How to make billions in a conflict zone

Photo: Yin_Min_Tun / CC BY-SA

Myanmar’s jade mining industry pulls in billions of dollars annually despite an ongoing conflict between the military and the Kachin Independence Army. The conflict is deeply tied to the same inequality that pushes workers into the risky and accident-prone mines.


This article is the second part of our coverage on the recent jade mining accident in Myanmar that killed over 170 people. Read the first part here.

The recent accident at a jade mine in Hpakant, Myanmar shows the toll of wealth inequality in Myanmar and how the jade mining industry is intimately tied to ethnic and resource conflicts.

Kachin state, where Hpakant is located, is an active conflict zone. The Kachin Independence Army (KIA) and other groups have fought the Myanmar military for decades, seeking autonomy and control over natural resources like jade.

The issues that lead to fatal accidents at Hpakant are largely similar to those that drive Myanmar’s 70-year civil wars: the benefits of Kachin’s jade are funneled into the hands of a few and the local communities have little control over what happens to their land and resources.

Marginalized jade miners—both migrants and locals—are often recruited to join the ethnic armed groups, including the KIA and the Arakan Army (AA), the group fighting an increasingly violent war against the military in Rakhine state.

A report from Global Witness, an organization monitoring extractive industries, calculated that at its peak in 2014, Myanmar’s jade trade was raking in US$31 billion per year. This would make the trade worth a little less than half the country’s GDP. Other estimates suggest the figure is more like $9 billion.

Regardless, Kachin communities—those the KIA claims to represent—never see most of this money. With both mining companies and workers, much of the money from jade leaves Kachin. According to the Burma Environmental Working Group, most jade mining companies partner with state-owned enterprises, including the military’s Union of Myanmar Economic Holding Limited (UMEHL). These enterprises were sanctioned by the US and EU states until 2016.

Much of the revenue from jade also never ends up on state records, much less in government coffers. In 2014, Myanmar Gems Enterprise reported the country officially sold US$1.5 billion in jade, but UN statistics show China imported $12 billion in jade from Myanmar. Keeping the trade “off the books” allows companies to bring in higher profits and skirt regulations.

As one Global Witness analyst put it a few years ago, “Myanmar’s jade business may be the biggest natural resource heist in modern history.”

Jade mining continues amid civil war in Kachin state

Large-scale jade mining in Kachin state began after the KIA and the military signed a ceasefire in 1994 that brought Hpakant back under government control. But the ceasefire collapsed in June 2011 and the area once again became an active conflict zone. Since then, the fighting has displaced at least 100,000 people, many of them now living in camps just a few kilometers from Hpakant’s mines.

The KIA hasn’t regained control of the mines, but the armed group still raises revenue from mining companies that transport jade through KIA territory and from facilitating cross-border trade into China.

The revenues from jade take on new meaning when compared to the incomes of those who work in Hpakant’s mines. The median monthly income among the 400,000 informal jade pickers in Kachin is US$266, or just over 360,000 kyats—significantly more than the country’s average monthly income of $124. Those who get jobs with mining companies may make more, but they often don’t.

The conflict in Kachin is about inequality, as much as identity or self-governance. As Khine Win, director of the Sandhi Governance Institute in Yangon, wrote in a column for The Irrawaddy, “Myanmar is where it is today because of a highly unequal distribution of assets and resources.”

As Cardinal Charles Maung Bo, Archbishop of Yangon, has said, “Myanmar’s resource wealth belongs to the Myanmar people. It does not belong to looters… Where justice is in short supply peace is a distant dream. This world belongs to all, not only [to those] who have arms and armies.”

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