Discussions of Dubai’s thriving economic climate, and the role it can play for members of the International Colored Gemstone Association, dominated the first day of discussions at the 12th Biennial ICA Congress in Dubai on Monday.
Ahmed bin Sulayem, chief executive officer of the Dubai Multi Commodities Centre, set the stage for presentations that revealed insights into the culture and economic development in Dubai.
“Gold and jewelry have always been an essentially aspect of life in Dubai,” Sulayem said. “We’ve seen exponential growth in diamonds in recent years. And, today, we focus on colored stones. Regional tastes have witnessed a remarkable change as a result of greater global integration. Consumers are displaying an increasing inclination towards gemstones, as they continue to become an essential aspect of fashion and accessories, and that trend is true in the Middle East. The role of the ICA cannot be underlined enough in this context, as a leading authority on colored gemstones and [agent] of international cooperation among all levels of the gem trade.”
While the range of commodities under the DMCC umbrella is broad—encompassing everything from gold to energy to tea—the jewelry market makes up an important component of the UAE’s economy. Last year, the UAE accounted for more than $6 billion of the $146 billion global jewelry market, “almost a third of the regional total,” said Sheika Lubna al Qassimi, United Arab Emirates minister of Economy. “The gems sector is playing a larger role in this trade. In the first half of 2006, Dubai exported $664 million worth of precious and semi-precious stones, which adds up to over 28 percent of total exports.” The recent upsurge in oil incomes has given rise to enhanced consumer spending across the Gulf States, said Sulayem. The global market for these precious commodities is around $85 billion, with annual growth between five and 10 percent.
Last year, the UAE’s GDP grew by 23 percent, reaching $163 billion. Its economic growth rate was almost nine percent, well ahead of the global average. A recent report by AT Kearney suggests that the UAE’s GDP can increase by 60 percent by 2010 (11 percent on average), through continued economic diversification based on direct investment, internationalization, and development of new industries. The UAE government is currently reviewing its laws governing trade, export, and re-export to further ease the movement of commodities, and also considering the DMCC’s proposal to abolish the five percent duty levied on colored stones and gems in the GCC region, said Qasimi.
The strategic plan to grow Dubai as regional center is driven by principles of free market with light government touch, said Tawfic Farah, executive director diamonds and colored stones, DMCC. “Our job is to execute partnerships with the public and private sectors to diversify the economy away from the dependence on oil.” To that end, the DMCC has strong trade relations with Africa, a growing relationship with Russia, and a focused eye on emerging markets like India and China.
The future of world trade is in the Far East, emphasized Peter Meeus, special advisor diamonds for the DMCC, noting that there were 10 million engagements and weddings in China alone last year “The increase of the population in India and China in the next 10 years will equal the existing population in America and Europe.”
Amit Dhamani, managing director of Dhamani Jewels, said the diamond jewelry market in Dubai has grown 20 percent in the past few years. Dubai is the fourth largest diamond market. According to Youri Steverlynck, CEO of the Dubai Diamond Exchange, the size of the diamond jewelry market in the Gulf is $5.1 billion, rough diamond trade $3.9 billion, and polished $ 3.4 billion.
Half the jewelry sold in the local gold market is manufactured in Dubai, said Farah, and the DMCC wants to encourage more of that, particularly by increasing training and education. “We have no hesitation to go out and get the talent we need to make this happen.” Dubai has 850 jewelry outlets at malls gold souks, high streets, said Dhamani, with 90 percent of its tourists buying jewelry, with average sales at about $2,500 one of the largest purchasing prices per capita in the world. “Last year, we saw seven million tourists, and by 2015 we expect that number to reach 40 million.”
Dhamani hailed colored stones as Dubai’s next success. “The climate is very conducive for color, with fluctuating gold prices and small margins in diamonds, jewelers here are looking for different ways of adding more value and colored stones provide more opportunity,” he said. Next to diamonds, a favorite of the region, emeralds are highly sought-after followed by ruby and sapphire. But as the push for fashion continues, he believes the region will open up to many other gems.
According to Farah, the DMCC has placed greater emphasis on the gem industry with the Dubai Gems Club, a special platform created to facilitate the secure trade of gemstones, pearls, and diamonds, as well as offering access to the Dubai Gem Certification unit, the world’s first ISO certified gem certification service. By December, the 64-story iconic Almas Tower will open and become home to the DMCC, Dubai Diamond Exchange, traders, retailers, and other jewelry related companies He also mentioned initiatives similar to the promotion of the 99-facet Dubai Cut Diamond. Still in its infancy, the project will look to trademark the Dubai Emerald, Dubai Ruby, and Dubai Sapphire. Farah said the DMCC is registering these trademarks and will explore sources for the gems and standards that qualify a gem to be dubbed “Dubai”.