Israel Hopes To Reclaim Share of Diamond Trade

Could Haredim Prove Answer to Low-Cost Producers?

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By Reuters

Published January 02, 2013.
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Diamond manufacturing is a dwindling trade in Israel. The country has one of the world’s hottest diamond exchanges, but polishers and cutters of the precious stones have been replaced by cheaper workers in newer hubs like India and China.

Israel wants to bring them back. To do so, it plans on recruiting a legion of ultra-Orthodox Jews, who because of their dedication to prayer and study, have been unable or unwilling to join the work force, putting a heavy weight on the economy.

The job of a diamond polisher, however, is unique, said Bumi Traub, president of the Israel Diamond Manufacturers Association. It need not disrupt their pious lifestyle.

“The profession is fitting. You deal with the rock, and if you need to go pray, no one will bother you,” he said.

The door to Traub’s office requires a fingerprint scan. Security is tight in the four-building exchange where annual turnover of trading reaches $25 billion each year.

About a third of rough diamonds produced in the world each year pass through the Jewish state and diamonds account for more than a fifth of the country’s industrial exports.

It was a natural sector to develop when Israel was founded 64 years ago, since the small stones have been choice merchandise for generations of Jews who had to quickly flee from riots and persecution.

The plan to revitalise manufacturing will cost millions of dollars and the diamond sector, for the first time, is turning to the government for help. The government, eager to get as many ultra-Orthodox working as possible, is on board.

INDUSTRY TROUBLES

The global financial crisis has taken a toll on the diamond trade, and Israel was not spared. Turnover was nearly halved at the outset in 2009, though in 2011 it returned to pre-crisis levels. A smaller drop is again expected for 2012.

The damage has been moderate compared to other major hubs such as India, according to Yair Sahar, president of the Israel Diamond Exchange.


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