The truth about diamonds

Diamonds are a girl’s best friend but they’re also fuelling armed conflict in the Central African Republic and other parts of the continent. The sale of diamonds remains controlled by a cartel who refuse to allow the price to dip whenever supply outstrips demand, and none of this shows any sign of changing for the better.


Diamonds are forever

You probably don’t realise that the phrase: “Diamonds are forever” began life as an advertising slogan rather than a universally understood truth about the precious gem stone. Worst that that, the purpose of this advertising wasn’t just to sell the goods but to help a cartel retain control of the market by convincing owners to never part with their precious diamond jewellery. This bit of advertising from ad agency N. W. Ayer & Son helped the De Beers diamond mining cartel retain control of a market they began to flood when diamonds were discovered in South Africa in the late 19th century. To prevent the price of the stone decreasing when supply took a sudden upturn, the cartel took control of the market. Smaller firms who were not part of the group were quickly bought up and closed down so their goods couldn’t ruin the equilibrium that the group had created. At one time they were responsible for 80% of all diamonds being traded. Today, their impact has decreased but they still control 40% of the market.

Blood diamonds

A lot of the bloodshed in the Central African Republic is paid for by the profits from illicit exports of diamonds out of the continent. Places like the Central African Republic continue to earn cash from the sale of diamonds even though the international certification system called the Kimberley Process is in place to stop the trade of blood diamonds across the border. According to the documents held by the administrators for the Kimberley Process, diamond firms in that nation have stockpiled $8 million of diamonds but the truth is that a lot of that stock has found its way out of the nation, and the profits have fuelled conflicts that rage for the control of the state.

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