Reasons for not sleeping II

Economy

"The Great Recession” : Diamonds' Hard New Enemy

by Kristine Renée M.

We've all been struggling through the hard times the economic turndown of 2007-2010 has brought upon us; from unpayable debts to the sizeable credits we still owe – for others, it's hell – and for the diamond gem industry? They're just as agonized ... or perhaps even more.

Diamonds – valuable, priceless. Ever since, these jewels have been given a “special treatment” for more than just a few decades; from the use as religious items in ancient India, to a source of funding for Third World countries, and even to gemstones which were used to support bloodshed – yet now, the diamond gem industry has to encounter its brand new enemy – the financial crisis, or, as others may call it: “The Great Recession”.

Several countries in the world partake in the quest of finding and mining diamonds. Once found, these then are sorted, cut and polished in several different parts of the globe, the gemstones going in some sort of voyage until they finally reach their last destination – the consumer's hands.

For several years, this consumerist society has had an unquenchable thirst for things which fulfill our materialistic needs – and for many, diamonds were the perfect thing. Now, however, the whole flourishing world that was the diamond industry has turned upside down: the $65 billion global diamond industry is one the verge of crashing.

Since August 2008, the diamond industry has had alarming losses in income. In that month alone, prices of diamonds had already fallen by a third, darkening the future outlook of the economies of diamond producing nations.

The output of diamond giant De Beer's sank 91% in a few months after the recession striked, automatically meaning the dismissal of more than thousand workers; particularly in India, where almost three-quarters of the world's diamonds are cut and polished.

The diamond industry won much relevance in India the past several years: the unemployment rate sank, the economy rose, and the life quality of plentiful of families were kept out of destitution.

Now that the demand for luxurious items has mitigated, more than thousands of diamond workers in India and other diamond providing countries were laid off (Surat alone: more than 200,000), leading to a devastating condition of unemployment and no silver linings.

This leads to unceasing suicides, as laid-off workers are still in dire need of income to be capable of coping with the high cost of living and to be able to pay rents, mortgages and debts.

However, not only the diamond workers are affected: many diamond shops in Surat's known diamond market and as well as the cutting and polishing rough diamond factories have closed. Professionals predict that the diamond revenue in Surat will be falling for a quarter this coming year.

In Botswana, the situation doesn't look any better. What used to be a fast growing economy, is now an economy holding on tightly at the riff. After 20 years of guaranteed free education, the government has decided to reinstate school fees due to the falling revenues. Over 170,000 children aged 13 - 18 will be affected by the measure.

The reinstated school fees are high: pupils at community Secondary Schools will pay 194 pula ($36) a year, while seniors at a secondary school 452 pula ($84).

According to many teaching unions and parents, this action will result to less children going to school – instead, most will be obliged to work to be able to supply for their future.

However, a few exemptions have been done for the poorest.

P.S: I think I have to add sth. to it... the ending seems so abrupt... and I do not take any credit for any of the pictures!