The United Arab Emirates is rapidly becoming a force in trade of another highly valuable commodity, diamonds.
In the first half of 2011 Dubai traded $25.3bn, a 55 percent increase from the same period a year earlier. Much or most of the rise was due to surging diamond prices rather than growing volumes but the increase nevertheless underlined Dubai's success in competing with other trading centres. In the last 20 years, the diamond trade has become more diverse, but the authorities in Antwerp are not accepting.
Africans have no chance of setting up offices there. The Indian and Lebanese communities have seen a bit of hostility when it came to Antwerp. A major obstacle keeping Dubai from becoming one of the world's top three hubs, according to Mitesh Surti of Antwerp-based diamond seller Beyroha, is local banks' lack of expertise in the diamond industry. Diamond traders have had difficulty setting up accounts with services catering to the industry, such as overdraft facilities, he said.
The UAE has competed with traditional diamond centres by keeping customs duties for diamond jewellery as low as 1 percent, a tiny fee compared to major diamond producer Russia's 23 percent duty and 18 percent value added tax.
"Because of these duties, jewellery and imported watches in the Ukraine, Russia and Kazakhstan cost double their price in Dubai, or are at least 50 percent more expensive," famous jeweler Artsinovich said.
