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WEEKLY NEWSLETTER
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Israel
Index
Israel's diamond industry in the 1980s differed considerably
from its 1950s version. Until the early 1980s, a handful of large
firms dominated the Israeli diamond industry. The nucleus consisted
of European Jewish cutters who had immigrated during the Yishuv. In
the 1970s, Israel surpassed Antwerp as the largest wholesale
diamond center, accounting for more than 50 percent of all cut and
polished gem diamonds. Diamonds were the only export in which
Israel was more than a marginal supplier.
Unlike other industries, the diamond industry was affected
entirely by external factors not under Israeli control. The diamond
industry imported rough diamonds, cut and polished them, and then
exported them. The slump in the industry from 1980 through 1982
surprised many Israeli firms that had speculative stockpiles. The
result was a complete restructuring of the industry in FY 1984, and
the creation of approximately 800 new and smaller manufacturing
units. These small entities in mid-1986 concentrated exclusively on
cutting, leaving the marketing to larger export firms. This latter
task was supported by the 2,000-member Israel Diamond Exchange and
the 300-member Israel Precious Stones and Diamonds Exchange,
together with the quasi-governmental Israel Diamond Institute.
The success of this revitalization can be seen in the trade
figures for the industry. In 1982 net diamond exports were US$905
million, equal to 18 percent of total exports; in 1986, however,
diamond exports had grown to nearly US$1.7 billion, or
approximately 24 percent of total exports.
Data as of December 1988
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