Burma's Blood-colored Gems
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Burma's Blood-colored Gems

By Mick Elmore/AP Writer/Bangkok Friday, November 16, 2007


Burma's Blood-colored Gems

By Mick Elmore/AP Writer/Bangkok

Burmese rubies are indisputably the world's finest, but their rich red hue is reminding an increasing number of international gem dealers of the bloody suppression of democracy advocates by Burmaโ€™s military junta.

The regimeโ€™s brutal crackdown on Septemberโ€™s demonstrations has renewed calls to boycott precious stones exported and smuggled out of Burma, one of the world's top gem producers.

"There is a growing awareness that it is a fascist regime," said Brian Leber, an American gem dealer pushing for a boycott of "blood rubies."

"Considering what this regime has done to its own people, we're troubled to see that a precious stone is offering such a great source of cash for them," he said in a telephone interview from the Chicago suburb of Western Springs, Illinois.

Organizing a boycott would prove difficult, however. More than 1,500 people from some 20 countries registered for a gems auction that opened in Rangoon on Wednesday, despite the boycott calls.

"The trade in these stones supports human rights abuses," the New York-based Human Rights Watch said in a statement this week. "The sale of these gems gives Burma's military rulers quick cash to stay in power."

The ruby trade certainly puts money in the pockets of the junta, which controls mining concessions, but itโ€™s difficult to assess just how much they earn in view of the secrecy shrouding the gems trade.

In 1964, Burma introduced an annual gems auction, which became a biannual event in 1992, and later spawned a third annual sale.

The government boosted trade still further, and moved to combat smuggling, by enacting the New Gemstone Law in 1995, allowing people in Burma to mine, produce, transport and sell finished gems and jewelry at home and abroad, as long as they paid tax on their earnings.

Nevertheless, most rubies are trafficked as rough stones dug out of mountainsides in the Mogok and Mong Hsu mining areas of northeast Burma. From there they travel a long, perilous journey over mountains, through jungles and insurgent-prone areas, changing hands several times on their way to Thailand.

There, the rough stones are heat-treated with chemicals at high temperature for long periods to bring out the brilliance of the color and clear away small cracks.

Once cooked, cut and polished, the gems are sold to foreign buyers who in turn sell them to jewelers around the world.

On the journey from mine to the world's ritzy jewelry shops, the gems change hands four to six times, with the price increasing 20 percent to 30 percent with each change, dealers in Thailand said.

The biggest price jump depends on the success of the heat enhancement. If done carelessly, the process can split the stone and make it almost worthless; handled correctly, a ruby can be worth more per carat than a diamond.

The biggest and best stones can fetch millions of dollars or euros at auctions. Christie's auction house, on its Web site, lists a ring set with an 8.62 carat ruby which sold for US $3.6 millionโ€”or a record per carat price of $425,000โ€”in February 2006.

The vast majority, however, are stones of up to 2 carats which miners in Burma sell for just a few dollars and end up in jewelry shops with price tags ranging from a few hundred to several thousand dollars.

Gem smugglers bypass the state-owned Myanmar Gem Enterprise that oversees the industry and runs the auctions in Rangoon. Myanmar Gems Enterprise said it generated sales of nearly $300 million in fiscal year 2006-2007, according to Human Rights Watch.

Jade is the biggest earner, with more than 90 percent sold to China. Rubies are a distant second, with 85 percent of them going to the US, EU countries and Japan. Burma also exports sapphires and pearls.

Dealers in Bangkok estimate the generals earn at least $60 million annually from gems, but some say the amount could be 10 times that.

Whatever the figure, a growing number of dealers want to deny the junta any windfall from rubies.

But imposing sanctions would be fraught with problems. The industry would have to ban the trade in rubies almost altogether for the embargo to work, said P J Joseph, a teacher at the Asia Institute of Gemological Sciences, a school and laboratory in Bangkok.

"Things are stacked against the embargo working,โ€ he said.

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