RANGOON — The Myanmar Gem Entrepreneurs Association (MGEA) said that its chairman Tay Za, a well-known business crony of Burma’s military, wants to resign from his position. The organization claims that it wants him to stay on, despite the fact that he is on a US sanctions list.
Tay Za presented his resignation letter in December citing health reasons and because he wanted to focus on “religious and social work,” MGEA’ s first secretary Kyaw Htay said during a press conference in Rangoon on Friday.
In response, the association called an emergency meeting on Jan. 26 to ask him to remain chairman until 2014. “We still need our chairman’s leadership. We request him to serve until our goals are reached,” Kyaw Htay said, adding that MGEA was awaiting Tay Za’s reply.
“Our association is going to implement a tax-free, value-added gem market, with an international standards gem laboratory as was instructed by our chairman,” he said, referring to a government-backed plan to open a gemstone trade and processing center in the capital Naypyidaw.
Tay Za has been MGEA chairman since 2007. After experiencing a helicopter crash on a mountain in Kachin State in February 2011, he also wanted to resign but the association convinced him to stay, according to Kyaw Htay.
The tycoon, who is in his late 40s, built a business empire by using his close connections with the powerful generals that ruled Burma until 2011. His company Htoo Trading Co. runs an airline, a bank, several hotels, and has interests in mining and agriculture.
Tay Za is on a Western sanctions list. In 2008, the US Treasury Department called him “an arms dealer and financial henchman of Burma’s repressive junta.”
Kyaw Htay maintained, however, that Tay Za was not resigning because his record was harming the MGEA, adding, “Our chairman has good reputation.”
He denied that Tay Za’s possible departure was an attempt to clean up Burma’s jade and gem industry, which also remains under US sanctions. “If our chairman is removed from his post, will the US government even remove sanctions on the gemstones industry or not?” Kyaw Htay asked.
The trade in gemstone resources has long served as a major source of revenue for Burma’s military and ruling elite, and their business cronies. US sanctions restricted trade in the stones but the measures have had little effect, as most jade and gems are sold to China and other Asian countries.
Last year, the US suspended some sanctions against Burma following political reforms. Restrictions on individuals connected to the previous regime and businesses such as the gemstone trade, remain in place.
Despite MGEA’s denials, there are some who say that Tay Za’s resignation is an attempt to clean up the industry’s reputation abroad.
Upper House member Hla Swe told Radio Free Asia on Jan. 18 that Tay Za’s resignation was connected to his listing in the US. He submitted a proposal to create a gem industry hub in Naypyidaw to Parliament in January.
It said Western sanctions remained a major obstacle for developing the lucrative industry, while noting that Tay Za’s chairmanship of the sector was not helping this situation.
Burma produces 90 percent of the world’s rubies, sapphires and fine-quality jade. It holds several sales fairs per year with sales valued at billions of dollars. Most gem buyers come from China.
However, officials have said that gem sales have slumped after China’s economic growth slowed down and the Chinese government increased import taxes on Burmese products, doubling the taxes on jade and gems from 15 percent to 33 percent last year.