GEM INDUSTRY IN SRI LANKA
There was an upheaval in the Gem Industry Circles of Sri Lanka when offi cials of the State Gem Corporation raided the premises occupies by the Thai nationals in mid 1983. The resultant reaction was much debate on this issue Figure 1. Left , rrrilky while "guada" at both the government and massmedia level, and these rcperenssions are still corundum from Sri Lanka; photograph being felt today. With a view to obtaining a first hand knowledge of this situation by Tino Hammld. Right, Intense blue the writer conducted a comprehensive study of the issues. colour induced in Sri Lanka "geuda" by the heating method described In This article is based on his study, which will be published fully in due course, process 3; photograph by Michael and the information gathered from people associated with the gem trade in Sri Harvested. Lanka at various levels.
Introduction tracted into the local gem trade by the gem trade as a result and that the this variety of stone have had activities of the Thai gem traders were Sri Lanka hat one of the worlds on the industry. causing much damage to the local largest reserves of the milky stones economy and they were making fortunes called "Geudas" which have the same Having entered the local gem market by smuggling raw geuda stones out of composition as blue sapphires. six years ago they have influenced it the country and turning them into considerably. Their influence on the precious stones. These gem merchants A study of the geuda trade, which local economy and sections of society in insist that the Thais should be removed is of major significance in the present which they operated has been both from the local gem trade since the Thais day gem industry in Sri Lanka and beneficial and harmful. carry gems out of this country by ille which has been the subject of much gal means and the country loses foreign controversy, is presented here. This By the identification of a new exchange. They point out that this will stone whose economic importance was type of gem the Thai participation has inevitably lead to a serious blow to the not recognized by gem businessmen considerably raised the economic and gem trade of Sri Lanka. and the authorities and which was social level of thousands of persons thrown away by gemmers until recent connected with the gem industry. This situation prevailing in the times has brought about a considerable On the other hand this has had a harmful gem industry of Sri Lanka at present is transformation in the gem industry effect on the prestige that Sri Lanka discussed here. A detailed review of Sri during the last six years. Special atten has had so far in the gem trade. Leading Lanka's gem industry was made in an tion here has been paid to the effect gem merchants of this country maintain earlier issue of the Economic Review In that the Thai nationals who were at that illegal activities were rampant in September 1977.
ECONOMIC REVIEW APRIL'85 more and more Thais started THE GEM INDUSTRY IN SRI LANKA coming here for the same purpose.
Impact of Thai Intervention The Thai nationals who thus came to this country in great numbers set up purchasing centres Due to the identification of a stone, neither gem businessman or through local individuals and began new variety of gem among the gem geologists nor the State Gem Cor purchasing geudas with a great resources of Sri Lanka a new trend poration were seriously aware of its fanfare of publicity. At this stage has emerged in the gem industry structure or the category to which most gem businessmen and gem and a greater number of people it belonged or its value. It was only mcrs did not even know what geudas have taken to it. This has coin the kinds of gem mentioned earlier were. With the influence of Thai cided with the entry of foreigners that had any commercial value in nationals and due publicity geuda into the local gem industry for the Sri Lanka's gem trade. prices went up gradually. In the first time in recent history. Pre initial stages there were instances viously the foreigners who came to Thailand has been famous for when a kilo of geuda was sold for buy local gems were mostly west its gems from ancient times. Rubies a mere, two or three hundred ru erners and fh earlier times Arab and Supphires of high quality pees. Finally these stones went up traders. They eame to buy various were found in large quantities in so much in price that sometimes kinds of precious stone for which the areas of Chanthaburi and Trat they were sold at about Rs. 15,000 Sri Lanka had been traditionally in the Western part of Thailand. In or 20,000 per carat. famous viz. Blue Sapphires, Rubies, addition to these Zircon, Garnet, Catseyes etc. These customers in Quartz, Amethyst, Opal and Acqua- The Thai nationals who pur recent decads came to Colombo, marine and Diamonds are found chased geudas in Colombo later stayed in leading hotels and pur in small quantities. Thailand like Sri went further and took residence in chased cut and polished gems Lanka has long years of experienc rented houses at Ratnapura and through well-known gem merchants ed and an international reputation started buying gems on thejr own. or from the stalls of the State for its gem industry. It may be said that with the Thais Gem Corporation. In 1978 another taking up residence at Ratnapura group of foreigners started coming The first country to involve there was a new turn in the gem in. They were the Thai gem traders Thais in the gem business was business of this country. and they had a different purpose. Australia. The Thais were in the They were often gem and jewellery Geuda gem business in Australia The setting up of the State Gem shop owners of Thailand and what for some time but the Government Corporation they wanted to buy were not the of that country for some reason precious stones for which this decided not to allow them to carry country has been long famous. on the business. Thereafter they The recent history of the gem industry in Sri Lanka may be They were interested in a kind of eyed Sri Lanka. By this time the divided into two main periods, stone of so little value that the major gem businessman of this namely before and after the setting gemmcrs would throw it back country were engaged in selling up of the State Gem Corporation in into the pits when they came gems, taken out of the country 1972. Before the setting up of the across such stones. This stone legally or illegally in Thailand.At State Gem Corporation the gem is known by the term 'geuda' the beginning the stones thus taken business of this country was in the the name given it by the Thais to Thailand and sold were those hands of a few individuals and its themselves. that had traditional value. Later several persons carried geuda stones economic and social effect on the country was very limited. This Although this variety of stone too and sold them there. The Thais who purchased geuda stones group which was concentrated at is found in abundance .in gem pits, Bcruwela conducted the business only the larger stones were taken 'for a song' from businessmen of this country had no idea of the of gems, which was a source of home by the gemmers to be kept great wealth in the country, on an as ornaments or to be given to