Salaries were just too cheap to compete with, he said, first in India — the world’s biggest importer of rough diamonds — and later in China.
Israel has subsisted on larger, high-end stones whose owners pay more to have them manufactured close to home. Yet industry leaders hope to change that, in part because polishers in developing countries are demanding more money.
The GIA’s decision to open a lab in Israel was a first step. Manufacturers can now have their diamonds graded and evaluated in Israel rather than sending them to the US.
“It’s critical for the growth, for the international branding of the export business, and we think that we’re a good partner to help the manufacturing grow,” GIA president and CEO Donna Baker told reporters when the lab opened.
By cutting costs and allowing increased turnover, it will add between US$30 million and US$50 million a year to the industry.
At the peak of manufacturing in the 1980s, there were 20,000 people cutting and polishing diamonds in Israel. That has dropped to about 2,000.
“There is no new manpower. Most polishers are 50 years old and up,” diamond factory owner Roy Fuchs said. “If they don’t invest and bring in new blood, there simply won’t be manufacturing.”
“It’s not easy. You need cooperation with the government,” said Udi Sheintal, the Israel Diamond Institute’s managing director. “Here in the middle of Ramat Gan, you don’t get incentives. There are only incentives for certain populations, like the haredi.”
The term haredi, which in Hebrew means “those who tremble before God,” refers to people who strictly observe Jewish law.
Between 8 percent and 10 percent of Israelis are haredi. According to the Bank of Israel, less than half of Orthodox men work.
The issue has created a rift in the mostly secular Israeli society and put a strain on an otherwise robust economy. The Isreali government has earmarked US$200 million over the next five years to encourage haredi integration in the work force.
Many in the new generation of haredis are open to the idea of getting jobs. The key is finding one that fits, said Bezalel Cohen, 38, who promotes employment among his fellow haredis.
“The diamond industry’s initiative [to hire Orthodox] has potential to really succeed,” he said. “As long as the pay and training is proper, it should take off.”