Battle over jewel in Burma's crown

Some locals in Kachin state make a living selling small jade stones, but mining has done widespread damage to the environment. Picture / Washington Post

Testing times ahead for Aung San Suu Kyi’s Government in state where the jade trade is big business.

The jade tycoon of Burma lives behind stone walls and a sophisticated security system. A visitor must be buzzed through a gate into the garden, pass a hunk of jade as big as a compact refrigerator, enter through a sliding screen and glide by the preserved tusks of the family elephant before sitting down with the man himself.

Yup Zau Hkawng is a well-known figure in Burma's Kachin state, a broker in the peace process between armed rebels and the military and one of the few ethnic Kachin to own a jade mining business.

Burma's northernmost state is home to 1.2 million people and some of the country's most intractable problems - including a rapacious jade mining culture, opium cultivation, environmental devastation, controversial development deals with China and an armed insurgency.

Kachin may pose one of the stiffest challenges to the new democratically elected civilian Government, led by Aung San Suu Kyi, that has taken over a country that suffered decades of military rule.

Ask Yup Zau Hkawng what the odds are that Suu Kyi and the new civilian leaders will be able to make any headway here, and he breaks into a slow, conspiratorial smile.

"I'd rather say [I] hope than tell you what I think," he said.

At the root of much of Kachin's agony lies the immensely valuable green stone - jade. Activists have charged that families and cronies of the country's all-powerful military are plundering the state's jade and other natural resources, such as timber and gold. Large companies have been working around the clock in the past year to extract as much jade as possible before the new Government comes in, turning mountains into valleys in a matter of weeks.

The trade fuels the traffic in weapons, drugs and gems that flow past verdant poppy fields and over the porous border with China. The insurgent Kachin Independence Army continues to clash with the military over the state's resources, a conflict that has displaced thousands and dates back decades.

"We are so proud that the opposition won the election. It's one more step towards democracy," said Steven Tsa Ji, who runs a network of civil society groups here. "But how can they solve in a five-year period what has happened in 60 years?"

Any trip to Kachin state must start at the meeting place of two small rivers, cool from glacier water coursing from the Himalayas, that join and form the Irrawaddy, the grand river that has almost mystical significance to the Kachin people.

At the confluence, a golden pagoda gleams. Climb into a boat with a puttering engine and, about 30 minutes up a pristine shoreline, seven rusting pylons rise above the water.

This is what exists - for now - of the Myitsone Dam, a massive, 6000-megawatt hydropower plant that, if built, would be one of the biggest in Asia.

The previous military-backed Government in Burma, also known as Myanmar, suspended the US$3.6 billion ($5.3 billion) Chinese project in 2011 after public outcry. Critics said the dam would displace more than 10,000 villagers and cause damage to wildlife and fish populations and, as the river spools south, the rich delta rice paddies.

A man fishes from a small boat near a floating restaurant on the Irrawaddy River. Photo / Washington Post

The hydropower project as originally conceived would have sent most of the electricity generated back to China, even as hundreds of thousands remain off the power grid in Burma.

With the change in government, the Chinese have begun to put pressure on Burma in hopes construction can resume. Speaking to reporters last month, Chinese Vice Foreign Minister Liu Zhenmin said that "how to push this co-operation forward is an important thing for both countries". Suu Kyi, who opposed the project in 2011, has said that the new government would have to review the contract before making a decision.

"There's no way to continue the project," said Ja Seng Hkwan, 50, a state legislator. "If you kill the Irrawaddy, you're killing the whole country."

Control of the state's rich natural resources is at the heart of the conflict between the Kachin and the Government, a conflict dating back to the country's independence from Britain in 1948. The Kachin are largely Christian in a majority Buddhist country.

The Kachin Independence Army and the military renewed fighting near a Chinese-run hydropower plant in 2011, splintering a 17-year truce and displacing an estimated 100,000 people.

Since then, activist groups such as Human Rights Watch have reported that both sides have committed rape, enlisted child soldiers and planted land mines. Because of the fighting, voting was not held in dozens of villages in November's election, which vaulted Suu Kyi and her National League for Democracy into power.

Suu Kyi has said that national reconciliation and a peace accord with the Kachin and other armed militias is one of her highest priorities. But after years of conflict, distrust lingers. And analysts say that both the military and the rebels benefit from the lucrative jade mining business.

In recent years, heavy mining by companies run by military-controlled conglomerates, military cronies and families, or illicit Chinese investors have caused rapid deforestation, pollution of rivers and streams, and landslides that have killed hundreds, according to a report by the group Global Witness. The group estimated that the value of the jade produced in the area in 2014 was from US$12 billion to US$31 billion, and much of it ended up in China.

In an open-air tea shop in the centre of Myitkyina, buyers and jade-pickers illegally buy and sell polished gems and uncut stone, violating Burma's tight laws restricting gem sales and possession of all but the lowest-quality jade.

Naw Khan, 44, said he makes up to US$2000 a month picking stones from refuse dirt piles dumped by the large mining companies. It's a dangerous business, with malaria rampant and the constant risk of landslides. But jade, he said, "can make you be rich in one day".

Recently, about 300 civic activists from the mining area called for a moratorium on mining until new laws and a monitoring system can be set up to prevent the "unlawful and reckless extraction of jade".

Thet Thet Khine, a member of Parliament from Suu Kyi's party, said there was no simple solution.

"She will not destroy these businesses. It's an ethical dilemma. These businesses practise cronyism but at the same time are employing a lot of people. It's a very low priority for her."

Yup Zau Hkawng said the riches from the mines should benefit the Kachin people, not cronies and the military elite. Roads, schools and drug treatment centres are needed.

"Our people are sitting on natural resources and should be rich with it," he said. "But they suffer."