Diamonds fuel prosperity

The diamond industry went through a rough patch a few years ago when sales dipped because of weak demand and the Asian crisis. It’s now celebrating a 44% increase in sales of rough gems, while, at the same time, keeping an uneasy eye on a dark cloud that threatens to cast a shadow over future sales.

The industry plans to meet in Antwerp next month to discuss (among other things) what can be done to push that dark cloud aside before it rains on an industry that employs several million people worldwide and is the largest contributor to the economies of several developing nations.

The cloud, of course, refers to “conflict diamonds” — diamonds obtained from regions torn by war and civil strife — and to campaigns linking the diamond industry to atrocities and political unrest in countries such as Sierra Leone, Angola and the Democratic Republic of the Congo (DRC).

Diamond-industry publications are reporting that leading jewelry retailers have already received packages of fake jewelry with the number of deaths in these African countries on the price tag. A human-rights group prepared a campaign featuring a young girl from Sierra Leone whose arms had been hacked off by rebel hooligans controlling that country’s diamond fields, the message being that diamonds are not this girl’s best friend.

The controversy has spread to the United States, where Congress is looking at ways to stop the flow of “blood diamonds” from rebel groups who have used them to buy arms and fuel conflicts. Other Western governments are examining similar measures.

The diamond industry has its own initiatives under way, including a vigorous, multi-front campaign by De Beers to ensure that only conflict-free diamonds reach consumers (see story on page 5).

The industry is also trying to educate human rights groups that have been targeting the “US$42-billion diamond trade,” rather than the small percentage of diamonds that come from disputed territories. It is a point that needs to be driven home, given that millions of jobs and the economies of several developing nations could be adversely affected if there is a consumer backlash against diamonds.

The US$42-million diamond trade reflects the value added to rough production (valued at US$7-8 billion) and the labour and efforts of millions of people worldwide engaged in the cutting, polishing and marketing of diamonds. In contrast, illegal production of diamonds from rebel-held regions is estimated at US$255 million or less, representing about 4% of the market. Some sources say this has fallen by more than half in the past year, owing to efforts by the diamond trade to avoid dealing in conflict diamonds.

The industry welcomes any efforts to end the violence and anarchy that have gripped places such as Angola for more than three decades. An estimated 500,000 people died (and many thousands more were maimed) between 1992 and 1997 alone, while the rebel force UNITA earned billions in illegal diamond sales during its reign of terror. Similar atrocities have occurred in Sierra Leone, Liberia and, more recently, the DRC.

In contrast, the people and economies of Botswana, Namibia and South Africa have prospered — because of diamonds. For every conflict diamond, there are many thousands of prosperity diamonds.

We support the industry’s efforts to ban the purchase of diamonds from rebel-held territories. However, the United Nations has a role to play too, and so far, at least, it has been reluctant to point a finger at corrupt governments exacerbating the problem.

In Angola, for example, it is no secret that rebel-produced diamonds are leaving Angola supported by government certificates. Nor is it a secret that some of UNITA’s arms are provided by corrupt officials of the Angolan government and army. De Beers has responded by placing an embargo on the purchase of all diamonds from the country, a move applauded by several diamond industry publications.

De Beers stopped buying diamonds from Liberia and Sierra Leone 15 years ago, though this hasn’t stopped the booming guns-for-diamond business that has attracted unsavory characters from such far-flung locales as the Ukraine, Bulgaria and the Middle East.

Governments and human-rights activists should now turn their attention to the gun-runners and arms dealers who view Africa as a dumping ground for military surplus. After all, it’s a lot easier to trace arms shipments going into conflict areas than a small parcel of diamonds going out.