real value of the geuda stones The extremely personal basis. Until friends while the stones of medium Thais had the know how to turn that time (1972) the real impor or small size were thrown back into them into valuable gems by a tance of this sector to the eco the pits. These stones have some scientific process. When they found nomy had not been realised. In times been set on the garden walls they they could buygeudasat a very addition to those at Bcruwela a of gem businessmen in the Ratna- low prices, they came here and few persons, in the Ratnapura pura area. together with Sri Lankan business men went on heavy buying sprees. area too were engaged in the gem business. The gemmers traditionally Until the Thais-came to this However, the secret business could did that work in addition to their Country looking for this variety of not continue very lung because 4 ECONOMIC REVIEW APRIL '85 work as cultivators. They did not new' businessmen into the' gem have the knowledge to evaluate Tattel trade could also be observed. every gem they- found and were- in Meanwhile, due/ to the various the ctat6hes of crafty- business-lien. (Earnings frodptSsWfcxports (Rs.)' incentives offered to exporters Often they did the work of gem ming as hired labourers in mines there.was a record increase in the belonging to powerful families of 1947 37,783 value of gem exports. This is well the areas. They received a measly reflected in Table 1. allowance each week for this work. 1951 185,370 Sometimes when they found a During the period prior to the 1955 601,036 valuable gem they received a small , inaugaration of State Gem Corpora '*santhosam" (bonus) for it. 1958 1,535,952 tion (1943-1971) the highest an nual export values were seen in If a valuable gem was found '1959 2,964,254. 196S and 1970, as shown in anywhere in the island it found Table 1. Since 1971 (immediately its way to Beruwela. Affluent 1960 3,016,698 after the Gem Corporation was set gem merchants owning palatial up) the gem export values have houses and luxurious motor vehic 1961 2,359,576 gone up drastically from Rs.3 mil les purchased it at a price fixed at lion in 1971 to Rs. 12 million in their own discretion. 1962 3,563,586 1972; an increase of 25.7.8% over that of the export values As there was no standard price 1963 3,646,891 or a knowledge of international recorded in 1971. The highest 1964 1,312,127 prices, the owner of the gem had ever growth rate of export incomes in the gem export history were to go back home after accepting 1965 4,080,241 whatever price offered him. recorded in 1973. This was an un- 1966 3,884,456 beliveable 1042% increase over the Once these gems were brought export value in. 1972. Up to the by these traders no one know for 1967 3,471,145 year 1978 these export earnings certain what would happen to kept gradually increasing and since them. The entire transaction was 1968 2,028,357 then have kept fluctuating upto done extremely privately and con 1984. 1969 674,105 fidentially and no Government authority was vested with any 1970 4,284,356 power to interfere in this business. After the setting up of the 1971 3.446,286 State Gem Corporation a- great It is not possible to esti difference is observed in the values mate the resulting losses to - the 1972 12,331,076 of gem exports. A striking feature national economy by this attitude here is that the exports of the 1973 140,785,869 private sector have always surpassed of indifference to a valuable eco those of the State Gem Corpora nomic resource. Often these gems tion. Another fact is that the gem were sent out to other countries Source -.Records of the Sri Lanka exports in the period 1972-1978 Customs through illegal means. have not * shown a continuous upward trend unlike the other It was in 1972 that for the gem industry. Accordingly the exports. For instance there was first time a Government of the power to control all activities a continuous upward trend from 1972 to 1976 but a fall in 1977. country took action with neces pertaining to gems from mining Thus a fall in export earnings has sary laws to safeguard this valuable to export was vested in the Cor been recorded in the years 1979, resource the benefits of which poration. 1981, 1982 and 1984 compared the national economy was being With the setting up the State with the export figures of the deprived of. On a proposal made Gem Corporation there was a reas proceeding years. Although there by the then Minister of Finance surance in the Gem Industry. Be were several benefits to the econo Dr. N.M. Perera, the State Gem cause the head office of the Cor my and the industry from the acti Corporation was set up with the poration along with its Central vity of the State Gem Corporation absolute ownership of all the showrooms was located in Colombo between the years 1972 to 1978, it gem land* in the country and the- centres of the gem business gradual may be said that this same situation right to* control all aspects of the ly emerged in Colombo. Entry of has not prevailed thereafter. The
ECONOMIC REVIEW APRIL '85 of gems is an extremely well orga nised affair. Although there has Table 2 been a rapid decrease in the record ed export of gems after 1978, The Value of Gem Exports after the setting up of there has been no significant decrease in the mining of gems and the State Gem Corporation (Rs.Mn.) the gem business in the gem bearing areas. This is made clear by the Year State Gem Private Total Annual figures relating to the permits Corporation Sector Perce issued by the State Gem Corpora Chi tion for business activities in gems. 1972 6.6 8.8 15.4 See Tabie 3.
1973 24.9 128.0 152.9 892.9 Smuggling of gems out of the 1974 15.9 116.9 132.8 -13.2 country appears to have increased after 1978. Due to facilities avail 1975 10.6 178.3 189.0 23.6 able for unhindered import of all kinds of goods, the funds realized 1976 8.8 . 278.4 287.1 51.9 by the smuggling of gems might have often been used" for the. 1977 10.9 242.9 263.9 -8.1 import of profitable uneconomic goods. Due to this reason, although 1978 82.6 442.5 525.1 99.0 the gems found were purchased by private businessmen there are 1979 45.2 449A, 494.7 ' -5.8 few records of what happens to 1980 65.4 598.3 663.7 34.2 such gems thereafter. This is confirmed by the rapid drop in 1981 8.4 624.1 632.5 -4.7 the values of gems sold to the Corporation although business acti 1982 7.5 385.9 393.4 -37.8 vity in gems has reamined un changed. Table 4 illustrates the 1.4 519.1 520.5* 32.3 1983 purchases of Gems by the State Gem Corporation. 1984 6.8 497.7 504.5* 24.4
