Glitter Tights

Diamond Company: Glitters Israel with diamonds

Israel Glitters with Diamonds

The Israeli Diamond industry has designated India as a strategic goal for 2008. Diamonds account for about 70 percent of bilateral trade between Israel and India and the volume has grown rapidly in recent years.

The Israel Diamond Exchange is the official name of the organization in Tel Aviv who organizes, directs and manages the industry for the benefit of its members. The building occupies an important place in the area of Ramat Gan in the city, and seems disproportionate in the tourist maps of the city.

But I had trouble explaining to my destination my taxi driver. After trying to say the name with different accents, I took the card and it has done for him. "Ah, Borsa," he exclaimed. Everyone knows the Borsa, or Exchange, where diamonds are traded.

Interesting anomaly.

But diamonds in Israel is in itself an interesting anomaly. Early economic theories have emphasized the need for natural resources on which to base a country's economic development until countries such as Singapore has shown that you had a vision, and work hard to make development occur. Israel is like that. No diamond mines and without a major market to consume the product, Israel is still a major player in the global diamond industry.

Israel is said to account for around half of rough and polished diamonds sold worldwide, and has built this position based on its creativity and technological expertise in polishing and designing equipment that is used in industry.

The Diamond Exchange is a comprehensive center, a complex of four interconnected buildings with what would be the world's largest commercial ground floor, offices for merchants, banks, post office, restaurants, synagogues, and daycare for children. You do not need to leave the place! Such a center, everywhere, must have high security, and Israel, which is not at peace with its neighbors and faced violent attacks, the need for security is being conducted well sewn. I had to provide my passport details a day in advance to be allowed to enter the building.

Security also seems appropriate for a company that, at higher levels, was shrouded in secrecy, and is an industry that seems to depart from all the accepted theories of business and management. The official face of DeBeers, the private company that controls the industry, is innocently called the Central Selling Organisation (CSO), not wanting to attract attention. Hmm. An organization that does not advertise!

Designed by CSOs

The diamond industry is carefully managed by the CSO, which has about 50 per cent share on the world market. Like central planners of the former Soviet Union, it sets the prices at which it sells its rough diamonds to "sight holders" who are its customers approved. You take it or decline, there is no negotiation. Even Russia, now a producer of diamonds, De Beers prefers to take the initiative to leave the pricing for the company has mastered the art of managing demand and supply to keep prices high. Curiously, in the case of luxury goods such as diamonds, no one is interested in the prices fall! It is obvious that the supplier wants high prices, but the fact of the buyer, because it represents the status and luxury.

This same spirit of discretion and security pervades other aspects of the operations of the exchange of diamonds. In any other stock, you will see ads for opening and closing prices and volume of transactions in one day. Not here. The Exchange does not keep the volume of business done on the floor. You will not see flashing signs indicating the price goes.

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