|Discreet jewelry industry takes a stately bow at BIEL|
|Trade in gold, diamonds employs 15,000 in lebanon
Red tape and unstable government policies have complicated matters
One of Lebanon's oldest, largest, and perhaps most secretive industries is on full display this week, offering a few unconnected observers a rare glimpse into the shadowy world of precious commodity trade and all the lavish elements that seem to go with it.
While a pianist sent subtle notes through the cavernous BIEL - Beirut International Leisure and Exhibition center - dozens of scantily clad models (including past winners of the Miss Lebanon title) showcased sparkling necklaces worth up to $1 million. In celebration of the brand, a black Lamborghini was parked amid the sleek exhibitors, whose stands bore more resemblance to upscale shops than temporary stalls.
Retail sales are critical to the eighth annual Joaillerie Liban (Lebanese Jewelry) exhibition, where a handful of small to medium sized firms involved in the prestigious (albeit cut-throat) industry used the event to vie for their prime customers - cash laden Gulf nationals vacationing here for summer.
Local jewelers export at least $500 million worth of gold and diamonds per year, with many in the discreet business since the early 19th century and now widely represented on the international stage, either by direct outlets or through agents located across the globe. But throughout the years, their client based has largely remained the same.
"We are following our customers," said Carlos Chatila of Geneva-based Chatila, a firm that was founded in Beirut in 1860 but which now manufactures in Italy and Switzerland. With shops in London and New York, the company is back in Beirut for the first time in 20 years, in pursuit of wealthy Arabs that have increasingly retreated from their favorite American and European capitals since Sept. 11th, 2001.
With showrooms in Dubai and Saudi Arabia, locally based Chaar and Company does 90 percent of its business outside Lebanon, according to public relations manger, Issam Yafi. The Arab world, he explained, absorbs the bulk of sales, with "only" $1 million to $1.5 million of exports going to the US. That figure was the only sales indicator The Daily Star was able to obtain.
There are approximately 1,000 gold and diamond producers in Lebanon, employing up to 15,000 persons, according to Vasken Hadidian, president of the Syndicate of Lebanese Jewelers.
But he argues that the industry is declining, despite the double-digit growth reported by some firms. "We are losing our competitive edge," he said, alluding to the abundance of red tape and high overhead costs that have caused many local firms to move to Dubai.
To say the least, Lebanese authorities have not been entirely consistent in their handling of the largely unregulated industry that is rife with tales of smuggling, bribery and local ties to African-Lebanese steeped in the trade of so-called "blood diamonds."
"It's like politics," he muses. "Everybody tells you something; every government employee has his own regulations. One day you do something and it's ok, the next day you do the same thing and it becomes illegal."
The Lebanese government has yet to adopt the Kimberly Process, a certification system adopted by 43 countries and organizations that aims to ensure that imported diamonds have not been used to finance armed conflict or illicit activity.
"We have a lot of problems; everybody is selfish in this business," said Gabriel Salamoon, of W. Salamoon and Sons. However, nearly all vendors sharply denied any occurrence of smuggling or bribery in Lebanon.
"Customs authorities are very strict," said Chatila. "There is absolutely no smuggling."
Beirut,08 09 2004
The Daily Star