Burmese gemstones sold in Thailand:
Will sanctions have an impact?
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Today's Bangkok Post carries an AFP article that looks at the problems with enforcing economic sanctions on Burmese gemstones.
Thailand has two border towns on its border with Burma, Maesai in Chiang Rai province and Mae Sot in Tak province. Mae Sai connects Thailand with the Shan States of Burma and Mae Sot connects with Karen State. Both of these towns derive much of their livelihood from the gem trade.
Ordinary merchants not associated with the Burmese government make a lot of money off of processing (firing rubies, cutting, polishing, setting) and then selling Burmese rubies. These merchants in turn employ people and fuel local economies.
The Burmese gemstones that make it into these towns are not the gemstones auctioned off in the large government auctions in Yangon. Whether sanctions on these gemstones should or even can be enforced is an issue. Rubies are not routinely inscribed with identifying numbers as diamonds are (See example1, example2).
Read an article at the Irrawaddy Online on the ongoing Burma gemstone auctions (March 9-20).
Here is the article in full:
Burmese gems may haunt Thai jewellers
Anti-junta boycott could curb exportsJUTARAT TONGPIAM
Thai jewellers are buying highly coveted rubies and jade at an official auction this week in Burma, which supplies stones for the kingdom's booming, multi-billion-dollar jewellery industry.
But once they cut and set the gems, they could face problems selling them as companies and western governments move to ban trade in precious stones from the military-ruled state.
Burma has about $153 million worth of gems on the auction block this week, at the second official sale of the year in a country that produces some of the world's most spectacular stones.
Up to 90% of the world's rubies are from Burma, including pigeon blood rubies that are considered the finest in the world, sometimes costing more per carat than a diamond.
Imperial jade - emerald green in colour - is another Burma treasure that is highly sought after.
However, leading jewellers including Tiffany, Cartier and Bulgari, are refusing to sell the stones in protest at the military's deadly crackdown on pro-democracy protests led by Buddhist monks in September.
Their boycott is backed by tightened sanctions in the European Union, which ban trade in Burma's gems. The United States is also moving to close a loophole in its sanctions regime, which had allowed the sale of Burmese stones as long as they were cut in Thailand.
That has cast a shadow over Thailand's jewellery exports, which rose 33% last year to 185.15 billion baht.
The kingdom's top buyer is the United States, followed by Hong Kong and Australia, according to government data.
"Sanctions over trade in gems from Burma by the US or the European Union will certainly hurt some gem and jewellery exporters in Thailand," said Vichai Assarasakorn, president of the Thai Gem and Jewelry Traders' Association.
He estimated that up to $2 million worth of gems, mainly rubies, were imported into Thailand from Burma each year. But he said there were no official import records, so it's impossible to know the exact amount.
The actual figure could be much higher. Burma sells more than $300 million worth of precious stones every year, and Thailand and China are the two biggest buyers.
Jewellers' associations from around the world plan to meet in Switzerland next month to draft a letter calling on the United States not to ban all sales of Burmese gems, Mr Vichai said.
"The US government and politicians need to thoroughly consider all the information, because their sanctions may not be the right answer to solve the problem," he said.
Thai traders agree with the goal of promoting democracy in Burma, but they say the ban would hurt the 400,000 people in Burma who depend on gem mining and trading to earn a living.
Human rights groups argue that workers in Burma's officially run mines toil in deplorable conditions and are sometimes subjected to forced labour, but Mr Vichai said ordinary people did benefit from the trade.
"The junta might have an amount of gems for its auction sales. But, a greater amount of rubies remain in the hands of ordinary people in Burma who need to trade gems for their living," he said.
Those stones slip into Burma's vast black market, which economists estimate is larger than the formal economy. With scant border controls, small-scale miners can slip across to Thailand to sell their stones, bypassing regulations.
Fewer than 15% of Thailand's imported gemstones come from Burma, said Dej Pathanasethpong, chairman of the Thai Chamber of Commerce's Fashion and Jewellery Industry Club.
He warned that enforcing a ban will prove difficult. "It is not easy to prove the origin of rubies."
Despite growing attention to the gem trade, demand for Burma's rubies has not subsided, said Choosak Tangkoonsombat, manager of Petcharat Import and Export Company.
His company exported 15 million baht worth of jewellery last year to Europe, mostly to France, with many items including rubies and sapphires, he said.
"Red rubies are in great demand and the fine quality ones cannot be found anywhere other than Burma," he said.
Tougher US and EU sanctions have not deterred him from changing his business practices.
"Our business has carried on as usual. Our customers are happy with the products. They did not express any concerns over sanctions on gems from Burma," Mr Choosak said. AFP
Vocabulary:
Maesai, Thailand - Thailand's northern Burmese border town in the Golden Triangle (See Wikipedia)
Mae Sot, Thailand - Thailand's western Burmese border town (See Wikipedia)
derive a livelihood from Y - earn money from doing Y to buy the food, shelter and clothes that your family needs
fuel an economy - keep economic activity going in an economy, keep people buying and selling and making money, keep money coming into an economy
Shan States - the part of Burma bordering Yunnan, China (See Wikipedia on Shan States)
highly coveted - many people want to have
an auction - selling something by competitive bids (See Wikipedia on auctions)
on the auction block - being sold in an auction
rubies - red precious gem stones (See Wikipedia on rubies)
pigeon blood rubies - the brightest and best shade of red found in rubies, commands a high premium over other rubies of similar quality
sanctions - actions taken to punish a country for doing something and to make them stop doing it (for example, restricting investment, trade, relations, and communications with the country)
economic sanctions - restricting economic relations as punishment
enforce economic sanctions - making sure that the sanctions are followed
tightened sanctions - made sanctions stricter
a sanctions regime - a set of actions or measures to punish a country
a loophole - imperfections in a law that allow legal experts to avoid and go around the law (See glossary)
close a loophole - eliminate and end a loophole, so people can no longer go around the law
moving to Y, a move to Y - taking action to Y
moving to close a loophole in its sanctions regime -
cast a shadow over - make a situation gloomy with little chance of success or happiness
Thai Gem and Jewelry Traders' Association - "aimed at protecting and promoting the jewellery industry, the association's primary purpose is to provide those in the industry with a forum for the exchange of views and the gathering of business and market intelligence, as well as achieving growth in its export and domestic sales of gems and jewellery" (See website)
draft a letter - write a letter
toil - work very hard at unpleasant and tiring tasks
deplorable - very bad and immoral
toil in deplorable conditions - work in conditions in morally unacceptable conditions
vast - very large
a black market - usually means goods illegally brought in from a foreign country (See Wikipedia on underground economy)
a vast black market - many goods are brought in from other countries illegally and sold
the formal economy - the non-black market economy
scant - very few
border controls - checking people and things crossing the border between two countries
slip across to Thailand - move secretly from Burma into Thailand, sneak into Thailand
bypassing - going around, avoiding
prove the origin of Y - able to show where Y comes from (for example, from the Burmese government or some other source)
has not subsided - has not decreased
deter X from doing Y - make person X not want to do Y anymore
X have not deterred him from Y - event X has not stopped them from doing Y
did not express any concerns over sanctions - did not seem to be interested in sanctions or worried about their impact on the gem trade
