Armenia Vows To Assist Ailing Diamond Industry

diamond

Workers at the Lori diamond-processing company.

YEREVAN (RFE/RL)–The government pledged on Tuesday to attract large-scale foreign investments and provide direct assistance to Armenia’s diamond-processing industry, once a key sector of the national economy that has rapidly declined in recent years.

Officials said a major Indian jewelry company, Firestone, would like to launch operations in Armenia as President Serzh Sarkisian visited one of the country’s largest diamond-cutting plants located near Nor Hajn, a small town about 15 kilometers north of Yerevan.

Sarkisian inspected the Lori plant’s production facilities before holding a meeting of senior government officials and industry executives. Firestone representatives were also present at the meeting which the presidential press office said focused on “the problems of the diamond-making sector and ways of solving them.”

According to Economy Minister Nerses Yeritsian, the Indians expressed a desire to make substantial investments in Lori and the broader sector. “We are talking about creating, within a short period of time, hundreds of new jobs as well as joint investments by the state and the private sector worth tens of millions of dollars,” Yeritsian told journalists.

The minister did not elaborate on the investment projects. He stressed instead the need to modernize a sector that still employs about 2,000 people. “Modernization is necessary both in terms of management and the diversification of sources of raw materials,” he said, according to the ARKA news agency.

Refined diamonds were Armenia’s most important export item throughout the 1990s and the early 2000s. The Armenian diamond-processing industry has been in freefall since then due to a host of mainly external factors, including a loss of reliable suppliers of rough diamonds.

One of them, Israeli billionaire Lev Leviev, effectively shut down his Armenian factory, also located in Nor Hajn, two years ago. The Shoghakn factory employed more than a thousand people.

According to official statistics, Armenia’s combined diamond output tumbled by more than half to 39,138 carats during the first ten months of this year. It was down by 14 percent, at 100,945 carats, in 2008.

The sector seemed to receive a new lease of life in August 2007 when the Armenian government and Russia’s diamond-mining giant Alrosa signed an agreement to supply some of the local manufacturers with Russian rough diamonds. Alrosa suspended these deliveries in spring 2008, reportedly because of a tax dispute with the Russian customs service.

The Alrosa chairman, Sergei Vybornov, pledged to resume the supplies and even provide a loan to their Armenian recipients during a visit to Yerevan in March. The government said at the time that the two sides will hold further talks on the terms of the “mutually beneficial loan.” No agreements to that effect have been announced since then.

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8 Comments

  1. Pingback: Armenia Vows To Assist Ailing Diamond Industry | Asbarez News | armeniatoday

    • Peter said:

      are u armenian Bruce?  do you live in North America or Armenia?  im actually planning a trip to armenia to meet some diamond cutters.  Do you know if there are any smaller “mom and pa” type business that can provide diamond processing.  Any info will be helpful.
      thanks

      • Bruce Tasker said:

        Peter,
        I am a Brit and have lived in Armenia for 15 years. I have spent the past year fighting off a trumped up charge by the regime, which has been claiming (illegally) that I owe $65,000 for my commercial activities. In fact it has been reprisal for my anti-corruption campaign. They eventually withdrew their claim, after more than 10 court sessions and a couple of judges.
        So now I am free to leave Armenia, and I am pleased to say on my way back to the UK.
        All diamond businesses are now controlled by Kocharian, so no matter whoever you may do business with, he will always be in the background.
        Good Luck – you will need all you can get!!
         
         
         
         
         
         

        • Peter said:

          Bruce,
          Sorry to hear about the mess you had to go through!!!  Wow.  I am armenian, but have never been to Armenia.  I have a beverage manufacturing plant in Central Africa (so i know all about corruption)..  but the opportunity to get into the diamond trade has been offered to me a few times by some of my local partners.  When they found out that I was Armenian, they kept on me!!  As you know, some of the worlds best Diamond cutters are from Armenia, so I am in the process of trying to connect with some small to medium sized cutters in the country.
          I am not interested in dealing with the big cutting plants, cause my volume is simply not high enough..but I was hoping there would be some smaller business with skilled tradesmen to work with me.
          Apparently you can import and export diamonds from Armenia without any duties (unless that rule has changed).  Any suggestions, thoughts, or leads???  I can speak the language, so talking to people will not be a problem.
          I would appreciate any of your feedback!
          PS, what field of work / business are you in?

          • Bruce Tasker said:

            Peter,
            To date you have been wise, so why not keep it that way. Look for a more civilized country to spend you money and develop your diamond interests, and as you are already in Africa, why not go for Angola.
            Stay wise – stay away from Armenia, things are going to continue getting worse for some time, before they have any chance of getting better.
            Regards,
            Bruce
            For more info on my activities, you could log on to my ‘Blowing the World Bank Whistle’ blog.
            http://better-not-wb-the-wb.blogspot.com/

  2. Bruce Tasker said:

    Armenia’s diamond industry did not collapse in the early 2000’s due to a host of mainly external factors, it failed in typical Kocharian fashion, as he forced Ara Abrahamyan, one of Armenia’s most prominent businessmen and supplier of most of Armenia’s rough cut diamonds, out of the Armenian diamond business. Kocharian’s attempt to take over this particular sector of Armenia’s economy failed, causing a major decline in the diamond industry and  costing thousands of work places.
    This direct assistance to Armenia’s diamond-processing industry is yet another instance of the regime filling its own pockets, with tens of millions of state dollars, provided by the WB for the ‘development of small and medium business’ and this time facilitated by an Indian company.

    • Bruce Tasker said:

      Here comes the state investment – another $100 million from Russia, not to be provided to the diamond industry through Armenia’s banks, but pumped directly into Kocharian’s pockets, in the same devious way he became accustomed to through his ten years of Presidency.
      Again Armenia’s under-privileged are being burdened with massive foreign debt to pay for operations run by the regime and their cronies.
      http://www.itar-tass.com/eng/level2.html?NewsID=14679539&PageNum=0

  3. Pingback: Armenia Vows To Assist Ailing Diamond Industry | Asbarez Armenian News | Drakz News Station

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