Rapaport Magazine


December 2007

By By Mordy Rapaport
RAPAPORT... The Kimberley Process (KP) is an inspiring example of industry, government and nongovernmental organizations (NGOs) joining hands to overcome a problem that seemed unsolvable. Designed to eliminate the smuggling of rough diamonds across borders and ensure our product remains conflict free, the Kimberley Process can rightly be considered a success in eradicating the specific problem of conflict diamonds. But there are many serious economic and social development issues beyond conflict diamonds that must be addressed by the diamond community.

Discussions, committees, conferences and papers are frequent and widespread among individuals and organizations looking to alleviate poverty in the stricken countrysides of various African nations. While many of these efforts are admirable, one must not ignore the first and foremost rule of development: The road to hell is paved with good intentions. Vast amounts of capital in the form of donations and aid have been allocated to African nations with no substantial improvement to show for the effort. The question of why the basic necessities of a community are lacking in a country such as Sierra Leone, which has produced more than $510 million of rough diamonds over the past five years, remains puzzling to me and is a fact that cannot be ignored.
In a speech at the Antwerp Diamond Conference, which took place in October, Joseph Stiglitz, economist and Nobel Prize winner, addressed the issue of Africa, making reference to the concept of sustainable economic activity. Sustainable economic activity negates the phenomenon of aid and charity in the development context. This concept is based on the idea of providing an individual with a fishing rod as opposed to daily portions of fish.

One initiative currently being pursued in line with the concept of sustainable economic activity is fair trade. Fair trade categorization and labeling currently exists for a variety of consumer products and is most widely identified with coffee. Generally, it enables a product to achieve a higher price in the market based on adherence to strict, specified standards. Those standards are the core principles of the fair trade product we at Rapaport are trying to develop, specifically, that in the production of diamonds, fair wages are paid, no child labor is being used, a percentage of earnings is provided to the community and the mining taking place is ecologically sound.

While the Fairtrade Labelling Organizations International (FLO) is the ruling authority on products classified as fair trade, efforts are being made by various individuals and organizations to create legitimate fair trade diamonds and jewelry. Fair trade diamonds and jewelry is a powerful concept that can elevate diamonds to an unprecedented level. As many in the diamond trade begin to allocate higher levels of capital toward marketing, so as to compete in the broader luxury market category, the symbolic qualities of our product are being relentlessly promoted in the global arena. Since diamonds have no real utility, the idea behind the diamond and not the diamond itself is our selling point. Creating a product that makes the world a better place is the goal of fair trade diamonds and jewelry. It will also create a product category with unequivocal demand.

So while the issues of development are extremely complex, initiatives such as fair trade may very well change the current environment and provide the tools needed to overcome some of the obstacles currently standing in the way of development efforts. We must all understand that Africa is not some remote continent, which only mildly affects our ongoing business. As the competition for natural resources intensifies, Africa is sure to play an even more important role in the years to come. Creating sustainable economic development and alternative employment in the area is direly needed. Having visited Sierra Leone on multiple occasions, I have seen personally the lack of alternative employment outside of diamonds. Sierra Leone and Africa are not in need of more artisanal diggers, but rather alternative sources of income in a self-sustaining economy. “Trade, not aid” should be our objective.

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