“More merchants will arrive,” the newspaper predicted.
But dealers and a trader based in Yangon, Myanmar’s commercial capital, say sales of precious stones — a financial lifeline for the nation’s cash-strapped economy — are slumping. They say the gem exposition and auction in Yangon, the first since the junta’s suppression of popular protests drew international criticism and the threat of United Nations Security Council sanctions, has been unusually quiet.
“Business is very slow, not like before,” U Kyaw, a gem merchant in Yangon, said by phone.
The threat of sanctions by the United States and European Union that would prohibit the import of Burmese gemstones has dented dealers’ confidence, which could prove a serious problem for the junta that has ruled Myanmar, formerly Burma, for 18 years. Last year, the gem trade generated $296.9 million for the state-run Myanmar Gems Enterprise, the third-largest revenue earner for the military government after fossil fuels and timber.
Adisak Thawornviriyanan, director of the Gems and Jewelry Traders Association of Chanthaburi, a province east of Bangkok that is a center for cutting and polishing Burmese gems, has taken part in the gem auctions for the past four years but decided not to attend this one.
“We will wait and see if we can sell our old stock, but I wouldn’t dare buy more,” Mr. Adisak said. “We don’t know how strong the U.S. ban will be.”
Cartier of Paris joined Tiffany and Signet last month when it banned Burmese gems.
Jewelers of America, which represents about a third of the jewelry shops, announced Oct. 9 that it was backing the tougher ban on Burmese gems being considered by the United States.
A bill in Congress seeks to close a loophole that allows the import of Burmese gems polished or cut in a third country. It was passed by the House Foreign Affairs Committee last month and awaits approval by the Ways and Means Committee before going to the full House. A Senate bill is in committee.
Rubies are the most popular Burmese gem in the United States, with official imports of $87.4 million in 2006, mostly via Thailand, the main trading and polishing center for Burmese colored stones. Unofficial imports are probably much higher.
Should Congress pass the bill, as seems likely, countries like Japan and China might make up some of the lost sales, said Sean Turnell, an expert on the Burmese economy with Macquarie University in Sydney, Australia. Smuggling will also mitigate the boycott and trade curbs, he said. But he predicted that a decline in demand from the United States and European Union would cause Burmese gem prices to drop.
The boycotts could also make it harder for generals and Burmese business executives to move their assets out of the country. In the absence of a stable currency and with restrictions on holding dollars in Myanmar, “gems perform a very important function in moving personal assets around the deck,” Mr. Turnell said.
The boycotts and threat of sanctions have spawned a passionate but familiar debate over whether the measures influence governments.
“If the U.S. and the E.U. were to cease buying all Burmese gemstones, I think it would take a huge chunk out of the regime’s pocket,” said Brian Leber, a jeweler based near Chicago who is leading lobbying efforts to halt all imports of Burmese gems.
Critics of sanctions say they will hurt those Burmese miners who earn their money independently from the government, often by smuggling gems to Thailand.
“This is going to be absolutely devastating to the people that deal with gems,” said Edward Boehm, vice president of the International Colored Gemstone Association. “Most of the mining that is done is artisanal and falls out of the radar of the government.”
Mr. Leber said the biggest beneficiary of the gem trade is the military-controlled government.
“There’s an argument that this is only hurting the little people,” he said. “There really aren’t little people who have direct control over things in the gem industry.”
How accurately gems can be identified as being of Burmese origin has sparked debate. Mr. Leber and other gem experts says rubies can be identified by chemical signatures.
But Henry Ho, a jeweler in Bangkok who has long dealt in Burmese gems, says ultimately gem trading is based on trust.
“Only God and the miner know where the gems come from,” Mr. Ho said. “God doesn’t speak to you, and the miner will lie about it.”
Source: nytimes
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