Developing the gem industry

Sri Lanka is renowned the world over for exquisite gems and gem-based jewellery. Being one of the few countries where almost every precious stone is found in a natural state, there is a good demand worldwide for these products.

In fact, the Government is set to achieve a target of Rs. 40 billion from gem and jewellery exports this year against the Rs. 30 billion made last year. As we reported in these pages yesterday, this target looks increasingly viable because gem exports have shown a significant 20 per cent growth in the first quarter of this year alone.

In this context, the recently inaugurated Mini Piyasa in the gem city of Ratnapura will be a fillip to the industry. It is a forum organised by the National Gem and Jewellery Authority (NGJA) with the assistance of related Government bodies to provide speedy solutions for the problems in the gem and jewellery sector.

A concept of Minister of Enterprise Development and Investment Promotion Rohitha Bogollagama, the authorities hope to conduct the forum once in two months for the benefit of the industry. It is reported that the forum has already brought about solutions for a number of issues of gem miners, lapidarists and traders in the Ratnapura district.

One of the main problems seems to be the intrusion of middlemen to the industry. These middlemen deprive the gem miners and traders of a fair share of profits. The middleman gets unreasonable benefits from gem dealings due to the lack of facilities for gem traders.

The lack of proper storage facilities and security means that many miners and traders are willing to sell their products at lower prices to foreign buyers without proper valuation and value addition. As envisaged by the Minister, we hope the newly created SME Bank would formulate a programme to assist small-time gem miners and traders to overcome these problems. Being a high-stakes industry, corruption has also crept in. Irregularities have been reported in issuing permits for gem mining, trading and lapidary. These should be nipped in the bud.

The Government's support is vital for this industry to thrive. Its decision last year to remove the 15 per cent Value Added Tax (VAT) on the imports and trading of rough, cut and polished gemstones, diamonds and precious metals was a step in the right direction as was the establishment of the Gem and Jewellery Authority sometime back.

It is also essential for the industry to turn challenges and threats into opportunities. Madagascar, the latest hot spot on the world gem map, initially appeared to be a threat. Our enterprising gem traders have however turned the tide in their favour by setting up operations there and directing foreign exchange to our shores.

Both Governments have also helped their cause by establishing diplomatic missions in the respective capital cities.

The need has arisen for a comprehensive national policy for the gem and jewellery sector, which collectively employs more than 300,000 people, from mine workers to polishers to craftsmen. Unlike other vocations, they are not organised under a single union or organisation and their voice is not heard well enough.

The authorities, in consultation with industry players, should also formulate standards on worker safety, quality of products, use of advanced technology and employees wages. Such a two-way approach will benefit everyone in the industry.