The Gems Bo­nanza

The abun­dance of gem­stones could make them prime driv­ers of economic growth in Afghanistan.

Southasia - - CONTENTS - By Zu­fah An­sari The writer is a mar­ket­ing stu­dent with a strong in­ter­est in cul­ture and so­ci­ety.

De­spite years of war and ge­o­graph­i­cal con­straints, there are a few things that re­main unique to Afghanistan. One such strength of the coun­try is the pre­cious and semi-pre­cious gem­stones de­posits that are found there in abun­dance. In fact, Afghanistan has been syn­ony­mous with be­ing the hub of valu­able gems. Nuris­tan, Pan­jshir Val­ley, Jeg­dalek and Badakhshan are the four ma­jor re­gions which are rich in such pre­cious stones as lapis lazuli, emer­ald, ruby and kun­zite.

The abun­dance of gem­stones re­serves and their many va­ri­eties make them one of the prime driv­ers of economic growth in Afghanistan. The gem­stone in­dus­try of the coun­try is es­ti­mated to have the com­mer­cial po­ten­tial of up to $200 mil­lion ac­cord­ing to statis­tics re­leased by the Min­istry of Com­merce and In­dus­try.

Gem­stone min­ing in Afghanistan is much more than just an act of la­bor. It is a spe­cial­ized line of work that is per­formed by qual­i­fied crafts­men. The crafts­men add an edge to the process of ex­ca­va­tion with their unique skills. They usu­ally be­long to the vil­lages

sur­round­ing the mines and are familiar with the to­pog­ra­phy of the area.

How­ever, de­spite having great economic po­ten­tial, the min­ing in­dus­try is in a sham­bles. One of the rea­sons for its down­fall is the way ex­trac­tion is done. The process in­volves tun­nel ex­ca­va­tion us­ing hand drills and high ex­plo­sives, which leads to the de­struc­tion of 70 per­cent of the gem­stone de­posits. This re­sults in wastage and causes dam­age to gems which, in turn, lose much of their value.

An­other ma­jor hur­dle in the growth of the gem­stone in­dus­try is the ab­sence of trade chan­nels. The World Bank es­ti­mates that gem­stones that sur­vive un­pro­fes­sional min­ing tech­niques are ex­ported through grey chan­nels, with 90-95 per­cent of the extracts trans­ported to Pe­shawar in Pak­istan for qual­ity checks. This de­prives the Afghan gov­ern­ment of roy­alty gains.

The sit­u­a­tion turns bleaker be­cause of the lack of skilled gemol­o­gists and gem­stone traders in Afghanistan who can spot real stones and dif­fer­en­ti­ate them from fake or syn­thetic ones.

A thor­ough in­spec­tion of gem­stones is required to de­ter­mine their qual­ity and de­tect im­pu­ri­ties, such as for­eign ob­jects, cloudi­ness and tiny frac­tures caused by heat that is part of the nat­u­ral process of gem cre­ation. The abil­ity to carry out this ex­am­i­na­tion is es­sen­tial to as­cer­tain the qual­ity and au­then­tic­ity of a gem.

In the ab­sence of the required ex­per­tise, Afghanistan’s do­mes­tic gems mar­ket has seen a surge in the num­ber of fake stones. This phe­nom­e­non has brought down the value of the au­then­tic and graded pre­cious stones.

Un­for­tu­nately, the gov­ern­ment of Afghanistan has not yet in­vested in ac­quir­ing the lat­est tech­nol­ogy to prop­erly ex­ca­vate the stones and to im­prove the meth­ods of mak­ing jew­elry from lo­cally ex­ca­vated pre­cious stones.

Traders be­lieve that some do­mes­tic sell­ers pass off syn­thetic gems as Afghan gems to for­eign­ers, con­vinc­ing them that buy­ing the jew­elry is a great bar­gain. As a re­sult of such dis­hon­est prac­tices, the num­ber of re­peat as well as new cus­tomers is go­ing down. Over the past few years, the num­ber of for­eign buy­ers of gem­stones has de­creased con­sid­er­ably.

The ma­jor­ity of vic­tims who fall prey to the con­ning are Amer­i­can sol­diers de­ployed in Afghanistan. Many sol­diers serv­ing in the coun­try have been duped into buy­ing ‘black di­a­monds’ and ‘ blue sap­phires’, for which they read­ily paid large sums think­ing that they would make a for­tune out of sell­ing them back home. While some spend a few dol­lars buy­ing a carat or two, oth­ers spend thou­sands of dol­lars only to find later that the stones were fake.

The in­abil­ity of the gov­ern­ment to pro­vide proper pro­cess­ing and de­sign­ing fa­cil­i­ties within the coun­try has also con­trib­uted to wors­en­ing the sit­u­a­tion. Such fa­cil­i­ties are es­sen­tial to elim­i­nate the need for send­ing gems to other coun­tries for the pur­pose of clean­ing and cut­ting.

There is much more to the prob­lems caused by the fake gems in­dus­try and the dam­age it has done to the Afghan gems mar­ket. Many Afghan gem traders be­lieve that since jew­elry from In­dia, Thai­land and Iran is sil­ver coated in most cases and is made from or­di­nary ma­te­rial, it is cheaper in price and thus gives tough com­pe­ti­tion to Afghan gems at in­ter­na­tional ex­hi­bi­tions.

But gems ex­perts also be­lieve that the stan­dard of mar­ket­ing for orig­i­nal gems from Afghanistan is not up to the mark and there­fore there is hardly any ex­po­sure of the qual­ity prod­ucts com­ing out of Afghanistan.

More­over, the ab­sence of proper ex­port chan­nels for pre­cious stones has kept many in­ter­ested in­ter­na­tional buy­ers from ne­go­ti­at­ing trade agree­ments with the Afghan gov­ern­ment.

Over the years the Afghan gov­ern­ment has taken some mea­sures to ad­dress the con­cerns of gem traders with re­gard to the gem­stones mar­ket. Ge­mol­ogy cour­ses have been in­tro­duced and are be­ing taught to par­tic­i­pants from Kabul, Pan­jsher, Nuris­tan, Kun­duz, and Bamyan prov­inces. Th­ese cour­ses help the gem traders in dif­fer­en­ti­at­ing the real pre­cious stones from the syn­thetic ones.

The struc­tural ap­proach to pro­mote the gem­stone mar­ket will al­low traders and sell­ers to build a trust­based re­la­tion­ship with their clients, which will ul­ti­mately trans­late into more prof­its as well as re­gain­ing the up­per hand in gem­stones mar­ket at the in­ter­na­tional level.

Other no­table ini­tia­tives in­clude a min­ing law to en­sure a more reg­u­lated stream of ex­plo­ration and min­ing and en­cour­age le­gal­iza­tion of the gem trade. This is re­garded as a mea­sure that would en­cour­age more in­vest­ment in the sec­tor, lead­ing to bet­ter work prac­tices and im­proved meth­ods of ex­ca­va­tion and gem pro­cess­ing. Ad­di­tion­ally, the gov­ern­ment is seek­ing help to in­tro­duce tar­geted mar­ket­ing in or­der to dif­fer­en­ti­ate Afghan gems from other kinds of gems.

With th­ese new de­vel­op­ments lined up, es­pe­cially with the in­sti­tu­tion­al­iza­tion of value-added cut­ting and pol­ish­ing cen­ters in Kabul, Afghanistan is ex­pected to be on the road to of­fer an in­ter­na­tion­ally ac­claimed gem­stone in­dus­try once again.

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