The single biggest problem for the global diamond industry is its lack of collective leadership in tackling the big issues that it confronts globally. Examples of this include the two most pressing challenges the industry is currently facing i.e. the lack of generic promotions to enhance and maintain the ‘equity’ of diamonds, and the issue of undisclosed synthetics being surreptitiously mixed with parcels of natural goods, particularly in very small sizes.
Both these problems hold the potential to actually derail the industry. In order to find a solution, both require collective action on a global scale. Both need global leadership to direct the requisite action. In the absence of this leadership, the combination of these two is gnawing away at the industry’s vitals. The need for collective leadership is paramount.
History has demonstrated the efficacy of the global diamond industry on the occasions that it has banded together. We can take immense pride in the way it came together to tackle the issue of blood diamonds and help set up the Kimberley process. This was something that happened across geographies and cultures, and it was a collective effort championed by industry stakeholders positioned at different parts of the production pipeline. While the Kimberley Process may not have been able to completely eliminate blood diamonds, the whole world witnessed an industry come together to launch a really sincere and credible effort. That recognition alone spurred consumer belief and confidence in the face of an issue that presented an absolute threat to the industry.
On a smaller scale, I have seen how the Indian diamond industry has also banded together on occasion, in an attempt to address a variety of smaller and less significant issues. Regardless of the varying degrees of gravity in the issues we have been confronted with, a range of stakeholders have seen the power of the collective, and put their differences aside in order to resolve the problems at hand.
Today, the lack of generic promotion, and the threat of undisclosed synthetics getting into the mainstream market are issues parallel to the magnitude of blood diamonds; however, at the moment there is a complete lack of collective leadership in tackling both these issues. Unfortunately, unlike the proactive action taken to tackle the issue of blood diamonds to nip it in the bud before it could really damage the industry, I believe on the current two issues, the industry has fallen behind the curve.
I’m very heartened by the formation of the Diamond Producers Association. The mining companies, who are at the very beginning of the diamond production pipeline, are the ones who are best placed to form the collective leadership on a global scale. As you go downstream from them through the pipeline, it gets more scattered and fragmented and the possibility of putting together any sort of cohesive structure with the capability of assessing and analysing issues and formulating solutions becomes increasingly remote.
Let me be absolutely clear, nobody can, or should, expect the mining companies to carry the financial burden of this collectively leadership themselves. That said, by being at the very beginning of the pipeline, they are uniquely positioned to develop this leadership. If a small ‘cess’ on all rough sales by all the mining companies is instituted worldwide, they would level the playing-field. The miners too should contribute an equal percentage towards the cess. Both contributions together, will form a truly formidable financial war chest to tackle these global issues. Even the seemingly tiny fraction of $16 billion is serious money!
Once that collective leadership is set up at the very start of the pipeline, a global structure that reaches across the various segments of the pipeline could be next. It is in everyone’s benefit to pitch in and help. Logically speaking, it seems only natural that once it becomes clear that the global industry as a whole has financed this effort, there will be no potential for complaint from any particular segment of the pipeline.
We need a huge promotional effort across the globe to boost the perceived emotional value of diamonds in all the major consuming markets. Just cutting prices and even severely restricting supply — both of which are essential right now — won’t help nurse the industry back to health in the long term. To my mind, diamond consumption is not price elastic and hence cheaper prices will not push sales. We need to focus our efforts on creating demand and consequently ‘pull.’ With collective leadership that is funded by the global industry, we’ll be able to fully harness our potential in creating an effective and game-changing promotional effort. We’ll be able to raise the value of our product. We’ll not only be able break clear of the downward value spiral we’ve gone into, but actually correct that and tilt the graph upward.
Undisclosed synthetics in very small sizes, the other big issue, is a truly frightening problem. There are plenty of organisations trying to tackle it on their own. I am sure, they all will bring their detection technology and machines to the market but it will take its own time and costs. At the moment, I feel that the detection technology is not keeping pace with the problem, which is way beyond the capability of any single laboratory or industry body..We need the kind of technology that will guarantee the detection of synthetics as small a 1 point and below in an efficient and most economical way RIGHT NOW. The urgency of this issue cannot be stressed enough.
As a global industry, with a global budget and collective leadership, we have to have all the laboratories and organisations in the world collaborate on this, as the threat is real and immediate. We can and should throw enough collective resources at the problem to come up with a truly effective technological solution as soon as possible before any real damage occurs, and customer confidence is lost, and integrity is compromised.
The thing is, both these issues need to be addressed urgently. We need global collective leadership and initiatives to tackle both these issues right now. Time is ticking away, but what remains to be seen is whether anyone steps up to the plate.