These figures show that after * Includes 64 million in non commercial export of the private sector 1978, especially after 1980, neither the businessmen nor the miners Source : State Gem Corporation have tended to sell gems to the Corporation. The discrepancy between the gem export figures for 1972 and 1973 in Table 1 and 2 is due to the fact that Table 1 is based on customs records. It has been There has been a special factor possible to obtain a far more realistic and accurate figure only after the State influencing this situation. It was the Gem Corporation was set up. entry of Thai nationals into the gem trade here. They first purchas policy of free exports implemented sea traffic increased. There was ed geudasonly but later they moved (after 1977) may be said to have great activity in the airport and on to buy other kinds of gems too. had some influence here. Except the Colombo harbour. Due to This situation, in addition to the for 1980 there have been big these reasons private traders, who lack of any incentive in going to declines in gem exports during were in the gem business appear the State Gem Corporation has to have reduced their transactions other years. led to a decline in gem sales to the with the State Gem Corporation Corporation. and tended to carry on their With the policy of an open business through other measures. economy which came into effect There appears to have been greater in 1978 the import-export trade A New Era opportunities for smuggling of became more open. The number gems. Regular detections by Cus of businessmen of various types While the time before and toms officers at airports and other going abroad from this country after the setting up of the State points have borne this out. and coming here from other coun Gem Corporation may be consi tries increased rapidly. Air and It is well known that smuggling dered two major periods in the
ECONOMIC REVIEW APRIL '85 there was no appreciable increase in prices .-.of geuda stones;' but Table 3 when they later began to come in large numbers greater competition Issue of Permits for Gem Business and Mining of Gems occured and these stones began to grow rapidly in price and final ly reached a level of the prices Year Mining • Business Total offered 'for traditionally more Activities valuable gems. It is interesting to note that though the first batch 1972 1.565 2,422 3,987 of Thai nationals who came here to buy gems were the leading 1973 3,537 2,335 5.872 businessmen from Thailand the majority of those who moved on 974 3,027 1.737 4,764* to residence in Ratnapura were not
1975 2,977 2,160 5,137 "so wealthy. When it was realised that gems bought in Sri Lanka 1976 3,637 2,544 6,181 could command a very good market in Thailand, it is possible 1977 4,179 2,565 6,744 that a large number of small time . businessmen too thought of com 1978 4,179 2,720 6,899 ing to Sri Lanka for business. Just as some years earlier it was 1979- 4,325 2,354 6,679 found that leading businessmen in Sri Lanka travelled to Singapore 1980 3,946 2,741 • 6,687 and brought back various articles 1981 3,550 2,554 6,104
1982 3,385 2,097 5,482 Table 4 1983 3,692 2,106 5,708 Purchase of Gems by 1984 3,472 2,168 5,640 State Gem Corporation (Rs.Mn.) Source : Slate Gem Corporation
1973 107.7 gem industry of this country, poration with all its powers was as pointed out there are the post indifferent to the activities of the 1974 13.0 1972 period (the period after the Thai nationals who came to this 1975 6.4 Corporation was set up) and a new country as tourists and started era-alter 1978. buying gems with no permission or 1976 8.2 right whatsoever. They pointed out What happened with the entry that State Gem Corporation offi . 1977 6.3 of Thai nationals into the local cers continued to penalise villages gem trade may be said to have who dug pits in their own land or 1978 21.9 taken the gem industry along a the paddy field in their search path different from those of the for gems and even confiscated their 1979 40.9 two former periods. implements but took no notice of 1980 1.4 the Thai nationals who carried on The distinguishing feature of business day and night, opening 1981 4.2 this period is that the monopoly purchasing counters and displaying that leading personalities in the gem advertisement boards, in close prox 1982 3.6 industry had held in both the proce imity to Corporation officers. eding periods broke down consider 1983 1.1 ably after 1978. The other main Economic and Social Impact feature of this period is the of Thai Gem Traders 1984 11.5, apparent inactivity of the State f!cm Corporation As several local At the start the Thais arrived businessmen pointed out the Cor in Sri Lanka in small numbers and Source : State Gem Corporation
ECONOMIC REVIEW APRIL '85 which fetched a high va.lue here, and later the small scale business Countries to which Sri Lanka's Gems were exported in 1984 men too followed their lead and began going on shopping spress to Singapore with a view to reselling Percentage of in Sri Lanka the goods they had Country Rs. Total export bought.: similarly the Thais too appear to have come into the gem Japan 235,403,000 7.0 business in Sri Lanka in stages.
U.$.A. 63,627,000 13.0 Though the Thai nationals were novices to the gem trade in Hong Kong 58,623,000 12.0 Sri Lanka, once they took up residence at Ratnapura, they were Singapore 41,698,000 6.0 able to create somewhat of an . 7.0 impact on the gem industry in the Switzerland 36,213,000 country. Once the stones which 3.120,000 6.0 hitherto had seemingly no value France began to fetch a comparatively West Germany 1,273,200 2.4 high value the Thai nationals were able to keep the gemmers in United Kingdom 9.755,000 2.0 . Sri Lanka bound firmly to-them. Meanwhile, these Thai merchants Other 43,080,000 9.0
who did not wait at their office 0 desks to make purchases, began to visit the places of gem mining and Total 504,575,000 100.0 thereby - created a new awakening
Source : State Gem Corporation
The International Market for Gems of Sri Lanka quential. The figures at right show the exports of jewellery. We have so far "ot been able to make the best use of Sri Lanka's rupees. The following figures whicf\ Exports of Jewellery - 1778-1984 position as a major producer in arc in SDR's give a more realistic r the inte na»ional gent market. Al picture. Value in Rupees though our gems have been sup plied to the international market 1978 3,585,036 6,376,082 from ancient times, the economic 1979 1980- 9,307,516 benefits wc have derived are/insig Sri Lanka's Gem Exports •1981 • 15,303,207 nificant. Even after the Stati Gem 1982 19,935,236 Corporation was set up with the 1983 33,294,600 hope of deriving for the Govern 1975 22.39 1984 20,598,267 ment a part at least of the income 1976 29.51 of the gem, industry, (when the 1977 25.33 Source : State Gem Corporation difference between the cost and 1978 26.82 1979 24.50 the sale price could seen running According to the State Gem 1980 , 32.34 into millions) and with the aim of Corporation, the greater part of 1981 26.46 having some control over the 1982 16.67 the value of jewellery is in the gold industry, the situation has hardly 1983 19.94 content. Very often the gems used changed. A perusal of the export 1984 19.29 are very small ones of little value. figures makes this clear. The posi tion of Sri Lankan rupees receiv The countries that have pur ed-for gems exported from this In the export of jewellery chased Sri Lanka gems offered in country after 1975 has changed which has been growing in recent the international market and their over the years. The devaluation years, gems set in jewellery are value are given above. in the value of the rupee after also exported. When its effect the East Asian count ted 1977 makes it difficult to gauge, .on the drop in gem exports'is ex by Japan, are among the chief the actual . position in terms of amined; it is found to be inconse- importers of Sri Lankan gems.
