(This is a leaked cable of US Bangkok Embassy from WIKILEAKS)
 |
| Wikileaks' Julian Assange. |
UNCLAS SECTION 01 OF 02 BANGKOK 000711
DEPT FOR EEB/ESC/TFS
DEPT FOR EAP/MLS
STATE PASS TO USTR
TREASURY FOR OASIA
DHS FOR CBP
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ETRD EFIN ECON PREL TH
SUBJECT: CHANTABURI ARTISANS LAMENT THE LOSS OF THE BURMESE RUBY
TRADE
REFS: A. 08 BANGKOK 3207
¶B. 08 BANGKOK 3703
¶C. 07 BANGKOK 5927
¶D. 07 BANGKOK 6239
BANGKOK 00000711 001.2 OF 002
¶1. (SBU) SUMMARY: Tens of thousands of Thai artisans and traders
have lost employment in what used to be their premier craft: the
cutting and polishing of world-class Burmese rubies. The double
whammy of the U.S. JADE Act and the global economic recession has
thrown the industry into disarray. Thai gem dealers say the idea
that thousands of finished rubies could be identified and documented
from mine to import into the U.S., as required by the JADE Act, is
simply impossible. They hope that self-certifications will suffice
as they try to develop new technology to process African rubies for
foreign markets. END SUMMARY.
¶2. (SBU) Chantaburi city, nestled in the foothills of the mountain
range that separates Thailand from Cambodia, is the gemstone capital
of the country. After the area's own decades-old ruby mines ran
dry, the artisans haved turned in recent years to importing raw
stones on which to deploy their finely-honed skills. Chantaburi
craftspeople produce sapphires, mined in Africa, of world re-known,
but their real passion has been the heating, cutting and polishing
of Burmese rubies.
¶3. (SBU) "This is our art," the Secretary General of the Chantaburi
Gem and Jewelry Traders Association told Econoff on a recent visit.
"No one can finish Burmese rubies like we can and they are the most
beautiful in the world." He went on to explain that the subtle
color and hardness characteristics of different gemstones require
different skills. Those who have made their careers in working
Burmese rubies cannot readily switch their trade to sapphires from
Madagascar, for example, for which there are other artisans with
time-honed skills. Moreover, high-end jewelry houses often design
around particular cuts and colors of stones, which need to be
available in sufficient quantities. "We were the only real source
for the Burmese rubies they wanted."
¶4. (SBU) The U.S. JADE Act and the global economic recession have
thrown Thailand's jewelry and ruby processing industry into disarray
and depression. In its March 3 report on the impact of the JADE Act
on Thai gem and jewelry exports, the Bangkok-based Thai Gem and
Jewelry Association said that gem and jewelry exports last year were
the third largest export product category for the country, employing
over 1.1 million people. However, exports to the U.S., historically
Thailand's largest market, tumbled by a third in the last quarter of
2008, according to the report. Export data is not specific enough
to identify the impact on rubies per se, and the Chantaburi traders
readily admit that they cannot separate out the impact of the JADE
Act from the effects of the global economic downturn as they both
hit at the same time last fall. But the impact on Chantaburi, where
one in six residents is involved in the gem industry, is striking.
The 14 factory and trading house owners with whom Econoff met, said
their business was down between 50 and 90 percent from last year.
¶5. (SBU) In an economy reeling from general economic recession,
whatever hardship is attributable to the JADE Act is obviously not
welcome. The direct impact on official unemployment statistics,
however, is probably not large. The vast majority of gem cutters
and polishers work in family-based enterprises, the Chantaburi
industry leaders told Econoff, and many have other jobs on the side.
Moreover, in the March 3 report, Bangkok industry analysts explain
that the jewelry industry typically will cut executive compensation,
eliminate overtime, and cut-back on hours before resorting to
lay-offs. Nevertheless, the report estimated that 60,000 have
already lost their jobs. In the few factories and shop houses that
Econoff walked through in Chantaburi, many that the owners said had
previously bustled with activity, were empty.
¶6. (SBU) Whatever the actual impact on sales and employment, the
JADE Act has had a clear impact on how the Chantaburi dealers do
business. "I used to keep an office in Mae Sai to handle raw stone
purchases from across the Burmese border," one factory owner told
BANGKOK 00000711 002.2 OF 002
Econoff. "Now I have closed it. With no one buying rubies from the
Thai side, the Burmese smugglers now deal mostly in jade with the
Chinese." Ruby imports from Africa have picked up, but marketers
are scrambling because the American and European buyers that used to
come regularly are nowhere to be seen. Meanwhile, inventories of
gemstones, from all sources, at all stages of production are piling
up. No one is investing in new production.
¶7. (SBU) In conversations with Econoff, the Chantaburi gem
producers seemed quite knowledgeable about the requirements of the
JADE Act, with regard to the need for a documentary trail for
non-Burmese rubies. "But it is just not possible," they claimed.
Neither African mine owners nor governments issue certificates of
origin. African and Thai Customs authorities do not specify rubies
in import/export documents, listing just "gemstones" in customs and
tax documents, but that is largely irrelevant as most raw rubies,
whether from Africa or Burma, are smuggled into Thailand. Moreover,
the costs of producing and maintaining the paperwork trail are
prohibitive, they claim, for all but the most valuable stones.
Matching each finished ruby to a document that identifies it by
weight, color and cut would indeed be daunting, Econoff realized,
when he examined a zip-lock bag holding a thousand 2 millimeter
rubies finished for placement in wristwatch faces. "If the U.S.
authorities will not accept our self-certifications as sufficient
documentation, it is hopeless," the Chantaburi Association Secretary
General said.
¶8. (SBU) But the artisans and gem dealers of Chantaburi are a
resourceful lot. Bad times have forced them into developing new
technologies. Through careful mixing of chemicals and heating
processes, they believe they can get rubies from Madagascar to look
quite similar to the much-prized blood red Burmese stones. High-end
buyers from the U.S. and Europe may not want substitutes for the
real thing, they realize, but perhaps they can expand their markets
domestically and in Asia. Meanwhile, Bangkok dealers speculate that
as the Chinese market becomes more sophisticated, Burmese rubies
will find their way there. Chantaburi craftspeople believe that it
would be years before techniques in China could be developed that
could supplant their skills with Burmese rubies, but that may just
be a matter of time.
¶9. (SBU) Comment: Long accustomed to warm and profitable
relationships with U.S. and European buyers, Thailand's gem dealers
stubbornly cling to the belief that if the U.S. government truly
understood that, from their view, the JADE Act's impact on the
Burmese regime is minimal while its impact on them is huge, surely
we would adjust the law. The March 3 Bangkok industry report claims
that 90 percent of the value of jewelry exported from Thailand is
added in Thailand. Apparently the Chantaburi gem association has
read the Act more carefully. An Association vice president queried
Econoff, "We are never again going to be able to export our Burmese
rubies until there is democracy in Burma, right?"
JOHN
(Obviously, instead of punishing the recalcitrant Burmese Generals
stupid Jade Act has killed the ruby industry in Thailand and a few
ruby smugglers from Burma.)