In the current climate of economic uncertainty and fear that the global currency system is unraveling, there has been a rush on buying gold.
With the threat of sovereign defaults, a new and more sinister currency is emerging in China – elephant ivory.
According to a recent investigative report released by the International Fund for Animal Welfare (IFAW), the legal sales of ivory stockpiles in 2008 spurred demand for elephant ivory, particularly in China where it is coveted by wealthy Chinese people as a form of “white gold”. (1)
The growing fashion for elephant ivory to be being used as an investment vehicle in China coincides with the, “…extraordinary surge in the number of elephants being killed for their ivory. (2)
Ivory Trade a Lucrative Business
With the Chinese Yuan gaining value over the waning U.S. dollar, buying and selling ivory has become a ‘lucrative business’, as Grace Gabriel, Asia Regional Director for IFAW, stated in a IFAW report titled ‘Making a Killing: A 2011 Survey of Markets in China’:
“Elephant ivory has, in a manner of speaking, become a new currency in China. The escalating demand has sent the price of ivory soaring. Couple that with the strengthening of the Chinese Yan against an ailing U.S. dollar, and suddenly buying ivory in Africa and selling it at a huge profit in China becomes an extremely lucrative business.” (3)
In its introduction, the IFAW report refers to the ivory seizures that occurred in 2011 as being “unprecedented”, and that last year 5,259 elephant tusks were seized across the world, representing the lives of at least 2,626 elephants. (4)
The paper goes on to say that China attempted to control the domestic ivory market by initiating an ivory product certification system in 2004 that meant ivory products would have to meet conditions required by the Convention on International Trade of Endangered Species of Fauna and Flora (CITES).
Unfortunately, despite those efforts, China continues to be the world’s leading receiver of smuggled ivory.
However, what is interesting is that although the IFAW referred to there being an ‘unprecedented surge in ivory seizure’ in 2011, a different article on the IFAW site mentions the ‘resurgence’ in elephant poaching we are seeing today as reminiscent of the ivory wars of the 1980s. (5)
The Ongoing Slaughter of Elephants
According to Discovery News, during the 1980s there was a ‘horrific slaughter’ of elephants, where between 700,000 to 1 million elephants were killed for their tusks.
In order to end the horrendous slaughter of elephants, in 1989 the CITES ban was introduced that seriously punished anyone found trading in the luxury, which was then also referred to as “white gold”. (6)
So how could the world have regressed to a condition of elephant slaughter once more?
Besides economic uncertainty powering crime and corruption, the power of the CITES ban – which essentially worked by making any African ivory on the market immediately identifiable – waned in 1997. According to News Discovery, the ban lost its power when CITES allowed for the first time, several one-time exemptions that allowed single sales for counties to sell their stockpiles of ivory.
It was CITES hope that allowing one-time exemptions would help meet demand and therefore lower the prices poachers could get for ivory goods. However instead, with legal ivory back on the market, it became difficult to tell the difference between the legal, stockpiled goods and the poached ivory products. (7)
As Grace Gabriel says in the IFAW report:
“The CITES stockpile sales were supposed to reduce the illegal trade and the slaughter of elephants by saturating the market with illegal ivory; in fact, the exact opposite has occurred. Legal ivory imports have provided opportunities for illegal ivory to be whitewashed in China.” (8)
Economics a Large Factor
The resurgence in ivory wars, according to the IFAW, included a whopping 23 tonnes of ivory tusks confiscated in 2011 alone. The blame for that can not be placed entirely at the door of CITES.
In times of fiscal desperation, people will go to desperate extremes to what essentially boils down to ‘making money’.
A recent report in the Telegraph stated that the growth of the world money supply has dropped to the lowest level since the financial crisis of 2008- 2009, heralding a severe economic slowdown later this year unless authorities rapidly take action. (9)
There is no doubt that the ‘insatiable demand’ for ivory as an investment, which has led to a threefold increase in the wholesale price of ivory, has been fueled by the world’s money supply dropping to alarmingly low levels. Unfortunately, that demand has resulted in the unspeakable slaughter of wild elephant populations.