Myanmar is known for its world-class gems. However, the political turmoil and international sanctions the country has undergone in the previous 50 years has hampered Myanmar’s potential in the international gem market. International brands are abiding with sanction not to buy gems from Myanmar. These sanctions created a black market for gems and devalued the prices.
This multi-billion dollar market is benefiting only the handful of country’s elites. From the time sanction has been imposed, there has been no dramatic impact on gems sales except last year’s armed conflict at Kachin State does dramatic affect on gems production as well as sales. According to last year Reuter’s news report says that emporium sales fell to 63 percent compared to previous sales figure. But for the production global witness report estimated that over the past decade jade production was worth around $122.8 billion. This year Myanmar Gems emporium sales haven’t seen healthy amount as last year due to the falling demand and recent change in rules and regulation. On July 22 Gems traders from Mandalay, Sagaing and Hpakant have sent a letter to government urging to stop jade mining using machinery at Kachin State for 3 years and to control the smuggling route to china. This effort is to cope with excessive mining and reduce the product’s ability on the market aiming to control the falling price on Myanmar Jades. According to latest news, government put on hold for renewing license of mining companies over 310 across different places in Myanmar. Issuing of mining licenses will be frozen until Myanmar gems stone law has been passed, said Ministry of Natural Resource and Environmental Conservation.
Such kind of move from the government would bring up the wave of change into the current gems market. In a conversation with an experienced gems trader from Mogok, Win Htet said that most of the traders will kept the fine gems in the hope of price increase. The market will be flooded with low quality gems. Despite having series of sanctions imposed by international government, Myanmar’s precious stones still make it to the global market, through smuggling via neighboring countries. Based on Chinese import data 2014 last year global witness report estimated that jade trade was worth around $12 billion and jade production might likely reach $31 billion dollars on following year. It further stated that 50 to 80 percent of jade is directly smuggled from Myanmar-China border. The data we are seeing here is not catching up with data from Myanmar Statistical Year book 2015. When Thein Sein’s government took over, significant improvement was seen on different sectors. Consequently in 2012, US lifted the ban on trade and investment by US companies in Myanmar. But Washington has maintained the sanction on imports of Burmese Jadeite and Rubies.
Although sanctions are in place, mining industry is getting richer and creating barrier for the local small trader to get access to the gems market. The worst part is that, due to the irresponsible jade mining around Hpakant area, high numbers of landslide are the cause of deaths for the local residences. The main purpose of the sanctions is fading on the ground levels.
Yearly emporium sales figure are strong evidence that US sanction are not affecting on Myanmar gems market. According to Xinhua News Agency Myanmar emporium earned $ 702.66 million in 2012, in 2013 $ 2.4 billion, in 2014 $ 3.4 billion and in 2015 $ 1.262 billion. There was a dramatic increased on yearly sale figured. In theoretically, the use of sanctions will directly affect the mass publics; to ease the pain public will raise their voices toward the government to change it. Along with Myanmar, Iran and North Korea are good examples where US sanction is not really effective to prevent countries specific ambitions. Last year local news journals interviewed a US based law firm and found that around 75 percent of the economy is directly or indirectly linked with military. These kinds of companies are easily bypassing the sanctions using different financing methods to sanctions untouched companies. Some reports also suggest that growing numbers of shadow companies from China are operating in jade mining sector they are getting up to 70 percent financing from China. The opportunity for supplying international market with finished products means creating jobs for locals and improving national income which Myanmar failed to do with the sanctions. But according to Myanmar Times the government is listing the gems in the country export strategy and plan to make adding value to the gems products and selling at high price. At present time government emporium is mostly selling raw gems stone to international traders.
Recently, the Obama administration has relaxed sanctions as many as 10 state-owned entities from the finance, timber and mining industries. But for the time being more than 100 individuals and companies are still on sanction list. Latest sanction relaxation has allowed more financial transition will take place between two countries. Even these kinds of control sanction relaxations could improve the country’s GDP figure steadily. Financial times reported that benchmarks to normalize the relationship with United State have been met. It is time to normalize the relation with Myanmar said John Goyer, senior director for Southeast Asia at the US Chamber of Commerce.
