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Jewelry industry suffering due to lack of regulation

President of the association of expert goldsmiths and jewelers in Lebanon Boghos Kurdian. (The Daily Star/HO)

BEIRUT: The lack of laws to properly regulate the gold manufacturing industry in Lebanon is affecting the quality of jewelry produced and threatening Lebanon’s position in the international jewelry market, an industry expert said.

“The Lebanese gold manufacturers are among the most prominent in the world, but the lack of proper regulations is allowing nonprofessionals to enter the market just to make quick profits,” Boghos Kurdian, president of the Syndicate of Expert Goldsmiths and Jewelers in Lebanon, told The Daily Star in an exclusive interview.

“The entrance of inexperienced people into this huge market is greatly affecting the quality of jewelry produced.”

Kurdian explained that Lebanon’s jewelry manufacturing business used to be run by experienced professionals who had studied the trade properly.

“But this is not the case in Lebanon anymore,” he said, adding that nowadays the market was open to anyone with the financial means who was seeking to make a quick profit.

Kurdian maintained that, in the past, the main job of gold merchants was to sell the products manufactured by industrialists, which is not the case anymore.

“Today, merchants have become very greedy, and they try to make the most profits they can by producing and selling jewelry at the same time,” he said, adding that this weighed heavily on the quality of jewelry manufactured in Lebanon.

“This is driving the highly skilled gold producers out of the market,” he said.

The Lebanese jewelry industry has been known for years for the high quality of its products in addition to creative and innovative designs. Moreover, in the past, wealthy Arab tourists relied mainly on Lebanon for their purchases and spent millions of dollars in the country on jewelry.

However, the security situation that has prevailed in the country for the past couple of years has prompted Arab tourists to replace Lebanon with other destinations for their holidays. This has negatively impacted the sale of jewelry, and gold manufacturers have suffered as a result.

But for Kurdian, the problems that the industry faces are more serious than just the deteriorated security situation.

“The problem lies in the local market itself,” he said.

“When an inexperienced merchant works in this industry, he tends not to pay a fair price to the skilled manufacturer for the pieces produced because he does understand the time and effort that this industrialist invests to come up with a quality product,” he said. “This, of course, encourages manufacturers to minimize their cost by producing lower quality jewelry.”

Kurdian said manufacturers sometimes even take advantage of the merchant’s lack of experience and provide low-quality products at high prices.

Kurdian said that he submitted a draft law to Parliament and the Cabinet in 1998 to give his syndicate the power to regulate and supervise this industry, but the proposal was rejected.

“They rejected it, saying that Lebanon is a free economy and monopoly is not accepted,” he said. “However, what I wanted really was to put in place some rules to organize this industry and prevent inexperienced people from entering it and dragging it down.”

One of the serious problems facing the industry, according to Kurdian, is the lack of restrictions by the government on the imports of jewelry from the Far East.

“Why would the government allow merchants to import jewelry from outside Lebanon when we have highly skilled manufacturers in the country?” he asked.

A report issued by BLOM Bank in 2012 showed that gold was imported to Lebanon both in a finished form, such as necklace chains, and unfinished by packs to be worked upon by local craftsmen. It said that about 32 percent of Lebanon’s imports of gold came from Switzerland.

“We estimate that most of the unfinished gold is imported by packs from Switzerland,” it said. It added that other important sources of gold were the Far East, Egypt and Jordan.

Kurdian proposed a number of solutions to protect the jewelry industry in Lebanon.

“The association must be transformed into an order similar to that of the doctors and lawyers in order to empower it and give it the right to protect the industry,” he said.

Kurdian cited the example of teachers who are fully protected upon retirement.

“They pay a monthly fee to their association, which provides them with protection upon their retirement,” he said.

“The same should be applied for gold manufacturers.”

Kurdian said that there should be laws governing the industry as to who can work in it.

He criticized the technical schools that teach this profession in Lebanon, saying that most of them lack professionalism.

“Technical schools should only be given the right to operate under the supervision of the association after it makes sure that they are well qualified for the job,” he said.

One of the proposed suggestions offered by Kurdian is the organization of an exhibition that includes gold manufacturers instead of only merchants.

“This would promote the work of gold producers and increase the local and foreign demand for their products,” he said.

 
A version of this article appeared in the print edition of The Daily Star on February 12, 2014, on page 5.

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Summary

The lack of laws to properly regulate the gold manufacturing industry in Lebanon is affecting the quality of jewelry produced and threatening Lebanon's position in the international jewelry market, an industry expert said.

Kurdian explained that Lebanon's jewelry manufacturing business used to be run by experienced professionals who had studied the trade properly.

The Lebanese jewelry industry has been known for years for the high quality of its products in addition to creative and innovative designs.

This has negatively impacted the sale of jewelry, and gold manufacturers have suffered as a result.

One of the serious problems facing the industry, according to Kurdian, is the lack of restrictions by the government on the imports of jewelry from the Far East.

Kurdian proposed a number of solutions to protect the jewelry industry in Lebanon.

Kurdian said that there should be laws governing the industry as to who can work in it.


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