ECONOMIC REVIEW APRIL '85 It is planned to provide specialist Manufacture of Jewellery ' . -•; iTbs taxes imposed on the import services through the jewellery school for Export of cut and uncut genu for the jewellery of the Colombo Technical College, to industry have been done away withfrom Improve the equipment and the cali The making of "feweifety- wb'ieti 1 ^November 1984.. This was announced brating stones used in the jewellery has existed as a cottage tb&istry. Iron* fey the Finance Minister in his budget industry, to grant scholarships for a very early time in this country was speech for 198S. The .tax on the import technical training in European Jewellery meant only for the local market until of gems ranged from t7% to 100%. The centres, to fund buyers' missions to Sri recently. However, with Government import tax 12% to 60% imposed on Lanka and to give international publicity encouragement this industry is now machinery used in the gem and jewel to local jewellery products through functioning as en important part of lery industries was also removed. The printed material of high quality. the export sector in Sri tanks. turnover tax of 7% on the jewellery and gem cutting industry too has been The report recommends assistance removed. This industry which was the pre amounting to U.S. $ 26,000 for those serve of a particular caste when it was purposes. a cottage industry has now broken out The tax holiday for alt export of those confines and has become a products has been extended for 5 more In order to expedite the develop source of great wealth and a business years. Thus the total tax holiday, in ment of the jewellery industry • th<< open to others too for participation. cluding that given 4 years ego, witt be Government has also provided facilities 10 years. to attract foreign investors. A jewellery Although the making of jewel production centre has already been set lery has been a traditional craft those The Government has taken action up in the Free Trede Zone. practising it had acquired great skill to encourage the private sector to pro in turning out beautiful products by duce the equipment necessary for gem traditional methods. The Sri Lanka cutting and for the production of in various gem mining areas such - Export Promotion Board and the State jewellery. At the international seminar Okkampitiya, Balangoda and in Gem Corporation realised that this do coloured gems held in Colombo* in the Ratnapura District. was an industry that could be very October Jest year, the Finance Minister easily developed and wen. able to Mr. Ronnie de Mel stated that the Another special feature in this provide the necessary facilities for the Government was taking action to see, new development was in the birth industry with Government backing. the that all services required by purchasers of a new class of young middle following facilities have been already Of gem and jewellery are made available man who began to buy stones on made available. under one roof of the International payment of ready cash to the Gem and Jewellery (exchange which is miners and offer these in turn to be set up in Colombo shortly. The Local jewellers are be.ng sent to the Thai nationals. This class abroad for training to toe trained in necessary laws for the purpose are al of businessman came mostly from new methods of making jewellery. ready being drafted and the Gem Ex among those who worked earlier in Meanwhile steps are being taken to change is expected to be opened by the' get skilled craftsmen from abroad for middle of this year. The Government is gem pits on a daily pay or those training craftsmen here. Action is also also providing facilities for the import with some formal education but being taken with aid from the EEC and Of gold and diamonds required in the without jobs. the Government of Belgium to set up an production of jewellery. institution to impart training in jewel These people have become lery making techniques, Training of newly rich in that they are now craftsmen is also being carried on m the A report prepared by the EEC or. in possession of semi-luxurious jewellery factory belonging to the State the development of the local jewellery Gem Corporation under the National industry states that the jewellery indus houses and new motor vehicles. Apprenticeship Board. try of Sri Lanka should be labour These monies which they earned intensive and not be dependent on without much effort were spent An Assay Office has been set up machinery. This report was prepared without any hesitation. The least under an officer trained in the Quality with the intention of giving necessary they gave even to a begger was one Control Institution of England for the assistance for the development of the rupee. Also it appears that they purpose of testing whether the jewellery local jewellery industry; were freely offering donations to exported is upto international standards the religious and social organisa The report points out that the and testing their gold content Steps tions and activities carried on in jewellery, industry in Sri Lanka should have also been taken to exhibit local the area. gems and jewellery at International be developed as one of the main in trade exhibitions and thereby to give dustries, tf the report is accepted by As conditions matured to this the EEC, the necessary assistance will them International publicity. social level, these gem areas also be forthcoming within three years. It became a hive of economic activity Jewellery factories with modern also emphasises the need to develop thereby creating vast job oppor equipment have been set up by the the technical quality and designing skills tunities. In a day, it was not dif private sector in the Tree Trade Zone of the jewellers as well as the need to and outside; and the State Gem Cor develop marketing and promotional ficult for these people to earn poration too is operating two such fee- skills. many more times the monthly , tories. salary earned by a public servant.
ECONOMIC REVIEW APRIL '85 Thus it is clear that with the Table 5 arrival of the Thai nationals, a new trend had developed in the Number of vehicles registered in Ratnapura District between 1977 & 1983 gem industry in this country. The Thai nationals helped the industry (As at January of Each Year) „by assisting to identity a large number of stones earlier discarded as worthless, and introduced these 1977 197* 1979 1980 1981 1982 , 1983 . stones into a market already dominated only by the valuable 1. Private Cars 3,086 3,247 3,456 3,837 4,000 4,158 4,200 gems. .This in turn resulted' in causing unprecedented economic 2. Hiring Cars 53 58 56 80 80 87 85 , needs in the gem mining areas. -* At least for their contribution in 3. Motor Cycles 727 742 811 1,660 2,051 2,263 2.300 this sphere the Thais should be complemented. 4. Private Coaches 50 50 53 81 62 62 62 Next, we should endeavour to • 5. Lorries 1.142 1.156 1.203 1.467 1,587 1,668 1,750 evaluate the merits and demerits of
the resentment shown towards the 6. Agricultural presence of Thai nationals in the Vehicles 990 1,029 1,084 1,425 1.563 1.602 . 1.650 "em indusfy bv big-time business men and the State Gem Corpora 7. Buses 26 26 25 46 69 97 110 tion. 8. Trailers. 298 325 335 482 453 453 475
A basic requirement for any 9. Herses 1 1 1 1 1 1 1 person to.enter the gem business in. this country is the possession 10. Motor Wagons 8 12 15 18 19 20 20 of a valid permit issued by the State Gem Corporation which grants
