thaicables – It's Your Right to know the Truth!

09BANGKOK711CHANTABURI ARTISANS LAMENT THE LOSS OF THE BURMESE RUBY TRADE

leave a comment »

“197927”,”3/20/2009 7:43″,”09BANGKOK711″,”Embassy Bangkok”,”UNCLASSIFIED//FOR OFFICIAL USE ONLY”,”07BANGKOK5927|07BANGKOK6239|08BANGKOK3207|08BANGKOK3703″,”VZCZCXRO5141

PP RUEHCHI RUEHDT RUEHHM RUEHNH

DE RUEHBK #0711/01 0790743

ZNR UUUUU ZZH

P 200743Z MAR 09

FM AMEMBASSY BANGKOK

TO RUEHC/SECSTATE WASHDC PRIORITY 6471

INFO RUCNASE/ASEAN MEMBER COLLECTIVE

RUEHAN/AMEMBASSY ANTANANARIVO 0054

RUEHBJ/AMEMBASSY BEIJING 6867

RUEHLM/AMEMBASSY COLOMBO 3616

RUEHDR/AMEMBASSY DAR ES SALAAM 0321

RUEHDBU/AMEMBASSY DUSHANBE 0001

RUEHHI/AMEMBASSY HANOI 7322

RUEHIL/AMEMBASSY ISLAMABAD 3371

RUEHBUL/AMEMBASSY KABUL 0933

RUEHKT/AMEMBASSY KATHMANDU 7477

RUEHTO/AMEMBASSY MAPUTO 0080

RUEHNE/AMEMBASSY NEW DELHI 5540

RUEHCHI/AMCONSUL CHIANG MAI 6340

RUEHHK/AMCONSUL HONG KONG 4930

RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC

RUEATRS/DEPT OF TREASURY WASHINGTON DC”,”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

Written by thaicables

June 13, 2011 at 9:24 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: