The global diamond industry has been particularly hard hit by the coronavirus pandemic, which has wreaked havoc on the health, social fabric and economies of the world, laments World Federation of Diamond Bourses (WFDB) acting president Yoram Dvash.
With its main markets spread from Asia to North America, he says the diamond industry’s shutdown followed the path of the virus – first China, then Hong Kong, Singapore and other markets were in lockdown, with Europe, the Middle East and the US soon following suit.
With markets closing one after another, and stay-at-home orders implemented, the diamond industry was among the first to be “battered” by the crisis and will “likely be one of the last sectors to recover”.
The current crisis follows on top of the huge systemic problems that have impacted on the industry for the past decade, resulting in low profitability, a large price gap between polished and rough diamonds and a significant credit deficiency, he points out.
The crisis has made these difficulties even worse, Dvash laments, noting that the major diamond centers have seen trade come to a near standstill.
“This is the worst crisis that the global diamond industry has experienced in modern history and it is not clear how we will emerge.”
The diamond and diamond jewellery sectors account for billions of dollars in revenue worldwide and employ hundreds of millions of people, and when the industry rumbles, Dvash says it can “create an avalanche for millions on five continents”.
For this reason, he implores governments around the world to “step up” and provide real assistance to the diamond industry.
Among the things he suggests governments can do to have an immediate impact, is to offer substantial government guarantees to back loans to the diamond industry, as well as to define the diamond industry as a preferred industry, not as an industry at risk.
Dvash adds that governments can also provide grants to companies and individuals in financial distress, while instituting marketing support programmes and, where applicable, reduce taxes on imports of rough and polished diamonds.
Governments can also streamline international trade procedures that affect the diamond trade, he adds.
“The right package of government aid will differ from country to country, according to conditions in each location. What is important is that now is the time to act, to call on our elected officials to assist our magnificent industry in its hour of need, so that we may emerge even stronger than before,” he says.