Diamond Sector Considers the “New Normal”

Posted by ADL News via Bruce Counts

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Stability in the diamond market, concerns over sharply rising rough prices, praise for the policies of diamond miners and banks and a “new normal” in the global economy were the main themes of the second Antwerp Diamond Symposium held on November 16. Although the mood of participants at the event, organised by the Antwerp World Diamond Centre (AWDC), was far calmer than at the first-ever symposium held last November when the global financial crisis was at its height, diamantaires nevertheless stressed that a full recovery was still some way off.

The symposium was opened by AWDC CEO Freddy J. Hanard who said the diamond trade’s stakeholders came together last year, to discuss a strategy in times of financial insecurity. Thanks to the decisions taken during the first diamond symposium, new strategic business models and practices had been developed. Despite a calmer mood in global markets, the 2009 symposium had been necessary due to changing world conditions which called for the diamond industry to come together to debate current developments. As the world’s largest diamond trading centre, Antwerp was the ideal meeting place for dialogue, he said.

“Many of you were here last year when we held the first symposium in an atmosphere of financial uncertainty. The symposium gave us all the opportunity to explore issues affecting us all and we made a great deal of progress. In the last year, the key stakeholders have come together and shown collective responsibility. This was satisfying for us at the AWDC because facilitating dialogue is an important part of our work. We have navigated through the challenges and we are stronger now.

“We are stronger now, so the question is: Do we need another symposium? The answer is yes because we are living in a changing world and we need to come together to understand the changes. Strategies and practices of businesses throughout the pipeline have changed. Mining companies have not been immune to the changes and have rethought their sales strategies,” Hanard stated.

“The gravity of the issues facing us should not scare us,” Hanard said. “If we act proactively we will succeed. We have the destiny of the industry in our hands. Are we looking for answers, results and predictions? We will not solve all of the problems today, but we can get an insight into how we can go forward. I do not doubt that the different messages carried out through this symposium, will be put into practice in coming months.”

Hanard was followed by Cathy Berx, Governor of the Province of Antwerp who revisited some of the comments she made at the 2008 symposium to illustrate the fact that Antwerp’s long history as a diamond trading centre should give diamantaires confidence about the future. Berx spoke about the massive government stimulus plans that have saved the global economy from sinking into a 1930s style Great Depression.

“During the decade leading up to the collapse of the markets in September last year, the dominant or dominating philosophy – depending on where you stand – was that government’s primary role was to ensure that business be allowed to do what it knows best, undisturbed. Today, with the benefit of hindsight, we realise this was an approach that was perhaps followed too zealously. More careful oversight in the financial markets, coupled with better managed checks and balances, may have helped the world economy avoid the crisis. As it was, the financial system was saved from the brink of disaster by massive injections of government capital. By staying away, government ironically found itself more involved in the markets than it ever had intended.”

Berx said it was “reasonable to expect” a recovery in the diamond markets during 2010, possibly beginning with the 2009 Christmas season. But she warned that it was generally accepted that the recovery would be slow. “Here in Antwerp we have seen that across the board, and not only in the diamond sector. Container traffic at the Port of Antwerp fell by 18.4 percent during the first nine months of the year, compared to the same period in 2008. However…..

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