Page 10 - bne IntelliNews monthly magazine October 2024

10 I Companies & Markets bne October 2024
“With our agreement ... we are enabling people with
great talents to enter our country. Also, we committed to un-bureaucratic processes so that those who cannot stay in our country must go back,” Scholz wrote on his X channel.
For Scholz, the agreement shows that his embattled Social Democrat-led government is addressing the migration issue at home. Simmering dissatisfaction with the government’s handling of migration has caused an erosion of popular support for his coalition and was widely cited as a major factor in the strong performance of the far-right Alternative for Germany (AfD) Party in recent state elections.
The deal is also a win for Mirziyoyev, whose administration is trying to shift Uzbekistan’s economic orientation from being mainly a producer of raw materials to a manufacturer of finished goods. As part of the overhaul, the government is attempting to reorganise the country’s labour market, in particular labour migration, by creating more opportunities for skilled workers abroad.
By extension, the German-Uzbek agreement can potentially benefit the militant Taliban leadership in Kabul, which, since regaining power in 2021, has sought to gain international recognition of its rule. Tashkent, of late, has sought to engage the Taliban, aiming to stabilise conditions along Uzbekistan’s southern border, as well as gain some say over the completion and operation of the controversial Qosh-Tepa canal project. As part of its engagement drive, Uzbekistan has agreed to process comparatively small amounts of Afghan crude oil
to help meet domestic needs in Afghanistan. The Uzbek government also recently agreed on a investment deal worth potentially up to $2.5bn with the Taliban.
If the Taliban accepts the return of Afghan nationals sent from Germany to Uzbekistan, the militant movement would demonstrate that it can act as a responsible international actor, potentially helping its efforts to legitimise its rule.
This article first appeared on Eurasianet.
Have lab-grown diamonds changed the diamond industry forever?
Richard Chetwode in London
Kodak never saw it coming either. Since early 2022,
the price of polished natural diamonds has fallen approximately 40% and the industry is being buffeted by negative economic headwinds, an excess of mine supply and too much stock in the cutting centres. However, there is one statistic that cannot be ignored: around 50%
of Diamond Engagement Rings purchased in the United States now contain a Lab Grown Diamond (LGD). Is this just another cyclical downturn or are we in the middle of a major structural change?
Diamonds were once the preserve of royalty and the uber- wealthy, but the diamond market has evolved over the past 80 years into more of a mass market product with democratisation of the diamond consumer. Since the late 1970s most polished diamonds below 5 carats were priced against the 4 ‘C’s’ (carat, clarity, colour and cut), which led to standardised pricing in the form of polished diamond pricing lists. Up until the turn of the century these lists were primarily available in the wholesale market, but the arrival of internet pricing soon gave the consumer access to that same standardised pricing. In a world where everyone knows the price of everything, branding is the only differentiator. Without a differentiator, commoditised products end up selling for the lowest price.
It was why one of the questions that De Beers tried to answer when it changed its business model 25 years ago was: “How do
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you take a necessity (the diamond) priced like a commodity and market it as a luxury priced like a brand?”
Unfortunately, that question remains unanswered. The industry did create hundreds of so-called ‘brands’; origin, cut, settings, etc; the problem was that very few of them were real “brands”. If something does not sell at a premium, it’s not a brand, and most natural diamonds sell at a discount, yet the more that the industry was unable to achieve a premium,
the more it becomes fixated with talking about the “product” when the luxury world has spent the last 25 years talking about “values”.
The challenge for most jewellers is not making a sale, it is making a reasonable margin. Ask a jeweller what they are selling and if they reply “VS1, G-H colour, loose polished, 1-caraters” then the most relevant word in their business will be “discounting”, because what they are selling is a commoditised version of “crystallised carbon.” There is no differentiator.
The LGD industry realised that to succeed it simply needed to persuade consumers that natural diamonds and LGDs were
the same – “optically, physically and chemically”, but to also position them as “slightly cheaper”. They could then ride on the back of 80 years of De Beers diamond advertising differentiate themselves by claiming that LGDs were “conflict free”.