Wednesday, May 02, 2007

Analysis: Diamond Ban Lifted

The UN Security Council lifted the ban on Liberian stones last week. The Center For Global Development blogs on the Liberia diamond issue today:

This is potentially great news for Liberia. In particular, diamond revenues could be used to fund much-needed post-conflict reconstruction programs and create jobs in a country with an unemployment rate hovering around 85%. However, as my colleague Todd Moss and I have noted, the Kimberley Process can only do so much. And the transition from blood diamonds to “development diamonds” is much harder in a place like Liberia which has a high concentration of alluvial diamonds. Unlike Kimberlite diamonds (which require intensive, centralized operations), alluvial diamonds lend themselves to artisanal, decentralized mining, which leaves the Liberian diamond industry relatively open to smuggling and grey market transactions. This could threaten to rob Liberia of much needed revenues and undermine fragile state institutions.
Thanks again, Sarah.


Anonymous Anonymous said...

Liberia's key export earners were and continue to be iron ore, timber and rubber. While diamonds will bring some revenue and provide a few jobs, the impression I am getting from those who know little about Liberia is that diamond will fund Liberia reconstruction/development needs. This is far from the truth. I think they are confusing Sierra Leone with Liberia.

Unless there is a major diamond reserve that I am unaware of, I think most of those reports are 'stretching' the truth. The lifting of UN-imposed sanctions on diamond export from Liberia is obviously good news, but it is not going to significantly affect the government's revenue intake even if the government were able to prevent smuggling by 100%.

12:24 PM  

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