Editor’s Note
This article explores Israel’s surprising early economic history and the factors behind its shifting position in the global diamond trade.
Israel is today a global tech power and a center for advanced defense industries, but during its first 15 years of existence, its two main exports were Jaffa oranges and diamonds.
Ever since the British Mandate authorities decided in 1936 to abolish customs duty on diamond imports into pre-state Palestine, the country has been a world leader in this sector, followed by Belgium. However, the Israeli government was less interested in diamonds or how they could be leveraged to its benefit, the result of which is that today Israel has dropped to third and fourth place. Those now in the lead are India (second place) and Dubai (first place). Israel has a hand in their achievements: the UAE studied the Israeli Diamond Exchange model, and adapted it to their needs, while India learned production methods from the Israelis.
Israel is still considered a world leader in quality polishing, yet there has been a consistent and significant decline in diamond imports and exports. The person elected to save both the situation and the Diamond Exchange’s reputation is President of the Israeli Diamond Exchange Nissim Zuaretz, who took up his post a year ago.
In his first interview since taking office, the man who sells jewelry to the likes of Ivanka Trump, Victoria Beckham, Serena Williams and Kim Kardashian, tells “Globes” about the difficulties in the diamond sector, (“The government did not support the industry”), about his goals for the Diamond Exchange, (“I want to see many young people join”), and the effects of US President Donald Trump’s policies on the sector (“About 60% of diamond exports are to the US. For us, even a 10% tariff is a lot”).
“I was appointed to this position to maintain the status of the Israeli diamond industry, which was plagued by crises. Our government did not support the industry, compared with Dubai, for example, where the government created a free trade zone. If Israel once had a turnover of about $20 billion and Dubai had $2 billion, now Israel’s turnover is $7-8 billion and Dubai has more than $20 billion,” says Zuaretz. As he sees it, he wakes up every morning “to do battle with the government authorities and all the ministries.”
The importance of the diamond industry is reflected in its exports, which consistently account for about 8% of all Israeli merchandise exports. However, the figures are declining: net rough imports last year fell by about 13% to about $800 million net, while polished imports fell by about 33% to about $1.5 billion. At the same time, rough exports fell by about 24% to about $630 million net, and polished exports fell by about 35.6% to about $1.8 billion.
Zuaretz (52) is an unusual figure for the Diamond Exchange. His management strategy, age, and family background do not fit the industry profile. After the army, he did not enter the exchange through a family connection, as most do, but through the father of a friend. “I came from the outside and it was hard for people to accept that,” he admits. “Even during the election for (Diamond Exchange) president, it was hard for people to digest.”
His journey began as a salesman on the Diamond Exchange with the late David Arbov, a well-known diamond industry figure. A few years later, in 2007, they founded DN Diamonds, which has since won the President’s Outstanding Exporter Prize three times, with export turnover of more than $150 million. The company is headquartered at the Diamond Exchange in Ramat Gan, and has branches in Hong Kong, New York, and Dubai.
You really don’t see many young people in the corridors of the Diamond Exchange.