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.