myanmar

The U.S. ban against the importation of rubies and jade from Mynanmar is now official. President Bush signed legislation Tuesday hoping to send a strong message to Myanmar's brutal ruling regime. While many jewelry companies including Tiffany & Co., Cartier and Bulgari already have had bans in place for a while, this bill makes it official. The U.S. government was particularly motivated to move after military junta's reaction to the cyclone that hit the country in May. The regime was slow to accept help and and the country is still in recovery from that devastating event. First lady Laura Bush has spoken out on the issue of a ban against rubies from Myanmar before and she accompanied her husband in the Oval Office as he signed the bills, which extend and harden sanctions Congress first passed in 2003.

Myanmar, formerly known as Burma, produces some of the world's most beautiful rubies. The rubies from the Mogok region have a deep translucent color often described as pigeon's blood. As the AP article notes, many stones are currently being laundered through nearby countries such as Thailand to get around sanctions. Myanmar also does a brisk business in jade and jadeite which is continuing to be bought merchants coming from China and Hong Kong who purchase the stones in state-run auctions held periodically.

A few weeks ago I mentioned the concerns over rubies from Myanmar (Burma) but there is another stone exported from Burma to be aware of, jadeite. While the country is famed for its beautiful red rubies, Businessweek reports that the export of jadeite from Burma to Hong Kong and China is worth about $433.2 million a year, which is around 10% of the country's total exports. And that's just the official figure, it doesn't factor in the sales of smuggled goods which runs into the hundreds of millions of dollars.

Myammar currently runs six auctions a year to sell rough stones and polished pieces of the stone which is extremely popular in China. Myanmar Gems Enterprise (MGE), a unit of the Ministry of Mines, has thus far postponed the latest auction, which was set to take place in October, possibly because the regime is nervous about having foreigners enter the country at this time. Recently a fax sent by the Burmese Consulate to a Hong Kong jadeite trade association said that the auction would take place at the end of November but that has not been confirmed yet.

Cartier, Bulgari and other jewelers have pledged not to do business in Burma, but Chinese and Hong Kong traders have said that they plan to go right doing business in the area. The Businessweek article quotes Kim Wing Yau of Kam Wing Cheong Jewelry as saying that business and politics should be separate. For these businessmen seeking to keep customers happy they don't have much of a choice. While rubies have a worldwide appeal, the jadeite markets are mainly located in China, Hong Kong and Taiwan. Burma has some of the best deposits of gem-quality jadeite in the world. With China's increased purchasing power, the demand for jadeite is steadily on the rise. The Burmese government is aware of the lure of the stones and has increased the amount of jadeite auctions.

The rubies that are mined in the Mogok Valley in Myanmar are some of the most beautiful and prized stones in the word. The rich red color and uncommon clarity of the "pigeon's blood" stones means that they command some of the highest prices in the world. They are also coming under increasing scrutiny. Much as diamonds from certain African countries such as Sierra Leone have been used to fuel wars and have been labeled blood diamonds, there are worries that stones from Myanmar are helping to fund the country's military regime. In light of the protest which occurred last month in which people were killed as soldiers opened fire on monks and civilians calling from democracy, the focus on these gemstones has increased.

The concern is not just over the money fueling wars but also the conditions in mines in Myanmar. A recent article in the Scotsman offers a chilling portrait of mining in the area. Allegations include the fact that mine owners may get workers addicted to drugs so that they can control them better.

Bans on Myanmar gems are nothing new. There has been a ban in place for several years, since the Congress banned the importation of products from the country. Tiffany & Co stopped buying rubies from Myanmar in 2003 and Cartier and Bulgari have joined them. Also the Jewelers of America has asked Congress to amend the ruling of the original ban to specifically mention gemstones mined in Myanmar. A Reuters article mentions that the reason for this is because some gem dealers are not taking the issue seriously. A quick scan of eBay revealed many listing for "Burmese rubies." Some of these are likely not from the region, unscrupulous dealers often tag rubies as "Burmese" because the rubies have such a reputation for beauty.

For a counterpoint, check out this post from Gary Roskin who writes for JCK and is a gemstone expert. He is in contact with dealers in the region who say that the gemstone money doesn't go to the government and that instead of hurting the government, a ban could hurt the Burmese people.

Despite the controversy, Myanmar has said that they are going forward with a planned auction of gems and jade next month. Unlike the regimented world of diamonds, the colored gemstone industry is far less centralized and regulated. There is also no Kimberley Process that addresses the human rights concerns for gemstones.