Man­dalay trader pe­ti­tions for min­ing halt

The Myanmar Times - - Business - JEREMY MULLINS j.mullins@mm­ MON MON AYE


A MAN­DALAY trader is cir­cu­lat­ing a pe­ti­tion call­ing for an im­me­di­ate but tem­po­rary halt to jade min­ing and a re­vamp of ex­port pro­ce­dures, warn­ing the Man­dalay mar­ket could be headed for dis­as­ter if busi­ness con­tin­ues as usual.

The pe­ti­tion will shortly be sub­mit­ted to a Re­gional and Union-level of­fi­cials, with its main backer hop­ing it can sway the gov­ern­ment, even if only a mi­nor­ity of jade traders signs on.

“If they keep min­ing and ex­port­ing the jade as they are now, then within one year, two years, the lo­cal mar­ket will be fin­ished,” said U Aung Win Oo, a prom­i­nent Man­dalay jade dealer.

He is the driv­ing force be­hind the pe­ti­tion, which he said he be­gan af­ter a meet­ing with gov­ern­ment of­fi­cials shortly af­ter the Na­tional League for Democ­racy took power on April 1.

U Aung Win Oo said that at the meet­ing the gov­ern­ment of­fi­cials sought busi­ness­peo­ples’ opin­ions on the fu­ture of the jade mar­ket, which is an im­por­tant part of Man­dalay’s econ­omy but has suf­fered enor­mously from fall­ing prices in the last few years.

He claimed he was the only one of 16 jade deal­ers in at­ten­dance who wanted the tem­po­rary stop and re­or­gan­i­sa­tion of the in­dus­try in an ef­fort to im­prove its prof­itabil­ity for Man­dalay.

U Aung Win Oo sub­se­quently launched the pe­ti­tion, which calls for an im­me­di­ate, tem­po­rary halt to jade min­ing at Hpakant. The ef­fect will be to push up prices as sup­ply be­comes re­stricted, though U Aung Win Oo claimed the pri­mary goal of the halt is to al­low the new gov­ern­ment to re­or­gan­ise how the jade ex­port mar­ket is con­ducted.

The pre­vi­ous gov­ern­ment had passed an amend­ment to the Gem­stone Law on Jan­uary 29 2016 which he claimed made it eas­ier for di­rect ex­ports of jade. U Aung Win Oo said this will end up hurt­ing the Man­dalay and Sa­gaing mar­kets, as traders can now cut out the mid­dle­man and take their prod­ucts straight from the mines to China.

“We have to amend this law again,” he said in an in­ter­view at his home in Man­dalay.

A min­ing sus­pen­sion would also al­low the new Na­tional League for Democ­racy ad­min­is­tra­tion time to im­prove the gov­ern­ment’s tax and rev­enue ef­forts from the min­ers, he added.

Tra­di­tion­ally, jade is mined at Hpakant in Kachin State, and then brought to Man­dalay or Nay Pyi Taw where it is sold to for­eign buy­ers. The Man­dalay mar­ket op­er­ates ev­ery day, while the Nay Pyi Taw jade em­po­rium is run by the gov­ern­ment and only takes place once a year for a few days. A large quan­tity of jade is also smug­gled di­rectly to China, the ma­jor buyer of Myan­mar’s jade.

Prices in Man­dalay and Nay Pyi Taw have dropped pre­cip­i­tously over the last two years, and traders have pointed to a range of causes.

U Aung Win Oo said the 201213 con­flict in Kachin State be­tween the Tat­madaw and the Kachin In­de­pen­dence Army some­what re­stricted sup­ply, keep­ing prices high. With a re­cently im­proved se­cu­rity sit­u­a­tion in Kachin, more peo­ple have been able to en­ter the busi­ness.

The Na­tional League for Democ­racy vic­tory in the Novem­ber 2015 elec­tion also caused a flurry of ac­tiv­ity at Hpakant, as min­ers pushed to ex­tract as much as pos­si­ble ahead of a po­ten­tial change in pol­icy brought by the new gov­ern­ment, he said.

Other traders have blamed China’s crack­down on cor­rup­tion and its slow­ing econ­omy for keep­ing that coun­try’s buy­ers at home.

What­ever the rea­son, it is clear the Man­dalay jade busi­ness is hurt­ing. How­ever, U Aung Win Oo ad­mits it has been dif­fi­cult to con­vince jade traders to sup­port his pro­posed reme­dies. Man­dalay Jade dealer

His pe­ti­tion had only a few dozen names of traders when seen by The Myan­mar Times, though at the Man­dalay mar­ket the next block over from his house, there are thou­sands of buy­ers and sell­ers at the mar­ket ev­ery day.

Prices may be low, but the prospect of strik­ing it rich with the pre­cious stones keeps traders com­ing.

Traders there said that while they are aware of the pe­ti­tion – U Aung Win Oo en­sured a booth was manned at the mar­ket from July 14 to 28 – they are re­luc­tant to put their names to it.

“I’m not in­ter­ested in the pe­ti­tion,” said one trader at the mar­ket, who de­clined to be named. “Prices are less than half of what they were a few years ago, but I still need to sell for my busi­ness.”

U Aung Win Oo said he is not sure if his pe­ti­tion will have any ef­fect. How­ever, he reck­ons the new gov­ern­ment may be re­cep­tive to his views, and he plans to sub­mit the ap­peal even if it has fewer names than he would like.

The pe­ti­tion comes at a cru­cial time for the jade in­dus­try. Min­ing prac­tices in Hpakant have been the tar­get of re­peated crit­i­cism due to en­vi­ron­men­tal and hu­man rights con­cerns, com­plaints about the murky busi­ness prac­tices and prof­i­teer­ing in the in­dus­try, and al­le­ga­tions that the re­source fu­els con­flict and cor­rup­tion in the re­gion.

How­ever, Myan­mar faces a large and grow­ing trade deficit, and jade is a ma­jor ex­port in­dus­try. As­sess­ments of its value have var­ied widely, with a study by the Ash Cen­ter at Har­vard Uni­ver­sity es­ti­mat­ing jade sales as worth US$7.9 bil­lion in 2011, while Global Wit­ness put 2014 pro­duc­tion at about $30 bil­lion.

Re­gard­less of the trade’s ac­tual value, it is clear the eco­nomic im­pacts are far-reach­ing. For in­stance, it is a pop­u­lar re­frain among Man­dalay’s real es­tate bro­kers that the jade mar­ket’s ups and downs af­fect the city’s hous­ing prices.

The Na­tional League for Democ­racy gov­ern­ment has al­ready sig­nalled the po­ten­tial for change in the trou­bled in­dus­try, though much of its ap­proach re­mains to be seen.

Gov­ern­ment of­fi­cials said in July that min­ing per­mits will not be re­newed for jade and gems when they ex­pire. New per­mits will be is­sued once by-laws to the Myan­mar Gem­stones Law have been passed, an of­fi­cial from the Min­istry of Nat­u­ral Re­sources and En­vi­ron­men­tal Con­ser­va­tion said.

For now, U Aung Win Oo claims he will con­tinue with his some­what un­likely pe­ti­tion.

“Next week, I will send the pe­ti­tion to eight dif­fer­ent gov­ern­ment de­part­ments,” he said. “I don’t know how they will re­spond.”

‘If they keep min­ing and ex­port­ing jade as they are now, the lo­cal mar­ket will be fin­ished.’

U Aung Win Oo

Photo: Jeremy Mullins

U Aung Win Oo, who has launched a pe­ti­tion to end jade min­ing in Hpakant, sits in his home in Man­dalay.

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