Banned. Burmese gems in the crossfire

Chevron: 1; Burmese: 0

by Richard W. Hughes

On July 29th 2008, US President George W. Bush signed into law the Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of 2008, which modifies the Burmese Freedom and Democracy Act of 2003 (H.R. 2330). This updated act prohibits "substantial transformation" being used to import Burmese jade or ruby. Despite what has been represented as a "loophole," the concept of substantial transformation is a basic tenet of international law, one that has allowed "Israeli" and "Belgian" diamonds" access to consumer markets, despite the fact that the earth in neither Israel nor Belgium has ever yielded even a single diamond.

Already, certain members of the US gem trade are patting themselves on the back, having stood up to the nasty Burmese junta. What none of the sanctions supporters mention is that this act is chock full of lies, damned lies and misleading statistics.

Playing numbers

Junta revenue numbers for gems mentioned in the Act are a fantasy. Claims that the junta earns $300 million a year from the sales of gems are based upon gross gem auction proceeds, but in reality many of the lots sold at auction are owned by private parties, not the junta. The junta takes just a 10% tax on exports. What this means is that if an auction sale is closed at $1000, the buyer pays the MGE (a junta concern) $1000, and the actual owner of the gem gets $900. For that $1000 purchase, MGE collects a measly $100, far less than the pound of flesh the US government extracts from each of its citizens to fund its endless overseas wars and occupations.

And what of the stones not sold at auction? Every $1000 ruby or jade that crosses the Burmese border without government sanction employs and nurtures countless ordinary miners, cutters, traders and their families.

Gapminder.org graph of health versus wealth

A typical market scene in Mogok. Those who have never experienced Burma with their own eyes often rely on stereotypes such as the notion that the Burmese junta has complete control over the gem business. Such is not the case, as the above photo demonstrates.

The Act states:

The SPDC [Burmese junta] seeks to evade the sanctions imposed in the Burmese Freedom and Democracy Act of 2003. Millions of dollars in gemstones that are exported from Burma ultimately enter the United States, but the Burmese regime attempts to conceal the origin of the gemstones in an effort to evade sanctions.

This is pure and simply a lie. The Burmese junta openly sells their goods at auction as being from Burma, because the reputation of Burmese gems is second-to-none. It is foreign buyers of these goods who are forced to misrepresent their origin because of the sanctions.

The charade continues:

It is the sense of Congress that the United States should lead efforts in the United Nations Security Council to impose a mandatory international arms embargo on Burma, curtailing all sales of weapons, ammunition, military vehicles, and military aircraft to Burma until the SPDC releases all political prisoners, restores constitutional rule, takes steps toward inclusion of ethnic minorities in political reconciliation efforts, and holds free and fair elections to establish a new government.

Not withstanding the inconvenient truth that it is the US who is the world's biggest arms trafficker, (including sales to such shining lights of democracy as Afghanistan, Algeria, Pakistan and Uzbekistan), expecting the Burmese military to "hold free and fair elections" is a psychotic crack-pipe delusion.

Grease

But the biggest whopper of all is right here:

(13) The leaders of the SPDC will have a greater incentive to cooperate with diplomatic efforts by the United Nations, the Association of Southeast Asian Nations, and the People’s Republic of China if they come under targeted economic pressure that denies them access to personal wealth and sources of revenue.

Targeted? In the back-slapping congratulatory press releases (and even advertisements) following the Act's passage, none of the sanctions advocates mention that Section 15 of the bill just signed into law includes an exclusion of US oil giant, Chevron,1 from the Act.

(4) The executive branch has in the past exempted investment in the Yadana pipeline from the sanctions regime against the Burmese Government.

(5) Congress believes that United States companies ought to be held to a high standard of conduct overseas and should avoid as much as possible acting in a manner that supports repressive regimes such as the Burmese Government.

(6) Congress recognizes the important symbolic value that divestment of United States holdings in Burma would have on the international sanctions effort, demonstrating that the United States will continue to lead by example.

(b) STATEMENT OF POLICY.—

(1) Congress urges Yadana investors to consider voluntary divestment over time if the Burmese Government fails to take meaningful steps to release political prisoners, restore civilian constitutional rule and promote national reconciliation.