' authority to that effect. On issue TOTAL 6,291 6.646 7,039 9.097 9,885 10,410 10,653 of a permit, the business of gems should have to be carried on only at the place at which it was Table 6 permitted to operate. Generally, the Thais arrived in this country Percentage Increase of Monthly Average of Bank Deposits either as tourists or pilgrims. There fore, they had no right whatsoever Bank Branch 1978 1979 1980 1981 1982 to do any kind of business in this country. On the countrary, during the past 5 years they have* been Ratnapura 23.4 30.7 - 38.6 43.4 61.7 actively engaged in the gem busi 8.4 12.3 25.0 15.1 ness without having any right to do Kahawatte 10.3 so. Therefore it is to be accepted Nivitigala 5.2 8.4 :; 9.7. 12.2 14.6 without debate that the Thai nationals thus engaged in the gem Pelmadulla . - 9.6 14.5 18.5 19.5 business were doing so' without kept still until the problem had traders and gem Corporation offi authority. The question that arises grown in size and though at the cials expressed the following views here is why did not the State outset it could easily have been on this issue. On leaving Thailand Gem Corporation, which is fully mipped by a nail it now' had to for travel abroad as tourists or pil empowered to act in a situation be felled by an axe. grims, the Thai traders were allow such as this, not take any steps in ed to carry only a very limited . this area for so long a period. To The next issue that clearly ^amount of foreign exchange. Yet this question, the State Gem emerges is how -the Thai nationals while in Sri Lanka they made • Corporation - has no clear-cut ans managed to obtain the necessary tlatiy -purehascs of -gems worth! wer! What the State G-em Corpora? finance to purchase gems worth millions purely.. on payment in I lion appears to have done is to have millions tCONOMIC REVIEW APRIL '85 stances of their obtaining loans ,from big time local businessmen too. There were also instances Table 7 when making purchases of very valuable gems, the Thai nationals Large Scale and Smalt Scale. Bn'rglaries recorded in used to deliver a small scribbled Ratnapura District recorded between note to the sellers of gems who 1979 and 1982 were requested to call at a parti cular address in 'Colombo and Year No of Incidents Comparison with collect the money. In this case, . . Previous Year the addresses mentioned in those slips of paper were invariably 1979 1.032 references to Colombo businessmen 1980 1,312 + 27.1% of an Indian based community. It is difficult to presume that althou 1981 2,158 + 64.5%, gh the Thai nationals bought gems worth millions of rupees in this 1982 1,104. - 48.8% country, that Sri Lanka benefitted 1983 937 by way of earning any foreign - 15.1% exchange. There is no evidence to show that the gems they bought Source.: Police Station, Ratnapura in the local market, ever left the country legally. If the geudas cast only on the Thail nationals. the local businessmen too were bought by Thai nationals in all This is an area of activity that has not involved in these illegal trans- areas, including the Ratnapura been an integral part of the gem * actions. In some instances, accord .area, were exported by lawful business from its very inception. ing to informed traders it was not means the export figures should A comparison of figures available surprising if a gem found at Ratna have recorded at least a fifty-fold at the State Gem Corporation pura was sold to a princess in the increase. The enormous loss to the with those available for the busi Middle East by a businessman state in the form of evasion of taxes ness of gems transacted within the living in Bangkok .or Singapore. and the adverse effect on the eco country in a day, will disclose the nomy resulting from the illegal extent to which this situation has In the meantime, when the transactions of these businessmen grown. The authorities have accept Thai - nationals, following their (virtually operating their own ed this position. In order to arrest entry into the gem business, began Central Bank) which ran into mil this trend, the measures adopted to take up residence in the gem lions each d4y has never been consi by the government in the early areas and carry on their business dered Seriously. This was the situa 1970's by way of introducing tax on the spot, they came to operate tion that existed during the five relief and the FEEC system, and the generally in close contact with the years the Thai nation$ls were in inauguration of gem auctions by people living in those areas. This operation in Sri Lanka, and it is the present government; have both led those people to be dependent hard to believe that the State Gem not helped to arrest the situation. on the Thais to some extent. 'Corporation was not aware of This exercise of illegal export these illegal operations or was help of gems is well organized just as Leading .Sinhala and Muslim less to act. the internationally organized smug- businessmen in the country describ ling of goods to and from countries ed very strongly how the presence of. Thai nationals resulted in an According to most respondents or the trafficking in narcotics erosion of national wealth and the exists today. This operation of in this area the State Gem Corpora consequent loss of foreign exchange ' smuggling gems which is carried on tion was aware of the fact that the to the country, along with accom with the support of powerful gems bought by the Thai nationals panying degeneration in the sphere groups, of people, came out into were being illegally, smuggled out of of our culture. It was further the country. Yet. for five years the open only when the Thai alleged that while they were in the they had not taken any steps -to nationals were - also trying to act of robbing our national wealth, arrest this trend. make use of the opportunity. It they as a group df people with Full responsibility for illegal is also not possible to say that extremely loose morals have ex exports of gems should not be along with the Thai nationals, posed the youth of those areas to ECONOMIC REVIEW APRIL,'85 Topaz Gems of Sri Lanka dish hue. There are colour combinations of yellow red and a tinge of pink. Apart from the above colours, parti-coloured - Occurs mainly as clear transparent Sri Lanka has a wide variety of stones are common. water worn pebbles. Pate yellow, dark gems andit isaunique phenomenon that practically all these varieties could be yellow and colourless stones occur more Asteriated or Star Corrundums found in the same gem vein. There are abundantly while saffron and light display six rayed stars when cut en however, certain areas which are well green shades are rare. cabochon. It does not have facets but known for different varieties. While all Beryl is round or oval in shape or with double varieties of gems are found, in the Rat convex faces. The maximum effect of napura district alexandrites and cats Composed of silicate of alumi- the star-is produced when the stone is eyes are mostly found in the south west nimum and berylium. Absolutely pure cut with the centre of the curved surface region in Oeniyaya, Morawaka and beryl should be colourless but different lying in the axis of the crystal and is Hiniduma, whereas Elahera is well colouring elements such as chromium best seen when observed under a direct known for blue sapphires and garnets. and iron give it varying shades. Emerald single source of light. The star pheno the most important of the beryl variety Corrundoum menon is purely a reflection effect has not been found in Sri Lanka, though caused by microscopic needly lime min aquamarine a beryl variety is available in eral inclusions or minute cylindrical The most, important gem stone colours of greenish blue and pale green. cavities, either of which are arranged . in