World on Fire - Brownstein, Michael [14]
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In addition to teak, Burma is famous for her gems: pigeon-blood rubies, ultramarine sapphires, and imperial jade. Prior to 1989, under Burmese-style socialist rule, only the state was permitted to engage in gem mining and gem sales. Thus in the 1980s, when a private miner discovered, and then sold on the black market, a raw ruby weighing an incredible 469.5 carats, he was promptly arrested and imprisoned. SLORC recaptured the ruby in 1990 and proudly proclaimed it the property of the state. Christened Na Wa Ta, or the “SLORC ruby,” its picture was displayed across the country in the state-owned Working People’s Daily. (Around the same time, the government also announced the discovery of two raw sapphires, one weighing 979 carats, the other around 1,300 carats.) During the socialist period, when all industry was nationalized, the Burmese government sold gems to foreign companies by holding annual “gem emporiums.” Private gem sales were conducted underground by hundreds of traders operating largely out of Mandalay’s 34th and 35th Street black markets.
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In a watershed pro-market reversal, the Burmese government in the early nineties privatized much of its gem industry. Since 1995, private mining concessions have been sold on the basis of competitive bidding, costing as much as $83,000 per acre for virgin gem mines. Once again, virtually all the concessionaires have been Sino-Burmese businessmen. One Chinese-owned jewelry company reportedly controls 100 gem mines and produces over 2,000 kilograms of raw rubies a year. Lo Hsing-han’s visible holdings, valued at an estimated $600 million, include valuable ruby concessions as well as “a mining stake in the northern ‘jade rush’ town of Phakent—said to harbor a 300-ton jade boulder, buried so deep in the jungle it can’t be moved.” Lo’s Asia World conglomerate is now the most popular partner for foreigners investing in Burma. Along with private mining, SLORC also legalized private gem sales. Today, Burma’s gem industry is dominated by thriving Burmese Chinese at every level, from the financiers to the concession operators to the owners of scores of new jewelry shops that sprang up all over Mandalay and Rangoon.
10 Needless to say, SLORC officials are also handsomely paid off at every level.
It is an understatement to say that, in terms of financial and human capital, the vast majority of indigenous Burmans, roughly 69 percent of the population, cannot compete with the country’s 5 percent Chinese minority. Three-quarters of the Burmans live in extreme rural poverty, typically engaging in paddy production or subsistence farming. Despite land reforms during the socialist era, an estimated 40 percent of Burman peasants are landless. For rural Burmans, saving money is virtually impossible; anything earned is spent just to stay alive. As a result, most Burmans have little or no capital and have not profited from economic liberalization.
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Lack of financial capital is not the only problem. Since abandoning socialism in 1988, SLORC has slashed real spending on health and education. According to United Nations agencies, nearly 40 percent of Burmese children never enroll in school and up to 75 percent drop out before the fifth grade. Moreover, because of the ruling junta’s paranoia about student-led civil unrest, Burma’s universities were closed for three-and-a-half years, until July 2000. Human capital levels among indigenous Burmans are thus abysmal. All these factors, along with possible cultural obstacles—some have suggested that there is a native prejudice against “greedy” profit-seeking—make it extremely difficult for Burmans to compete in a market economy.
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In urban areas, Burmans may actually have