BANGKOK, Oct 4 (Reuters) The gem merchants of Bangkok display their glistening wares proudly; diamonds from Africa, sapphires from Sri Lanka and rubies, of course, from Myanmar.
The red stones from the country formerly known as Burma are prized for their purity and hue. But they have a sinister flaw.
The country's military rulers rely on sales of precious stones such as sapphires, pearls and jade to fund their regime. Rubies are probably the biggest earner; more than 90 per cent of the world's rubies come from Myanmar.
International outrage over the generals' brutal crackdown on pro-democracy rallies encouraged the European Union this week to consider a trade ban on Myanmar's gemstones, a leading export earner in the impoverished country.
There is also pressure in Washington to close a loophole on existing US sanctions which allows in most of its precious stones.
But in neighbouring Thailand, where the majority of Myanmar's gems are bought and sold, the stone merchants have yet to be put off business with the junta.
''People are unhappy about what's going on but they are not angry enough to stop buying rubies,'' said Pornchai Chuenchomlada, president of the Thai Gem and Jewellery Traders Association.
''If they killed a lot of people like they did in 1988 we might consider banning their products,'' said Pornchai, adding that he personally bought little from Myanmar on moral grounds.
Official media say 10 people were killed when soldiers fired on protesters, including Buddhist monks, in downtown Yangon last week, but the real toll is thought to be much higher.
The junta killed an estimated 3,000 people during the last major uprising in 1988.
VALLEY OF RUBIES Myanmar's generals are estimated to have earned around 750 million dollars since they began holding official gem and jade sales in 1964. A far bigger number of precious stones are smuggled over the border into Thailand and China.
The official expositions, held twice a year in the tropical heat of Yangon, are increasingly popular. More Chinese bidders are attending, attracted by slabs of jade.
The state holds a majority stake in all mining operations in Myanmar, including the ''Valley of Rubies'', the mountainous Mogok area, 200 km (125 miles) north of Mandalay, famed for its rare pigeon's blood rubies and blue sapphires worth tens of thousands of dollars apiece.
Conditions in the mines, off-limits to outsiders, are reported to be horrendous.
Debbie Stothard of the Alternative ASEAN Network on Burma said her organisation had reports of mining operators hooking employees on drugs to improve productivity. Needles are shared, raising the risk of HIV infection, she said.
''Heroin is given to people at the end of the working day as a reward,'' said Stothard. ''Young people go off to the mines with big hopes and dreams and they come back to die.'' ''These rubies are red with the blood of young people.'' REVULSION Couples buying engagement rings often now ask where the diamonds come from since last year's Hollywood film ''Blood Diamond'' raised awareness about gems which finance conflicts.
But even during the late 1990s, when war was still raging in Sierra Leone, where the film was based, only between 4 percent and 15 percent of the world's diamonds were estimated to have come from conflict zones.
Brian Leber, a third generation jeweller from the US state of Illinois, decided years ago to stop buying Myanmar gems.
''I think it's more important to sleep at night,'' said the 41-year-old who founded The Jewellers' Burma Relief Project, an organisation that supports humanitarian projects in the country.
Although the United States imposed a ban on imports of Myanmar gems in 2003, a customs loophole allows in stones cut or polished elsewhere. As Myanmar exports virtually all its gems uncut, this interpretation rendered the ban useless.
Leber is hopeful last week's brutal crackdown will convince US lawmakers to close this loophole. He would like to see consumers shun all gems from Myanmar, whatever their cachet, until the generals are gone.
''For the time being, Burmese gems should not be something to be proud of. They should be an object of revulsion.'' In Bangkok, some dealers have stopped handling stones from Myanmar and they are angry that colleagues haven't followed suit.
''This is a Buddhist country. I was expecting the price of rubies to drop dramatically after they shot at the monks, but I'm beginning to think these people are hypocrites,'' said one Bangkok-based jeweller, who declined to be named.
''It's the only country where you can get really top quality rubies, but I stopped dealing in them. I don't want to be part of a nation's misery.'' ''If someone asks for a ruby now I show them a nice pink sapphire.'' REUTERS JK BD1509