Sri Lanka and the blue sppphire of in a regular pattern. The rays of the this variety accounts for normally 60 Garnets stars may be narrow and sharply defined per cent of its exports. Corrundum in strong colour against the background These are very common in. Sri crystalises in the hexagonal system and colour of thestone. Star stones are avail Lanka and quite a number of elements its main chemical component is alu able both in the ruby and the blue go into the composition of tne stone minium oxide. However, various im sapphire varieties. A milky white grey replacing each other without affecting purities singly or in combination give and smoky colours are quite common. it different colours. Shades of yellow, the crystal formation under the cubic blue and green in corrundum are often system. There is generally, & uniform caused by the presence of Iron while distribution of colour in the garnet. The chromium gives it a red colour. Manga Cats Eyes transparency varies from clear to the nese makes it purple in colour while turbid. • Titanium make it blue in colour. Colours This is a fibrous variety of chry- Tourmaline ' could range from pale and light to deep, sobery containing needle like minerals and the distribution Is invariably patchy in the structure or cavities created in a It is silicate but has a complex particular fashion. When these stones and rarely uniform. and variable chemical composition. This are cut en cabochon a silvery streak of has resulted in its physical properties light is displayed resembling the pupil Blue-Corrondurn differing according to its chemical com of a cat's eye; The silvery line or streak y position. Various colours are available, of light shows up against the background Commonly known as the sapphire while the most common in Sri Lanka is of a body colour of the stone. Stones occurs In different degrees of trans the green tourmaline; blue, orange, are available In milk white, bluish or parency. Flawless transparent stones are brown stones too are quite common. greenish white or yellowish brown rare. Colours could range from pale and colours. Zircon ° tight blue to greenish and deep blue with irregular colour patches. Is combination Of siliza zirconium Ruby Alexandrite with a minute element of uranium. Zir cons ere found in numerous shades i This gem stone was named after such as brownish yel ow, golden yellow, Another stone of the corrundum Czar Alezander II of Russia on whose reddish yellow, green, deep orange, variety receives its red colour from chro birthday it was found in the Ural moun brown, sky blue and violet. mium oxkte. Most of the rubies found to tains. Its colour varies from dark grass as pink sapphires. The deep red or green, emerald green to bluish green 'pigeon blood' are rarely found in Sri Moonstones and contains a small percentage of Lanka. chromic oxide. Some stones show the Belong to the feldspar family and YeUow-Corrundum natural colours in day light which two varieties occur in Sri Lanka, e.g. changes to raspberry red or violet stones that reflect only a milky light Available from pale yellow to deep under artificial light. and the stone that reflects a bluish milky golden yellow. Large stones have been light. These stones are translucent and found in certain areas. Yellow sapphires Spinel are cut en cabochon. are fairly common. These occur usually along with Many other stones are available corrundum and are found in abundance. such andalusite, sinhalite, diopside, their The colours here are pale to dark blue, colours varying from pale yellow, green Another colour variation of the. and shades of mauve and purple. Blue and brown to shades of violet and blue. corrundum, the more valuable stones spinels are also fairly common in Sri Source : Central Bank News • have a deep orange colour with a red- Lanka. Survey, December, J983. 12 ECONOMIC REVIEW APRIL '85 corruption and immorality and stated that he was prepared . to Further information that wc they were alleged to have even spend even several million rupees were able to gather was thai I he introduced Thai women for im to chase these Thais out of the presence of Thai nationals in the moral purposes in this country. country. gem business had caused a consi It is said that while the habits of In the attempt to find out how derable dent in the income levels taking narcotics and viewing video far the Thais were instrumental of leading local gem businessmen. blue films were spread among the in introducing immorality into This has been most severely felt young girls and boys of the area these geographical areas, we were in the Beruwala area and in Colom through the medium of these Thai not able to find any evidence in bo to a lesser extent. nationals, school children playing support of such a proposition. truant were in the habit of digging However, it is not denied that Finally, it could be pointed out into heaps of earth in search of those areas were completely devoid that the Thai nationals did a big tiny pieces, of gems which they of immorality which is generally service to this country by creat sold to these Thai nationals. 'not unusual in areas in which an ing a market for such precious excess of money is in circula wealth which had not been iden An effort was made to verify tion. . tified in the Sri Lankan economy the truth of the allegations regard- until they did so with their entry The charges leveled against the • in the erosion in. the national into the gem industry. Also, as a Thai nationals by our front line wealth caused by the intervention - result, there had appeared a new gem merchants were subjected to of Thai nationals and this was to awakening in the gem mining areas. scrutiny by us. Apart from their a large extent established. It is clear Though it is the duty of the govern engagement in the illegal gem that a well organized plan is in ment and others in a position to do business, there was no substantial operation within the gem industry so to take steps to arrest all illegal that leads to a drain out of a consi evidence in proof of their involve activities carried on by the Thai derable amount of income through ment in vices and other corrupt nationals, the outcome should not the illegal sale of gems. It is dif practices. With the exception of have been to cause undue hardships ficult to detail how this system is one Thai national being punished to tons of thousands of our people.. operated but it is very clear that a by court for misbehaving with local If the Thai nationals robbed our very powerful group of persons women at Ratnapura, there was no national wealth not mere adminis is behind all these operations. other record of a smiliar nature; trative action but legal steps should Therefore it should be the duty and even these front-line business-' have been taken to stop this activi of those who are in. positions of men failed to provide us with ex ty and there would have' been no power and responsibility to take amples of such instances of mis dispute over their expulsion from steps to jjivert these monies to the conduct. the' country on such findings. But, country's resources, through lawful immediate steps should have simul On the other hand several sales and exports. However, it has taneously been taken to ensure the people in these areas, said that the to be ascertained how far these big continuance of economic prosperi Thais were Buddhists and while businessmen who arc all repeating ty that had been brought to those they contributed lavishly to places their opposition to the presence areas by the Thai nationals. A of Buddhist worship in the area, of Thai nationals like parrots, in decision in M