the organisations Open Corporates and Open Knowledge Foundation. We also worked closely with a range of sources who were able to give us access to information about certain aspects of the business. Ultimately we ended up with a very deep pool of data. The Myanmar government has some of this information, but it isn’t willing to share much of it with its own citizens."In July 2014, the Yangon government signed up to the Extractive Industries Transparency Initiative (EITI) an internationally recognised organisation that promotes open and accountable management of natural resources. However, Davis maintains that, while Myanmar has implemented some of these standards in the oil, mining and gas industries, jade is yet to be accountable in the same way.

"The government of Myanmar is trying to repair its reputation by joining the EITI," Davis says. "But jade is the elephant in the room. There’s some limited transparency in oil and gas, but none in jade, yet the sums involved in the industry are staggering."

The report is published weeks before a general election in Myanmar that will serve as a measure of how far the political system has changed. Gareth Price, a senior research fellow at Chatham House in London says that there has been a degree of reform in the country. "It’s moved forward in terms of personal freedoms -- there’s a free press, people have mobile phones and a large number of political prisoners have been freed," he says. "But the other part of the story is where political power lies and it’s very much with the same group -- instead of being army officers they retire and put on suits."