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Diamonds Are Not For Ever

The meltdown has forced closure of 6,000 of the state’s 10,000 diamond cutting-and-polishing units in the past four months what with an increasing number of the owners, saddled with huge quantities of unsold polished and rough diamonds, declaring themselves bankrupt.

The result is that as many as one million of the 1.4-million nimble-fingered artisans have been rendered jobless in Gujarat which accounts for 72 per cent of the world’s processed diamonds and 80 per cent of India’s diamond exports.

With the Narendra Modi regime and the central administration winking at their plight, at least 80 laid-off labourers and their family members, who till recently rolled in luxury with a Rs 15,000 monthly income, have committed suicide since October last while others have taken to crime to keep the wolf from the door.

The mass exodus of the skilled workforce in search of alternative jobs has become the order of the day not only in diamond hubs of Surat and Ahmedabad but also smaller towns like Amreli, Palanpur, Rajkot, Navsari, Junagadh and Bhavnagar as there is little hope of the situation improving in the 
near future.

We mainly survived on US demand for polished and semi-polished diamonds but now the orders have sunk by 50 per cent and payments have reduced to a trickle. At least for another six months, the exports are unlikely to look up again, Babu Patel, an Ahmedabad-based processor who has 120 lathe machines, told Khaleej Times.

According to Surat Diamond Assocation president CP Vanani, India’s polished diamond exports went down by 21 per cent to $656.08 million in December, 2008 compared to the same month in the previous year.

Indeed, the global economic downturn leading to a recession in the domestic market, the galloping production costs due to inflationary pressures triggering an acute shortage of raw material and the rough precious stones as well as a tough competition from countries like China, Sri Lanka and Indonesia have all pushed the industry into its worst financial crisis in 20 years.

Gujarat’s 30-odd associations representing cutters, polishers and traders have failed to take up the cudgels for their hard-pressed members but have recently begun distributing food grains to them and paying the fees of their school-going children.

Most of the office-bearers of these associations are leaders of the ruling BJP and hence are unable to raise their voice against the state government, said Vinu Jogani, secretary of the Ahmedabad Diamond Association.

Even as angry and desperate workers continued to stage demonstrations against their employers outside their closed units, the diamond associations last week floated a federation to mount pressure on the central government.

The Gujarat Diamond Federation wants New Delhi to declare a bailout package, including a 50 per cent reduction in electricity tariff, soft loans by accepting diamonds as mortgage, a Rs2,500-a-month unemployment allowance for all jobless workers, ex-gratia assistance to the families of those who have ended their lives in desperation and scholarships for workers school-going children.

On his part, chief minister Modi refused to offer sops to the diamond industry and, on the contrary, threatened to jail the owners who kept their units closed. When this warning failed to do the trick with only a few factories reluctantly resuming their operations, he passed the buck to Prime Minister Manmohan Singh asking him to announce a relief package.

Wives of 1,000 diamond workers last week dashed off SOS post-cards to Modi for help as he himself had once suggested and several senior hands on February 2 reached Gandhinagar, walking all the way from Surat in protest to submit a memorandum to the chief minister’s office, but all this turned out to be a cry in the wilderness.

The Gujarat government just offered work involving casual labour under the National Rural Employment Guarantee Act (NREGA) but most of the dexterous diamond workers who had sedentary jobs with fans and even air-conditioners refused to sweat it out for road widening work and similar other back-breaking jobs just for a pittance in return.

BK Joshi, Assistant Commissioner, NREGA, Gujarat, told this correspondent that at least 100 days work was guaranteed in this scheme but admitted that the wages were not as high as those paid by diamond factories.

With the Lok Sabha elections not far away, politicians, including some form the ruling BJP, quickly decided to cash in on the crisis.

While the Congress, the CPM, the Samajwadi Party and the newly-formed Maha Gujarat Janata Party (MGJP) burnt Modi’s effigies, organised hunger strikes and staged noisy demonstrations in diamond markets in Surat and Ahmedabad, BJP MPs wrote letters to the Prime Minister and demanded a Rs500 billion relief package for the diamond industry.

The Congress and the MGJP have now held out a threat that they will gather thousands of laid-off diamond workers in Gandhinagar when the budget session of the legislative assembly begins on February 17, if the Modi administration fails to announce a suitable bail-out plan by then.

Eighty diamond families have ended their lives in the past four months. How many more suicides the BJP regime wants to witness, asked MGJP chief and former home minister Gordhan Zadafia, who also owns a diamond processing unit in Ahmedabad.

Congress leader Shakti Gohil said that the BJP administration had money to burn in ‘useless festivals’ but became out of pocket when it came to helping the frustrated diamond workers, who, he said, would even boycott the Lok Sabha polls. As Babu Jariwala, president of the Surat diamond workers association, said, sparklers produced by 1.4 million artisans fetched foreign exchange worth Rs 90 billion and hence the state and the central governments should come to their rescue before the industry loses all its lustre.

mahesh@khaleejtimes.com