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‘Gem trade needs to be further liberalised’

Public Enterprise Development Minister Kabir Hashim yesterday called for greater liberalisation of the gem trade for the future growth of the industry.

Hashim addressing the opening of the FACETS International Gem and Jewellery Exhibition at BMICH pointed that the Sri Lankan gem industry which ranked in US$ 500 million in revenue each year could do much better.

Hong Kong with no gem mining earns US$ 25 billion in revenue per year while Thailand which sources most of its gems from Sri Lanka earns US$ 11 billion, he said.

The gem industry which was initially liberalised by former UNP Minister Ronnie de Mel in 1979, was later further liberalised in 2001 by the Prime Minister at the time Ranil Wickremesinghe, according to Hashim.

While 75 of the 200 classified precious stones in the world are found in Sri Lanka, gem trading has been mostly a family run business functioning on ‘mutual trust` between various known parties.

The minister however stressed that the government needed to play a more active role in supporting the industry which has over 500,000 people working in it.

He asked that it be liberalised further and the business of importing rough stones for processing and thereafter re-export be supported through tax exemptions.’We also have a major issue with the National Gem and Jewelry Authority.

It needs to have less control over the business and have less bureaucratic red tape.

The Authority needs to be revamped; it needs a different look and regulatory mechanism to allow gem merchants to do their job more freely`, said the minister, a onetime gem merchant himself.

The Minister also asked that gem mining activities be less restricted, ‘without mining you cannot find stones.We need to do mining taking into account environmental impact but mining has to be allowed`, he said.

He also proposed that funding mechanisms be provided to gem merchants and that more effort is taken to brand and market Ceylon Sapphires to the world.

Hashim believed that if that is done, most of the infrastructure in the country, similar to Thailand could be funded by revenue earned through precious stones. A special gem and jewellery zone was also proposed to bring all services to one area to make trading and export easier.