“Genocide Gems”: How the Gemstone Industry is a Backdrop to Myanmar’s Unrest

By Mary Bradley

Myanmar, also known as Burma, has witnessed brutal violence and mass protests since the country’s military staged a coup in February following a general election in 2020.[1] The military claimed the country’s election was fraudulent after civilian political leader and Nobel Peace Prize winner Aung San Suu Kyi won in November 2020.[2] She has remained in an undisclosed location since February and least 600 people have been killed since protests began, including 46 children.[3] The international community has condemned the actions of the military and have imposed sanctions in response, including upon its massive, military-controlled gemstone industry.[4]

Background

Myanmar’s National League for Democracy (“NLD”) party won 346 seats in the election on November 13, 2020, making way for the next government, but the military-based opposing party, Union Solidarity and Development party, refused to recognize the results.[5] Myanmar’s commander-in-chief of the armed forces, Gen. Min Aung Hlaing, ordered troops to seize the capital in February.[6] The takeover came just before opening day of parliament and it was announced a state of emergency would be in place for one year.[7] All legislative, executive, and judicial power was transferred to Min Aung Hlaing.[8]

The country is no stranger to a military-led government. It ruled Myanmar for half a century until 2011, when reforms began to dismantle the military’s stronghold and Suu Kyi won the 2015 election.[9] However, the military retained a quarter of the parliament’s seats along with significant power within government.[10] While democratic progress was the goal, the country continued to face international condemnation for abuses and violence toward Rohingya Muslims.[11]

The military suffered a blow in the 2020 elections as the NLD took more control the parliament.[12] As a result, military leaders alleged voter fraud and staged a coup with another election supposedly planned once the state of emergency ends.[13] To justify its actions, the military leaders claimed the constitution allows the military to take control in situations that cause “disintegration of the Union, disintegration of national solidarity, and loss of sovereign power” – this apparently includes alleged but unfounded voter fraud.[14] Myanmar’s election commission denied mass voter fraud and found no substantial problems that would overturn Suu Kyi’s win of 83% of the vote.[15]

Gemstone Industry

            In an attempt to hold military leaders accountable, countries including the United States and the United Kingdom have condemned the actions of officials and imposed sanctions against generals overseeing the coup and military-owned companies.[16] The United States in particular suspended government-to-government engagement until the democratically elected government returns to power.[17] Its sanctions include blocking “assets and transactions with Myanmar’s state-run gem company, a key source of income for the military authorities.”[18] The U.S. Treasury Department’s sanctions against the Myanmar Gems Enterprise (“MGE”), which is tied to the military, blocks Americans from doing business with the enterprise operating under the Ministry of Natural Resources and Environmental Conservation.[19]

            Myanmar’s gemstone industry has long funded the military and has previously been boycotted to undermine a regime accused of genocide.[20] In 2018, the U.S.-based International Campaign for the Rohingya called for a boycott of “genocide gems” in response to the killing of thousands of Rohingya people.[21] The recent coup has made a dire situation worse for Myanmar’s 600,0000 Rohingya people and even more who fled into other countries and Bangladesh “as the result of a brutal counterinsurgency campaign launched by the Myanmar military.”[22]

Myanmar produces massive amounts of rubies, sapphires, and jade that can go for millions through high-end auctions and jewelry retailers.[23] For example, in 2015, two Cartier and Boghossian Burmese rubies were sold at auction for $30.3 million and $18.3 million, respectively.[24] The country’s gemstone industry plays a dominant role in its economy and generates about half the government’s revenue, according to a 2019 UN report on the economic interests of the Myanmar military.[25] The report found that former military officials make up most of MGE’s leadership.[26] Coup leader Min Aung Hlaing and the country’s central bank governor visited the opening of a gems, pearl, and jade emporium in April 2021, further signifying the importance of the industry to the government.[27]

However, it is unclear whether the sanctions will have the desired effect because a number of transactions are not declared, and human rights groups are calling for similar sanctions on natural gas and oil.[28] While the United States has imposed sanctions that effect the gemstone industry, Thailand and China have not, and the countries are a main market for rubies and jade.[29] Further, concerns remain because measures are limited and targeted only on companies directly tied to military leaders.[30] While this seems to focus upon the desired goal without harming smaller, non-military controlled gemstone companies, “Myanmar gem traders have a history of operating in the shadows” and gemstones can be smuggled and sold on the international market under the name of another country.[31]

#Myanmar #Coup

[1] Alice Cuddy, Myanmar Coup: What is Happening and Why?, BBC News (Apr. 1, 2021), https://www.bbc.com/news/world-asia-55902070.