his'' area should not they were often absorbed in medi an identical language, are truly hive been dependent on the whims tation too in the evenings. On in nationalist and patriotic people. It and fancies and interests of a few quiry from tourist hotels in these would be very useful if the values businessmen but determined by areas, we were informed that there of their total ammual purchases consideration of the day-to-day were hardly any instances of Thai life of the tens of thousands of of gems could be compared with nationals using these hotels for any the total value of the gems they people living in those gem mining nefarious activities. Therefore, it is areas. have legally exported and also if difficult to believe whether there the extent to which their disclo is any truth in these references to sures of income from the sale of vices purpoted to have been resort Smuggling gems are accurate and could be ed to by the Thais. Perhaps, it may ascertained. It could' then be be true that some of them were The illegal operation of the •gem trade is well backed by some seen whether their opposition to engaged in such activities, but it powerful groups. It is very well the Thais stems from their love for could not be deduced that this organized, with fees' charged, this country. One leading gem trad had any noticable impact on the depending on the value of tlie er in Colombo is reported to have local culture in the area. ' gems to be smuggled out and ECONOMIC REVIEW APRIL '85 Table 8 Profit Position in some Bank Branches in Ratnapura District from 1978 - 1983 Bank Branch 1976 1977 1978 1979 1980 1981 1982 1983 1. Ratnapura 282,114 301,986 706,830 1,001,905 2,263,901 2,017,566 3,213,641 2,518,990 2. Rakwana 454 73,054 135,362 23.219 - - 2,599 87,484 3. Kahawatta 41,856 114,312 385,225 442,083 118,368 184,717 547,110 856,678 4. Kalawana - • - - - - 139,200 234,104 5. Ehaliyagoda 91,694 93,436 290,948 65.222 424,857 777,664 1,060,632 610335 6. Pelmadulla 33,972 44,532 157,482 170.343 131,952 267,122 401,979 414,639 7. Mivitigala - 19.633 79,742 347.129 104,528 the place at which they wished ported by the Corporation there the gem export trade consequent them to be delivered. In addition appears to be no record of any such to, entry of Thai nationals. Consi the smugglers undertook the res transactions and it could therefore dering the manner in which the ponsibility for both safety, and be concluded that transactions by Thais were engaged in the pur delivery of gems at the appointed Thai nationals in a large amount of chase of gems during the past two time and place. Thus a Thai na these stones could have in fact years a significant change in the tional simply handed over a parcel taken place illegally. Table 2 high earnings from gem exports should containing gems to this organiza lights the figures of gems exported have been recorded. On the other tion and invariably it was fourid by the State Gem Corporation and hand, the gem export figures for awaiting him at home on his private sector during the past few 1982 indicate a decrease of 37.3 return. Generally the arrangement years. percent (the year when the largest was . that the parcel would be Thus, although the private number of Thai business were smuggled out on the same air sector recorded a gradual increase operating here). craft in which its owner was also in the value of exports, it appears travelling. Sometimes they were to be merely maintaining the aver This situation could be fur transported in high powered motor age increase recorded from the ther observed in the statistics boats away from Sri Lanka, and beginning. However, the figures do reflecting the exports of gems only to Thailand. (See table 9) these are instances of the appre not reflect a significant change in hending of such, boats. A capture of one such motor boat off Trinco- Table 9 malcc harbour with a large quanti ty of geudas is a clear example of Value of Sri Lanka Gems Exported toThailan d how this channel is used. (in Rs.Mii) Cash required by Thai nation als to purchase gems was obtained Year S.G.C Private Sector Total mostly from Indian based traders living in Colombo. In return, the 1978 - 1.2 1.2 Indian traders were paid in Thai land in foreign currency which is 1979 - 0.4 0.4 never channelled back to Sri Lanka as foreign exchange. According to 1980 - 14.9 14.9 the source their monies are some times utilized for other illegal 1981 0.7 38.2 38.9 activities as well. When questioned, 1982 4.6 9.4 14.0 the state Gem Corporation did not make any comment in this regard but from an examination of Source : Slate tiem Corporation the quantity and value of gems ex 14 ECONOMIC REVIEW APRIL '85 Table 10 Attempted Smuggler Seized by Sri Lankan Customs Authorities Date Nationality Articles Value Order Penalty Rs. Rs. 30.01.80 Thai 40 Pes. Uncut 1.500/- Forfeit 2,000/- stones 27.02.80 Thai Precious Stones 20,150/- Forfeh. 58,000/- 03.80 India Gems 25.000/- Forfeit 10.000/- 08.04:80 Thai 13 Pes. Uncut 80,000/- Forfeit 249,000/- stone 20.05.80 Pakistan Perls 49,725/- Forfeit 146.176A 03.06.80 U.S.A. Rough Corundum 3,000/- Forfeit No. 323 carats 16.07.80 Thai 5940 carats 594,000/- Forfeit 1,885^45/' Fancy Sapphires 21.07 JO West German Gems 223.124/- Forfeit No. (Foreign orig gems releasee 24.08.80 Thai 27 Uncut Stones 38,000/- Forfeit 26.000/- * 17.09 JO Sri Lankan Precious Stones 51,721/- Forfeit 156,263/- 08.10.80 Sw Lankan 8.02 carats 1,500/- Forfeit 3.000/- Cats Eye 10.12.80 Thai Uncut Stones 119,856/- Forfeit 30.000/- TOTAL FOR 1980 1.207,576/- 05.10.81 Sri Lankan Gems 9,537/- Forfeit 25.02.81 Thai 810 Carets 50,000/- Forfeit 20.000/- Ruff Corundum 06.03.81 Thai Gems 55,872/- Forfeit 25J)00/- 17.05.81 Thai Uncut Stones 1,290,500/- Forfeit 100,000/- 28.07.81 Indian 351 Carats 35,700/- Forfeit 2.000/- Indian Ruby t 01.08.81 Thai Semi-Precious 36,309/- Forfeit 10,000/- Stones 08.08.81 Singapore Gems 29,142/- Forfeit 10,000/- 28.08.81 Thai 9 Uncut Stones 6.232/- Forfeit 2,000/- 11.09.81 Thai .. Gems 77,586/- Released 7,000/- 01.11.81 Sri Lankan Gems 128.746/- Realeased 26,000/- TOTAL FOR 1981 1,719,624/- ECONOMIC REVIEW APRIL '85 01.01.82 Sri Lankan 3 Ivory Elephants 14,000/- Forfeit 2,000/- 18.01.82 Sri Lankan Semi-Precious 2,100/- Forfeit 1,000/- Stones 26.01.82 Norwegien Diamond 40,000/- Forfeit 10,0007- 13.01.82 Sri Lankan Gems 4,125/- Forfeit No. 22.02.82 Sri Lankan Semi-Precious 3,711/- Forfeit 2,000/- Stones 07.04.82 Singapore Semi-Precious 25,016/- Gems Released 10,0007- Stones 07.04.82 Singapore Semi-Precious 38,062/- Gems Released 6,000/- Stones 03.05.82 Australian Gems 6,210/- Forfeit 2,0007- 02.10.82 Indian Indian Gems 62.800/- Forfelt 2,000/- (Important) t 14.11.82* 3 Thais 150 Kgs. Geuda 1.291,000/- Realeased No penalty (Well known (Raided in a handed over Island to Sri Lankan) house) revenue. -Pakistan Gems 8,537/- forfait 853.72 Carats 12.11.82 Sri Lankan 15 lots of 283.846/- Forfeit 11,655/- Spinnels TOTAL FOR 1982 1,779,407/- 15.02.83 Sri Lankan 80 Semi-Precious 1,750/- Forfeit 2.0O0/- Stones 10.03.83 Sri Lankan Silver Jewellery 1,790/- Forfeit1 Warned Studedwith Gems 10.04.83 Sri Lankan 8 Pendent studed 1,000/- Forfeit 1,000/- with blue sapphire 15.04.83 Pakistan Ruby chips 93.5 grams 35,062/- Forfeit 20,0007- 21.05.83 Thai national Geuda 177% lbs. 302,000/- Forfeit 95,000/- 23.05.83 Sri Lankan 110 carats moonstones 14,475/- Forfeit 2,000/- 25.05.83 Sri Lankan 9 Silver rings studed Forfeit with cats eye 13.07.83 Sri Lankan 81 Pes. Gems 70,776/- Forfeit 50,000/- 16.07.83 Sri Lankan Diamonds & Gold 238.110/- Released on i 37,000/- Jewellery penalty . 