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Viewing cable 09BANGKOK711, CHANTABURI ARTISANS LAMENT THE LOSS OF THE BURMESE RUBY

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Reference ID Created Released Classification Origin
09BANGKOK711 2009-03-20 07:43 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Bangkok
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