(2) Congress will remain concerned with the matter of continued investment in the Yadana pipeline in the years ahead.

(3) Congress urges the executive branch to work with all firms invested in Burma’s oil and gas sector to use their influence to promote the peaceful transition to civilian democratic rule in Burma.

 

Thus while the gems get banned by force of law, Chevron, which maintains a 28% “non-operated” interest in Burma’s Yadana natural gas pipeline project, is merely "urged" by Congress to stop doing business in Burma. That some members of the US gem trade would buy into this charade is not simply sad, but frightening.

Tomfoolery

This bill was sponsored by (and later named after) the late Rep. Tom Lantos, who was quite a piece of work himself. In 1991, Lantos was involved in bringing a fake witness in front of Congress in an effort to sway US public opinion to support the first US Gulf War. Lantos also had the ignominious distinction of being among a group of top US officials that have been accused by ex-FBI whistleblower, Sibel Edmonds, of involvement in illegal drug, weapons and nuclear technology trafficking.

Do as I say, not as I do

It is sad that those who proclaim support for freedom and human rights have no problem dirty dancing with the likes of the Bush administration, Chevron and Tom Lantos—when it suits their purposes. But who's using who? This Act pays lip service to notions of "the people" and "democracy;" in reality, the beat goes on.

There is much that is abhorrent about the Burmese military junta and to compare it to the US government is perhaps unfair. But perhaps not. In just the past few years, the US invasion of Iraq has resulted in tens or even hundreds of thousands of innocent deaths and the largest refugee crisis outside of Darfur. By any measure, these numbers far exceed the recent deaths in Burma or Tibet. And yet so many Americans focus on Burma and Tibet, blind to their own government's crimes.

Don't they understand that Burmese and Chinese and Tibetans—both inside and outside those respective governments—can see the hypocrisy? Do Americans and others in the West really believe oppression blinds their eyes?

The legislation just passed will do absolutely nothing to help the situation in Burma (and will likely do harm). Instead, like a conjurer's trick, the distraction of shiny rocks is used to hide the fact that, for the ultra-wealthy and powerful, it's business-as-usual.

It has been widely reported in the press that the drive to obtain coltan has fueled the tragic civil war in the Congo. Coltan is a primary component of cell phones and computers. One wonders if those at Tiffany, Jewelers of America, Human Rights Watch, Leber Jeweler and others who have advocated so hard for sanctions against Burmese gems have, in solidarity with the people of the Congo, also given up their cell phones.

Towards a lonelier planet

In 2004, one of the leading advocates of sanctions, Brian Leber of Leber Jeweler, stated the following:

The United States, with its formalization of sanctions, is in a key position to set an example that the rest of the world can follow in regards to Burma. Let us do so firmly, yet compassionately.

That sounds a lot like the language of the man who signed this bill into law. Too bad neither have bothered to actually visit the place to determine just where the line falls between carrot and stick.

Human-rights groups, NGO's, jewelry and gem trade associations and "enlightened" firms have advocated that the world should entirely shun the Burmese junta, that no compassionate human being should have any contact whatsoever with such a despicable regime.

Some have even taken the extreme position of suggesting that Burma revert to a blank spot on the map. Towards this aim, a boycott of Lonely Planet has been organized. Their crime? Daring to write a guidebook about such an inconvenient place.

Is this serious? Will Human Rights Watch now become the immigration gatekeeper? Do I need to check with Tiffany before every purchase? Will Leber Jeweler have to sign off on all my future travel plans? Is this freedom, our Orwellian future? If this is their revolution, count me out.

In reality, this act is likely to have about as much impact on Burma's leaders as America's forty-plus year embargo has had on Cuba. Burma's junta is no different than the Castro regime—a small group feeding off a huge population. They won't be missing any meals.

Health through wealth

But what of the impact on ordinary Burmese, some of for whom the mining, cutting and sale of gems is not a "luxury," but their sole livelihood? Supporters of sanctions are silent on this question.

