Myanmar's missing billions

LUCRATIVE BUSINESS: Traders inspect jade at a tea shop in Lone Khin village, in Myanmar's Hpakant township. A large portion of the country's jade is spirited over the border into China with little or no formal taxation, which means billions of dollars in lost revenues.


    Sep 30, 2013

    Myanmar's missing billions

    TIN Tun picked all night through teetering heaps of rubble to find the palm-size lump of jade he now holds in his hand. He hopes it will make him a fortune.

    But rare finds by small-time prospectors like Tin Tun pale in comparison with the staggering wealth extracted on an industrial scale by Myanmar's military, the tycoons it helped enrich and companies linked to the country where most jade ends up: China.

    Almost half of all jade sales are "unofficial" - that is, jade is spirited over the border into China with little or no formal taxation. This represents billions of dollars in lost revenues that could be spent on rebuilding a nation shattered by nearly half a century of military dictatorship.

    Official statistics confirm these missing billions. Myanmar produced more than 43 million kg of jade in fiscal year 2011/12 (April to March). Even valued at a conservative US$100 (S$130) per kg, it was worth US$4.3 billion. But official exports of jade that year stood at only US$34 million.

    Such squandered wealth symbolises a wider challenge in Myanmar, an impoverished country whose natural resources - including oil, timber and precious metals - have long fuelled armed conflicts while enriching only powerful individuals or groups.

    In a rare visit to the heart of Myanmar's secretive jade-mining industry in Hpakant, reporters found an anarchic region where soldiers and ethnic rebels clash, and where mainland Chinese traders rub shoulders with heroin-fuelled "handpickers" who are routinely buried alive while scavenging for stones.

    Non-Myanmar nationals are rarely granted official access to Hpakant. The official reason for restricting access to Hpakant is security: The country's military and the Kachin Independence Army have long vied for control of the road to Hpakant, which is said to be flanked with landmines.

    But the restrictions also serve to reduce scrutiny of the industry's biggest players and its horrific social costs: The mass deaths of workers, and some of the highest heroin-addiction and HIV-infection rates in Myanmar.

    "Of course, some (profit) goes to the government," said Mr Yup Zaw Hkawng, chairman of Jadeland Myanmar, the most prominent Kachin mining company in Hpakant.

    "But, mostly, it goes into the pockets of Chinese families and the families of members of the former government."