February 15, 2010

Afghan Gem Dealers Join Thousands in Arizona for Leading Trade Fair

Even as many of its export markets are derailed by ongoing conflict, Afghanistan is working on ways to satisfy the world’s demand for gemstones.

From February 2-7, 2010, 20 Afghan traders displayed their gemstones and jewelry in the Gem and Jewelry Exchange Trade Fair in Tucson, Arizona. The event attracted thousands of buyers, collectors, and enthusiasts from around the United States and the world.

Afghanistan yields some of the finest quality emerald, ruby, aquamarine, tourmaline, and kunzite. Its gold, silver, and deep blue lapis jewelry is also widely admired. In Tucson, traders displayed more than 15,000 gem specimens at the show’s Afghanistan Pavilion.

The Afghan traders were sponsored by the Afghanistan Small and Medium Enterprise Development (ASMED) Project, a DAI-implemented project funded by the U.S. Agency for International Development (USAID). Participation in the Tuscon fair was organized in partnership with the Afghan Gemstone Traders Association.

ASMED experts consider gemstone exporting to be one of the country’s highest potential business sectors. ASMED and gemstone association officials believe that given the necessary support, within five years the country’s gemstone industry could reach export sales of more than $300 million per year.

While in Arizona, the traders visited the local ASARCO copper mining operation; the Mountain States R&D International mineralogical and geological testing laboratory, where they viewed latest techniques for substrate/mother rock removal from gem clusters; and the Caterpillar heavy mining equipment manufacturers' testing site. The visits were organized in cooperation with the U.S. Department of Commerce's Afghanistan Reconstruction Task Force in Washington, D.C.

Participants said these visits were critical to Afghanistan's capability to export rough specimens and, eventually, cut stones to the international market. By meeting numerous buyers, retailers, and cutters at the gem show, the Afghans gained a better understanding of demand in the extended value chain—an important perspective because most of their rough material is currently traded to Pakistani intermediaries for processing and further export. The Afghan traders plan to work with ASMED’s "mines-to-market" program to solve some of the challenges Afghanistan faces in the exploration, mining, extraction, cutting, and marketing of stones for export.

At $170,000, the Afghan delegation’s overall sales were somewhat less than anticipated, reflecting weak demand that can in turn be attributed to the state of the world economy: inventory is high and buyers are accordingly tight, requesting special pricing.

But dealers expressed substantial interest in the specimens, in particular the ruby, tourmaline, and aquamarine lots, and the lapis jewelry pieces. And the Afghan traders absorbed valuable market information they can use to better price their lots and prepare their specimens, and established good contacts in the industry for potential future sales.

ASMED’s gemstone sector development project was launched in spring 2009 to revive Afghanistan’s rich gemstone and jewelry heritage. Working directly with miners, the Government of Afghanistan’s Ministry of Mines, and local and international gemstone dealers, USAID and its implementing partners are stimulating the gems and jewelry industry at all points along the value chain, from mines to markets, emphasizing fair-trade working practices, social responsibility, and environmental sustainability.

Under ASMED, DAI is providing technical assistance and financial support to the small and medium-sized enterprise (SME) sector and to organizations throughout Afghanistan that support SMEs. Headquartered in Kabul, ASMED’s activities have national reach, with provincial offices in Herat, Nangarhar, and Balkh, and partner activities in Helmand, Kandahar, and Badakshan.

Other key, sustainable sectors targeted by ASMED include marble, handicrafts, carpets, agribusiness, and cashmere and wool.