By Indrajit Basu
Published on February 18, 2004 By Wahkonta Anathema In Current Events
How many of us check out the goings on in the diamond industries. Do you have any idea the number of interlocking Directorates find thir way through this industry?
If you were thinking India is a third world Country, this will set you to rights. They have manpower which Bill Gates, traded American labor for; temperate zones more diverse than America ( Every industry, every seasonal); every mineral to mine for another century; now we read they are opening up McHospitals to attract importation of medical ailments, with the ailers who can afford it; AND DIAMOND PROCESSING.
Feel free to comment or e-mail: wahkonta@graffiti.net Blog ON.
EXCERPT BEGINS
India's diamond trade reveals flawed side
By Indrajit Basu

KOLKATA - The murder of an Indian diamond trader in Angola last week and the disappearance of the US$1 million worth of diamonds in his possession has rekindled a three-year-old debate on India's probable link with conflict, or "blood", diamonds.

Officially, Ashwani Puri, a top diamond trader from India, was in Angola to seek out prospects for starting a beverage business. But what adds a twist to the tale is his killing, and the theft of the cache of diamonds - widely suspected to be conflict diamonds - that he had reportedly purchased in Angola.

Although Mumbai's diamond merchants are backing Puri's company, Mohan Exports', statement that Puri's death is not linked with conflict diamonds, many are not so sure. Sources say that it would be naive to rule out a possible Indian link to conflict diamonds, since the country is the largest importer of the gemstone, as well as a dominant force in the cutting and polishing of rough diamonds.

"Whoever controls the particular area where the [conflict] diamonds are mined gets hold of the diamonds and would like to get rid of them to make some money. As a result, there would be local people who trade in the diamonds. These people would want to ultimately bring it to India," said Arun Goyal, director of the Academy of Business Studies in India.

Conflict diamonds originate primarily from Angola, Liberia, Sierra Leone and the Democratic Republic of Congo, countries in which rebels or factions - like the National Union for the Total Independence of Angola and the Revolutionary United Front - opposed to internationally recognized governments in those countries illegally mine and trade diamonds for billions of dollars, which fund military action against these legitimate governments. Conflict diamonds are also called "blood diamonds", a suitable name given that over the past decade an estimated 3 million people have died in these wars; women and children have been deliberately mutilated; millions more have been made homeless.

Being the world's largest processor and exporter of precious stones, there are good reasons to believe that some of these conflict diamonds, estimated to form about 4 percent of the global diamond trade, may well be sieving into the India. Nine out of every ten diamonds are imported, cut and polished in the country, which altogether account for 80 percent of the carat weight and 60 percent by value of all of the world's diamonds. Diamonds are one of India's largest exported commodities that fetched the country over $9 billion in revenues for fiscal year ended March 2003. "So," said Goyal, "somewhere along the line the Indian link will have to come in."

There had been much debate as to what constitutes conflict diamonds and the involvement of diamond processing and consuming nations with this controversial gemstone. India, along with a few other countries like Australia, Brazil, Israel, Japan, Korea, the Philippines, Sierra Leone, Thailand, the United Arab Emirates, the United States and Canada - all closely associated with the global diamond trade either as processors or consumers - has been in the middle of this controversy since the United Nations (UN) General Assembly recognized back in November 2000 that conflict diamonds are a crucial factor in the ongoing wars in parts of Africa.

In January 2003, 54 countries including India endorsed a UN initiative called the Kimberley Certification Process. The Kimberley Certification is essentially a certificate from the exporter certifying that all diamonds imported into a country do not come from what the UN calls "conflict areas" - ie, Angola, Liberia, Sierra Leone and the Congo.

But although most Indian diamond traders claim that India strictly enforces the Kimberly Certification against conflict diamonds, and "anyone dealing in such diamonds is ostracized by the diamond trading community", as trading in conflict diamonds flourishes, suspicion of India's links with it, refuses to die.

Much of this suspicion, though, stems from the fact that it is indeed difficult to exercise strict monitoring of the flow of the shunned diamonds. "We don't have much control over the rough supplies," said Sanjay Kothari of the Gem and Jewelry Export Promotion Council. And the Indian embassy in Brussels said, "Once diamonds are brought to the [Indian] market, their origin is difficult to trace, and once polished, they can no longer be recognized."

Meanwhile, Puri's death has revealed a darker side of the country's diamond trade that has of late started to lose much of its shine. Some of the country's diamond traders, who refuse to acknowledge Puri's link with any sort of illegitimate dealings, say that international business rivalries could have brought Puri his ultimate end. "Indian diamond traders have displaced Jews [as] the diamond crown of the world," said a source from one of the industry lobbies, Surat Diamond Manufacturers' Association. "And this [killing] could be a result of a vendetta."

Indeed, Indian diamond traders are progressively displacing the Jewish community that dominated this trade in Belgium's diamond city - Antwerp - and are now calling for better representation on Antwerp's High Diamond Council, the powerful regulatory body in the trade. This, Indian traders say, has raised the ire of some of the other global diamond trading communities.

In fact, in a provocative report, the Wall Street Journal said recently that, "Indians are among the world's most successful newcomers. They have reinvigorated the jewelry districts in New York and Hong Kong and revived the US motel industry; they are among the programmers of choice in Silicon Valley and Berlin. In the global diamond world, Indians have been so successful that they are challenging Jewish dealers, even in Tel Aviv. About 80 percent of all polished diamonds sold worldwide pass through Indian hands."

There are other problems too. A section of the country's diamond trade is emerging to be a conduit for slush money laundering. Recently, India's Directorate of Revenue Intelligence, the income-tax department, and the Research and Analysis Wing started investigations over allegations of the over-invoicing of diamonds, suspected to be masterminded by a Dubai-based syndicate, for laundering nearly $20 million abroad. Allegedly, unscrupulous Indian traders exported rough diamonds to Dubai and Hong Kong and re-directed these to India at inflated prices. Revenue Intelligence said that they had arrested representatives from three diamond-importing firms operating from Mumbai - a hub for diamond trading - that were indulging in over-invoicing.

But Indian diamond processors blame the industry's current ailments on a number of causes. The country's once-thriving industry, they say, is now a victim of delayed payments, falling export orders and rising rough diamond prices, all of which are forcing some to adopt newer methods to stay afloat.

The slain Puri, for example, is said to have adopted a practice of selling polished diamonds at a huge discount in order to aggressively gain market shares. Said one industry source: "Times are a-changing with globalization, and the industry may soon no longer have the strength of a monopoly to carry on their former arrogance."
EXCERPT ENDS
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