Gem reserves could emerge as new foreign exchange asset for Sri Lanka

Sri Lanka could develop gemstones into a strategic foreign exchange asset by establishing a national gem reserve similar to its dollar and gold reserves, while using the initiative to expand imports, value addition and exports, according to Sri Lanka Miners and Dealers Association Director Dr. Sanjeewa Fonseka.

Dr. Fonseka, who is also Chairman of Ceylon Sapphire Mining Ltd and Ceylon FACET and a member of the Ceylon Gem and Jewellery Traders Association (CEJTA), said a structured gem reserve could create a new economic asset for Sri Lanka and strengthen the country’s position in the global gem and jewellery market. He said countries including Thailand and India already maintain gem reserves, while Sri Lanka has a strong natural advantage due to its internationally renowned deposits of rare and high-value gemstones, particularly sapphires. The proposed reserve could be strengthened not only through domestic production but also by importing rough gemstones from major producing countries such as Madagascar. Such imports, he said, could increase the supply available to Sri Lankan traders and manufacturers while creating opportunities to earn additional foreign exchange through cutting, polishing and jewellery manufacturing.

Dr. Fonseka also called for greater access to finance for businesses importing rough gemstones. Financial support for such imports could enable local entrepreneurs to build inventories and increase the volume of gemstones processed and traded through Sri Lanka. He welcomed recent Government efforts to reduce the tax burden on rough gem imports, saying the move had opened greater opportunities for businesses. However, he stressed that further reductions in import taxes and the removal of regulatory barriers would be critical to formalising and expanding the sector.

A more liberal import regime, he said, could help transform Sri Lanka from primarily a source of gemstones into a regional value-addition and trading hub. By importing rough stones, processing them locally and exporting higher-value jewellery and polished gems, Sri Lanka could capture a larger share of the global value chain, generate export revenue, attract investment and create new employment opportunities.

Source: Daily News