Sri Lanka’s gem industry potential largely untapped

4 September 2015 05:01 am - 0 - {{hitsCtrl.values.hits}}

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From left: Sri Lanka Gem and Jewellery Association Chairman A.P. Jayarajah, Parliamentarian and Former Deputy Minister Eran Wickramaratne and Parliamentarian and Former Minister Kabir Hashim inspecting a gem studded dagger and sheath

Parliamentarian Dr. Harsha de Silva holding a Ceylon Sapphire
Pix by Kithsiri de Mel

By Chandeepa Wettasinghe
The government called on the country’s gem industry to present a long-term policy paper which could be used to create a national policy to tackle current and future problems the industry faces.
“I don’t know much about this trade than what I have read. It is for the industry to come up to the new government and present a paper that you can defend,” ruling party parliamentarian and former deputy minister Dr. Harsha de Silva said at the launch of Facets 2016.

He added that the recommendations must have the broad interests of Sri Lanka in mind, and the government.
“It needs to be an argument with reasons. We need to have policies that can be rigorously defended, so that we can ensure it works Sri Lanka,” he added. He further said that policies of the former regime in the form of taxes, duties, bureaucracy and red tape would be revisited.
Parliamentarian and Former Minister Kabir Hashim who was a former Facets member noted that Sri Lanka requires major improvements in the gem industry.
“At this point of time I think that the gem and jewellery industry has not been properly exploited in Sri Lanka. It has actually been exploited by many other forces other than the Sri Lankans themselves,” he said.

Hashim said that many local valuable gems were lost in the 1970s and 1980s when the international industry blossomed due to the lack of technology, commitment expertise or will locally to improve the industry.
“Most of our stones went abroad unprocessed in gunney bags in tonnes and tonnes. We lost billions and billions of dollars. Many other countries’ infrastructure are built on our stones,” he said. Dr. de Silva said that around 80-90 percent of the country’s land area has potential to contain gems, which should be obtained using sustainable and environmentally-friendly technology, while deciding whether the local industry should be protected.
“As we know each small gem is worth millions. So imagine the potential we have. So why hasn’t this industry taken off?” he questioned, and said the answer must be value addition. He said that the gem cutting businesses are underperforming, and the industry requires a long-term plan to add value and bring in foreign exchange.

According to Dr. de Silva, one path would be to convert the country into a hub where foreign gems too could be brought in, value added and exported. Sri Lanka in the past catered to such hubs.
“The decision must be made. Are we going into a hub concept? Or are we going to unearth the gems we have, add value, and export them only?” he questioned.

Parliamentarian and former Deputy Minister Eran Wickramaratne said that the government would provide the fullest support and provide incentives for the industry if the risks are too high.
“Our past was built on borrowed currency. Our future lies in export markets. We need new products, new markets and new companies. Sri Lanka’s future naturally lies there. As the government we will do everything possible in the next 5 years where intervention is necessary,” he said.

While the industry had an export target of US$ 1 billion by 2015, diamonds, gems and jewellery export values fell from US$558.90 million in 2012 to US$437.50 in 2013 and US$381 million in 2014. With setbacks in selling bulk uncut gems to the Chinese market, the industry is adapting the same strategy in India, which disappointed Dr. de Silva.
He added that with the depreciation of world currencies to stay competitive comparative to China, the gem industry would have to overhaul its export plans.

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Sri Lanka’s gem industry potential largely untapped

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