Below is a chart developed by Gapminder.org, brainchild of Swedish economist, Hans Rosling.2 This graph plots the health of nations relative to their wealth. Nepal (until this year a monarchy) and India (democracy) are roughly equal, while China (free-market communist) and Cuba (closed-market communist) are better off. At the top is Iceland (socialist democracy) and Singapore (free-market single-party rule). What this demonstrates is that, in the words of Deng Xiaoping, a cat's color is irrelevant to catching mice.

When it comes to health, what is relevant is wealth. Putting more money in the hands of people is the best way to improve their lives. Whether they suffer under a dictator or exist in a country with free elections, the best way to help ordinary people is to put more money in their pockets. Economic embargos by design do exactly the opposite. They make people poorer. If the rest of the world really wants to help the Burmese people, making them even poorer than they already are is a strange way of showing the love.

Gapminder.org graph of health versus wealth

Gapminder.org's graph of the countries of the world, demonstrating the relationship between money and health. If money equals health, and sanctions are designed to cause economic pain to the country, how does making Burma poorer help the Burmese people? Click on the graph for a larger image or, better yet, visit Gapminder.org for a demonstration.

Us is them

In 1999, American radio host and author, Thom Hartman, was one of a group of forty who were invited to spend a week with the Dalai Lama at his Dharamsala [India] home to talk about what could be done to bring about a world at peace. Hartmann described one of the conversations thus:

There was a strong contingent that wanted the Dalai Lama to call for an economic boycott of China, because China has murdered over a million Tibetans and continues to murder Tibetans and repress that country.

And [the Dalai Lama] argued that if we were to do that, that the economic damage, that the damage to China would harm particularly rural people, but people by and large in China who had nothing to do with the political situation. In fact he said, "Isn't it possible people could die of starvation if China's economy were badly injured"? And one of the fellows who was in our group, who had been one of the leaders of the South African boycott movement said, "Yeah, thousands of people in South Africa died, starved as a consequence of the South African boycott. That's sometimes the price you pay for freedom."

The Dalai Lama said, "Well, if even one child dies as a consequence of actions we take in this room, it's too high a price to pay."

And I've told this story before. Up to that point, I had always felt there was an 'us' and a 'them'; there was me and my friends inside this circle, and then there's this line in the sand around us, and there's everybody else out there, right? And [the Dalai Lama] had come along with his little whisk broom and just brushed away the line, the circle, and said, "Sorry, there's no 'them'; it's all 'us'." And when you get it that it's all us, it kind of changes your perspective on what's the most effective way to do things.

 

Notes

1Chevron famously named a supertanker for the future Secretary of State, Condoleezza Rice; it has contributed to John McCain’s presidential campaign, and at least three of his staffers and fundraisers have lobbied on behalf of the oil giant. McCain’s opponent, Sen. Barack Obama, also has received his share from Chevron.

Simply put, the Yadana project is a cash pipeline for Chevron. In July 2008, oil and gas trade in Burma’s last fiscal year was pegged at almost ten times that of gems and jewelry, growing nearly 300% from the previous year. And Chevron bears no operational burden. In other words, they get the grease without supplying the elbow grease.

The Guardian reported July 23, 2008 that Chevron, the largest U.S. business in Burma, originally was bound by the bill to pull out of the country, but lawmakers lost their nerve because “the US stake in Yadana would be handed over to Chinese or Indian companies if Chevron was forced to sell, the company argued.” The Myanmar Times, in an Agence France-Presse story prior to the Senate vote, quoted a Chevron official as saying that, following a pullout, the oil company would have to pay Burma a capital gains tax, estimated at $500 million.

2Hans Rosling has spent decades focusing on links between economic development, agriculture, poverty and health in Africa, Asia and Latin America. His current work focuses on dispelling common myths about the so-called developing world, which (he points out) is no longer worlds away from the West. In fact, most of the Third World is on the same trajectory toward health and prosperity, and many countries are moving twice as fast as the West did.

 

Further Reading

About the author

Richard Hughes is the author of the classic Ruby & Sapphire. Unless otherwise mentioned, all illustrations/photos © R.W. Hughes.

 

 

Views expressed in this article are the author's opinions alone and do not necessarily reflect the opinions of any organization that employs him. Those organizations bear no responsibility and assume no liability for content on this website, nor are they liable for mistakes or omissions.

 

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Posted August 2, 2008; last updated 7 March, 2013