[2] George Petras, Janet Loehrke, & Shawn J. Sullivan, What’s Happening in Myanmar? Military Coup and Protests Explained Visually, USA Today, https://www.usatoday.com/in-depth/graphics/2021/03/20/myanmar-military-coup-protests-violence-deaths-burma-videos/6868486002/ (last updated Apr. 9, 2021, 8:49 AM) (stating Aung San Suu Kyi has been charged with several crimes).

[3] Id.; Clarissa Ward, Brent Swails, Scott McWhinnie, Sandi Sidhu, & Salai TZ, Myanmar Military Denies Responsibility for Child Deaths and Says Elections Could Be Pushed Back, CNN (Apr. 9, 2021, 11:39 AM), https://www.cnn.com/2021/04/08/asia/myanmar-zaw-min-tun-interview-intl-hnk/index.html.

[4] UN Rights Expert Calls for ‘Urgent and Decisive’ Action to Support People of Myanmar, UN News (Mar. 5, 2021), https://news.un.org/en/story/2021/03/1086482; see Spencer Kimball & Christian Nunley, U.S. Imposes Trade Sanctions on Myanmar, Calls on China to Help End Coup as Violence Escalates, CNBC (Mar. 4, 2021), https://www.cnbc.com/2021/03/04/us-imposes-more-sanctions-on-myanmar-calls-on-china-to-help-end-coup.html (“The Commerce Department is imposing export controls on Myanmar’s Ministry of Defense and Home Affairs as well as two corporations closely associated with the military — Myanmar Economic Corporation and Myanmar Economic Holding Limited. Myanmar is also now subject to trade restrictions on certain sensitive items intended for military use.”); Myanmar: US Hits State-Owned Gem Company With Sanctions, BBC News (Apr. 9, 2021), https://www.bbc.com/news/business-56685106.

[5] Petras, supra note 2.

[6] Ward, supra note 3.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Lindsay Maizland, Myanmar’s Troubled History: Coups, Military Rule, and Ethnic Conflict, Council on Foreign Rels. (Feb. 10, 2021, 11:00 AM), https://www.cfr.org/backgrounder/myanmar-history-coup-military-rule-ethnic-conflict-rohingya.

[12] Id.

[13] Id.

[14] Id.

[15] Ward, supra note 3.

[16] Id.

[17] Betsy Klein, US Suspends All Diplomatic Trade Engagement with Myanmar After Weekend of Violence Against Pro-Democracy Protesters, CNN (Mar. 29, 2021, 3:41 PM), https://www.cnn.com/2021/03/29/politics/us-trade-suspension-myanmar/index.html.

[18] Tim McDonald, Myanmar Coup: Could Sanctions on the Military Ever Work?, BBC News (Apr. 9, 2021), https://www.bbc.com/news/business-56248559.

[19] Myanmar: US Hits State-Owned Gem Company, supra note 4.

[20] Josh K. Elliott, ‘Genocide Gems’: Highly-Sought Burmese Rubies and Sapphires May Be Enriching Myanmar’s Military, Global News (Nov. 7, 2018, 7:00 AM), https://globalnews.ca/news/4571806/burmese-ruby-genocide-gem-myanmar/.

[21] Id.

[22] Ashley Westerman, What Myanmar’s Coup Means For The Rohingya, NPR (Feb. 11, 2021, 3:01 PM), https://www.npr.org/2021/02/11/966923582/what-myanmars-coup-means-for-the-rohingya.

[23] Elliott, supra note 20.

[24] Rachael Taylor, Myanmar Sanctions Take The Shine Off Burmese Rubies, Fin. Times (Apr. 9, 2021), https://www.ft.com/content/05ce073b-9fb6-4804-a7df-72d2f31826dd.

[25] Myanmar: US Hits State-Owned Gem Company, supra note 4.

[26] Id.

[27] Elaine Kurtenbach, US Sanctions on Myanmar Gems Target Key Junta Funding Source, Associated Press (Apr. 9, 2021), https://apnews.com/article/business-myanmar-7e36933eab4f4212ff1096448d97770f.

[28] Id.

[29] Id.

[30] Taylor, supra note 24.

[31] Id.