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After decades of human rights abuses, Myanmar's generals have recently freed political prisoners, reduced censorship and held limited elections — prompting countries to lift sanctions. But a year-long GlobalPost investigation has found that protests, violence and cronyism are testing Myanmar's reforms — and tarnishing the reputation of Nobel Laureate Aung San Suu Kyi.

Myanmar: Hell hath no fury like Hpakant

Men seek to escape poverty in the jade mines. Instead, it’s the drug dealers and middlemen who get rich.

galleries in the markets and brothels, constructed of plastic sheeting and bamboo. All of these are overseen by the authorities and permitted to operate with requisite bribes.

Meanwhile, HIV flourishes along with addiction and fatal ignorance. “We’d heard of AIDS but didn’t think you could get it from needles,” said La Htoi, who contracted HIV, the virus that causes AIDS, several years ago in Hpakant. “We just thought it was transmitted by sex with prostitutes.”

Forbidden mines

For any enterprise with the capital, connections and stomach to invest in Hpakant, the profit potential is staggering. According to the Harvard report, producing a ton of jade costs less than $500 on average. Sold at government auction in Myanmar’s capital of Naypyidaw, that same ton sells for $126,000.

Myanmar’s jade industry, however, is notoriously difficult to crack.

Hpakant is largely forbidden to foreigners, with the general exception of Chinese businessmen cooperating with the government. It is separated from the nearest provincial capital, Myitkyina, by 100 miles of rutted dirt roads. Passage is regulated by dozens of checkpoints manned by armed guards. Incoming travelers fear relieving themselves on roadsides studded with land mines.

Only about half of the jade extracted in Myanmar is sold on open, taxable markets, according to the Harvard study, led by Southeast Asia-focused economist David Dapice; an estimated 43,000 tons were extracted in 2011, but 21,000 tons vanished into the black market — most of it across the border into China.

This would mean the larger part of Myanmar’s multibillion-dollar jade profits — likely enough to feed, clothe and educate the nation’s 60 million people — is hoarded by a small elite. (Current government budgets for health care and education combined add up to only $1.1 billion.) Business as usual, Dapice wrote in the Harvard report, means that “mineral wealth will continue to be a source of conflict and its value will continue to enrich a few rather than strengthen the entire nation.”

Among the enriched few is tycoon Yup Zau Hkawng, head of Jadeland, Kachin State’s largest locally owned jade firm. His appearance belies his fortunes. Unlike much of Myanmar high society, he is not dripping with jewels; the gems magnate favors L.L. Bean-style lumberjack shirts and a whiskery beard.

Yup Zau Hkawng is an outlier in an industry dominated by military figures and their Chinese partners. He is Kachin, a Christianized, mountain-dwelling minority. The Kachin have long been at odds with the central government controlled by the nation's dominant ethnic group: the Burmese, who are Buddhists. Many of Kachin State’s 1.2 million inhabitants look up to Yup Zau Hkawng as a rare icon of success in a region where few men ever make it off the farm or out of the quarries.

“If you’re an ethnic businessman, it’s hard to fend off the foreigners with tight government connections,” Yup Zau Hkawng said. “Jade is our ancestral business. Yet locals don’t enjoy any of the fruits of this business. It’s unfair that Kachin suffer when cronies get rich.”

Yup Zaw Hkawng, while lacking the KIA’s revolutionary zeal, shares much of their ethos — namely that Kachin State’s precious resources must benefit the native people. This guerrilla militia, borne of battalions trained by the US to fight in World War II, has battled for control of Kachin State since the 1960s. Large swaths of Kachin State, a region rich in timber and gold as well as jade, are controlled by the KIA, which acts as the governing authority in areas abutting the Chinese border.

“We’re also in the jade business, gold mining, logging and collecting tax on the borders,” said Dau Hka, a senior official with the Kachin Independence Organization, the KIA’s political wing.

The 2011-2013 battle between the KIA and the central state over Hpakant’s jade, Dau Hka said, was proof that government vows to settle old disputes are insincere. “On TV, you’ll hear about economic and social betterment,” he said. “But they’re still creating conflicts to expand military power.”

Recent conflict over the mines resulted from the disintegration of a cease-fire agreement, enacted in the mid-1990s, that allowed the KIA and the central state to share the jade wealth. In effect, Dapice wrote, those pacts “did little more than allow the military to continue extracting while letting ethnic militias