The coronavirus pandemic has wreaked havoc on the health, social fabric and economies of the world. The disastrous effects of the virus on our health and welfare are matched by its destruction of our livelihoods and economic security. It seems that all branches of the economy are affected; for some the crisis may be a direct hit from which they may never recover.
Governments the world over are struggling with these issues – how to keep their populations safe from the virus while allowing the economies to return to some semblance of normality. How much direct aid to provide to citizens and to businesses? What will huge budget deficits mean for the world economy going forward?
The world diamond industry has been particularly hard hit by the pandemic. With its main markets spread from Asia to North America, the diamond industry’s shut down followed the path of virus. First China, Hong Kong, Singapore and other markets were in lockdown, then Europe and the Middle East, and finally the United States. Our markets closed one after the other, we ourselves were forced to stay at home and our businesses and our livelihoods suffered. The diamond industry was among the first to be battered by the crisis and will likely be among the last sectors to recover.
The current crisis follows on top of the huge systemic problems that have impacted the industry for the past decade – very low profitability, a large price gap between polished and rough, and a major credit deficiency.
The crisis has made these difficulties even worse. The major diamond centers have seen trade come to an almost complete 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 jewelry sectors account for billions of dollars in revenue worldwide and employ hundreds of millions of people. When our industry rumbles, it can create an avalanche for millions on five continents.
Now is the time for governments around the world to step up to provide real assistance to the diamond industry. What can governments do to have an immediate impact?
- Offer substantial government guarantees to back loans to the diamond industry
- Define the diamond industry as a preferred industry, not as an industry at risk
- Provide grants to companies and individuals in financial distress
- Institute marketing support programs
- Where applicable, reduce taxes on imports of rough and polished diamonds
- Streamline international trade procedures that affect the diamond trade
I’m sure you can come up with additional suggestions. Certainly 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.