18.09.83 Thai national 4 Blue Sapphires 71,445/- Forfeit 42,071/- 12 Geudas 20.09.83 U.S.A. Precious Stones 89.400/- Forfeit 2,000/- Jewellery TOTAL FOR 1982 825.808/- ECONOMIC REVIEW APRIL 85' 18.02.84 Sri Lankan 12 Kg. Geuda 150.000/- Forfeit 450,000/- (Air Lanka Labour) 07.06.84 Sri Lankan Garnets and Ivory 51.450/- Forfeit 10,000/- Elephants 15.06.84 Sri Lankan 48 Pes. Diamond 4o',002/- Forfeit 120,007/- 05.07.84 Sri Lankan Precious Stones 246,850/- Forfeit 5.000/- Gems & Jewellery 01.10.84 Thai national 15 Kgs. Geuda 50,000/- Forfeit 2,000/- 06.10.84 Sri Lankan Semi-Precious 27.725/- Forfeit' 2,000/- 11.11.84 Australian -' Gems Stones 113,300/- Forfeit '20,000/- TOTAL FOR 1984 679,327/- sssesBtszs GRAND TOTAL 6,211,742/- SSSSSOSSB Source : Sri Lanka Customs State Gem Corporation in action The figures given here • in gem -trade during the particular However, the-Corporation was relation to the private sector year, the decline indicates that a finally of the view that, since the exports, are often inclusive of the considerable amount of gems had practice of converting geudas into exports made to Thailand by Sri gone out of this country through blue sapphires had been perfected Lankan businessmen as well. Taking illegal channels. in Bangkok, the demand for gen the year 1978 as the year in which When the question was asked uine local blue sapphires had begun a steady flow of gems between why the State Gem Corporation to drop sharply and it could notbe Sri Lanka and Thailand had begun, could not arrest this ignominious silent any more;.therefore for the it may be observed that the Thai trend at the very outset without first time it was forced to focus .its letting it get out of hand, we were nationals who gradually made an attention on this danger to the local informed that officials firstly had entry to Sri Lanka, appear to have industry. By this time, a large to think of the international impli been initially operating their gem number of international gem busi cations; and secondly, to consider trade through legal means. This nessmen who were in the habit of the plight of the gemmers, the small could be the reason for the trading with Sri Lanka, had already gem traders and technicians too, gradual rise in export earnings upto begun to shift the focus of their who were benefitting from the 1981. However, though it was trade to Bangkok. Another reason, increased level of business. If it established that there were sales why the Corporation did earlier was necessary, the State Gem in 1982 equal to that in 1981 turn a blind eye to this problem Corporation could have rounded up it does not appear that any of those was that it did not bother to be all these Thai nationals and taken gems had moved out of the country interested in Thai nationals whe away all the gems held by. them legally nor had such exports been were at the time busy buying only without- a valid permit. 'Any person recorded in the figures of exports the geudas. But, subsequently once who wished to engage in the.gem to Thailand. (Table 9) they moved on to the area of buy business needed a valid permit foi ing more valuable gems as well the Though the figures for exports the purpose, which should firstly Corporation had to move in. If. . in 1981 show an increase of 161.1 have been obtained from the . Thai nationals, were allowed to percent over the figures for 1980, Corporation; and the gems could .continue to buy the low quality the year 1982 records a steep de have been purchased only against gems or semi-precious stones (listed cline. In other words, the value of such a permit. But, none of the earlier), it would have caused hard exports in 1982'had gone back to Thai' nationals held such permits. ships to the local gem businessmen below 1980 levels. Export values Since the Corporation did not take who were authorised by the Corp- recorded a' decrease of 164.4 any steps on this problem till mid poration to trade in gems; this percent for the year' 198? compar 1983 there was sufficient room trend could not have been allowed ed to 1981. Considering the num for a proliferation of illegal activi to continue. ber of Thai nationals gngaged in the ties in the gem industry. 1 ECONOMIC REVIEW APRIL '85 In the meantime, the local leading gem businessmen who were severly affected by the intrusion of Thai nationals, began to ques tion the Corporation as to why it did not take steps to prevent the continuation of this state of affairs. These complaints reached as far as the highest echelons of the ad ministration and the Corporation eventually had to take action on this matter. Accordingly, one day in May 1983 the Corporation officials raided all the business centres occupied by the Thai nationals resident in Ratnapura. In this operation, the Corporation was able to seize a large quantity of local and foreign currency, gem processing machinery and a large number of cut and uncut gems of high value. The geudas seized dur ing the raid were valued at millions of rupees though they would have originally cost the Thais only a few thousand rupees. This business of buying geudas at a low price and converting them into blue sapphires was contribut ing to tjis| drop in the value of gen uine blue sapphires in the inter A Gem Pit in Ratnapura area national market. Thus, the govern ment enforced a regulation with mining areas as well as the whole all illegal activities whether they immediate effect limiting the validi gem trade in Sri Lanka. are carried on by Thais or any ty of the visas of these Thai nation other persons. In the case of Gem als to only 7 days the result was The 'black market' and under trade in particular any such mea that the Thai gem businessmen ground illegal business activities in sures should not have been the resident both in Ratnapura and the gem trade were resorted to by cause of undue hardships for thou Colombo left the country. the Thai traders, although such sands of people in the gemming practices prevailed from the incep areas. If there were any attempts tion of the modern gem industry. to rob the national wealth not mere Conclusion What the Thai traders did was to administrative action but legal steps further exploit this facility. The should have been taken to curb As stated at the outset, the blame for the loss of Sri Lanka's such trends; but the decisions in effects of the entry of Thai nation wealth should not therefore be laid this area should not have been als into Sri Lanka's gem trade and directly on only the Thais. To them dependent on the whims and fan industry were in some ways adverse must be granted the credit for cies and interests of a few business and in other.beneficial. having provided the opportunity men. to bring such activities into the Another important result that For several people in the gem open. Some sections even concede mining areas of Ratnapura district has emerged from this entire issue that the Thais have performed a the participation of Thai nationals is that it has been realised that great service for the country which in Sri Lanka's gem business was a Sri Lankans must do their own had not been done by any Sri windfall, as the Thai's brought into treatment of geudas and the autho Lankans. prominance a vital resource which rities were compelled to get down was hiterto hardly known in most It has been further argued that to this task with a greater urgency quarters in Sri Lanka. There now it is the duty of the government and today we have in Sri Lanka a seemed to be a new awakening and other related institutions of the public/private owned company now among the people of these gem country to take steps to arrest processing geudas. w (. S 18 ECONOMIC REVIEW (APRIL 85