Myanmar junta’s latest cash grab highlights need for stronger international response

The Myanmar military regime begins a five-day international jade and pearl emporium in Nay Pyi Taw on Friday in its latest attempt to procure foreign currency by looting the country’s natural resources. Sources indicate the military stands to earn from 40-50% of the value of total sales from taxes on sales and through lots sold by its companies and crony networks.

According to state media, the planned “mini gems emporium” is only for registered local traders, but Global Witness has received information that foreign merchants have arrived in Nay Pyi Taw for the event. Sales of jade will reportedly be made in euros and pearl sales will be made in dollars, despite sanctions by both the EU and US on the Myanmar Gems Enterprise (MGE) and Myanmar Pearl Enterprise (MPE). Down payments of US$2,000 dollars are required to participate in the purchase of pearls, according to a programme Global Witness has seen.

“The very fact that the junta is hosting an international gems fair in the midst of the country’s widespread economic and political turmoil shows its desperation to secure internationally-traded currency,” said Hanna Hindström, Senior Campaigner for Myanmar at Global Witness. “These funds will assist the military to prop up its illegitimate regime and finance the purchase of weapons used to violently oppress the country’s population.”

Underscoring the importance of this revenue, the military held an earlier gemstone emporium in April that resulting in around US$22 million in sales, according to its own media.

A number of entities sanctioned by the EU, US and UK are understood to be trading at the fair, including MGE, MPE, Myanmar Imperial Jade/Myanmar Economic Holdings Limited as well as companies connected to the State Administration Council (SAC). The military has long controlled Myanmar’s extractive sector, with previous military governments awarding licences to themselves, cronies and armed actors in exchange for political support.

While all gemstone mining in Myanmar is now illegal following a suspension of the licencing process by the deposed National League for Democracy government, reports suggest that some companies are still mining and others may still have significant stockpiles. The National Unity Government (NUG) has previously stated that companies that participate in gems emporia will be blacklisted and legal measures will be taken against them in accordance with existing laws.

“There needs to be much stronger international action to ensure that the military cannot make the natural resource sector a lifeline for its illegitimate regime. This must include banning the import of jade and gems from Myanmar, as well stricter financial and banking sanctions to cut the junta off from the international financial system,” said Hindström.

The Myanmar Economic Bank handles foreign currency transactions linked to the Myanmar Gems Emporium. MGE and MPE will also have accounts with the Myanmar Foreign Trade Bank, which connects the SAC to the international financial system through dozens of overseas correspondent accounts.

Since taking power in a coup in February 2021, the military-run SAC led by Senior General Min Aung Hlaing has murdered over a thousand people, including children, arrested thousands more, with many facing torture in prison, and indiscriminately targeted civilians as part of its crackdown on the pro-democracy movement. Earlier this month Myanmar’s democratically elected leader Aung San Suu Kyi was sentenced to two years in prison on trumped up charges imposed by regime.