by Upatissa Hulugalle
There has been a recent article in a newspaper about the handling of the marketing of a precious gem — 650 carat rough blue sapphire. A young reporter without experience of the trade has criticised a leading personality with wrong information and innuendoes and the public lap it up.

Here the chairman of the National Gem and Jewellery Authority is at the butt end. The chairman is one of the most competent men to hold the post. He is typical of the type of well thought of and suitable appointments of able men, and non-politicians made by the President.

Apart from being an Ellawella from Ella-wella which is in the heart of the gem country, he has owned and operated gem pits, he has organized precious stone sales of Japanese buyers.He has been a pioneer in the lapidary industry and a pioneer in heat treating sapphires and has set up a jewellery manufacturing company in collaboration with a Japanese company.

He has now given up his interests in the trade to his assistants and two sons and is using his vast knowledge and experience to guide the gem trade by accepting his present assignment. One can be rest assured that this is being done for no personal gain. Both Tom Ellawella and his wife Nalini are very kind service oriented human beings. The latter was the directress of Sumithrayo, always available to give advice and help to desperate folk, some being drug addicts.

Wise
We now need such a business oriented person advising government on the trade and apparently the government is wise enough to accept his advice. The trade has gone through various phases.

Traditionally the Sinhalese were the miners and the Galle residents, both Muslims, like the Macan Markars and the Thaha Cassims, Salies and Sinhalese like B. P. de Silvas and other Silvas with shops in different parts of the world were the traders. In the early sixties it changed as the high class traders lost out to black exchange dealers. Who were mainly Indian Muslims from Kilakara and Kalapat-nam, two Muslim villages in Kerala and Tamilnadu.

They were money changers who operated in Singapore, Malaysia, Hong Kong and Vietnam. They came into the Sri Lankan scene when the temporary resident permits of Indian traders here were not renewed and they were asked to leave but no permission was given to take their cash or assets back to India.

The Indian Government as a matter policy made it known to them that if they got their assets from Sri Lankan in whatever way, no question will be asked by the inland revenue in India. So the Indian exchange dealers bought precious stones here with the money left by the Indian traders, smuggled them out to Hong Kong sold the stones.

Remitting the proceeds to Dubai they bought gold in Dubai. This gold was smuggled into India, sold and paid to the returnees from Sri Lanka, thus making huge profits.

FEECs
In 1965 the UNP government introduced foreign exchange entitlement certificates and there again gems were used to get these certificates which entitled the exporter to import goods which could make large profits.

In 1977 the economy was opened, imports were freed and a single devalued rate of exchange was introduced and the gem trading would have proceeded in open competition and as it was tax free, the country would have earned a large sum in foreign exchange.

Unfortunately, a central banker, appointed by an earlier minister was the head of the Gem Corporation. I had a friend, a Muslim youngster who had been trading in US who had contacts with heat treaters of sapphires. I suggested he inform the chairman of the Gem Corporation. When he went to see the chairman the central banker said we are not interested in heat treatment, Sri Lanka will only market natural sapphires.

It was at this time that the Thais had discovered that geudas which apparently had no value, once heat treated at 1800 C turned into beautiful blue sapphires which were accepted internationally as genuine blue sapphires. Books on precious stones stated quite clearly that milky sapphires often when heat treated, in reducing conditions, would turn into blue sapphires. Unfortunately, the C. I. S. I. R. should have been reading and researching on this subject which they did not do till much later.

A few years later the chairman realized his mistake and promoted heat treatment by importing furnaces and teaching heat treatment methods. By this time gunny loads of geuda which were gathering dust in gem miners' and cutters' throw away boxes (cutta pettiyas) were taken at throw away prices by the Thais.

Not only did the Thais make billions on the geudas but they got experience in knowing how the different geudas reacted to heat treatment. With the large sums of money made on the heat treated sapphires and their experience they held the monopoly on geudas in Sri Lanka and large numbers were present here and due to their financial strength, our merchants and treaters could not compete.

The Thais at that time were so entrenched in the trade that when a young Chinese Thai wanted to set up a joint venture in Sri Lanka back home in Bangkok, they threatened to bomb his father's establishment.

Head Start
Thailand due to Government policies have a head start on us in the gem trade as they freed the import of gem and gold over thirty years ago. Thus gems are brought in from all parts of the world either in the rough or polished state. It was not difficult for US citizens or overseas Chinese to set up shop there and thus there are several goldsmiths, lapidaries and jewellery manufactures and US dealers. Large US department stone buyers or their suppliers found Thailand a convenient place to get their supplies and US dealers are able to get their rough stones cut or purchase any kind of precious or semi precious stones in Bangkok.

Before their exchange rate crashed, Thai dealers found Sri Lanka cutting cheap and patronised our lapidaries but with the bhat at 50% of the old value they find cutting in Bangkok economical.

The CISIR, The Gem Authority and other private sector folk have now mastered the treatment and quite a few Sri Lankans get good results but may not have the cash to gamble like Thais and a group of gem brokers are sponsoring them.

They call themselves the Blue Sapphire Association and has made representation to Professor Peiris who is also junior Minister of Finance, to give various incentives including a subsidy of 20% on the money the Thais bring to Sri Lanka. The other proposals are to reduce the service charge of the National Gem and Jewellery Authority, to reduce commission charged by the bank, to stop writing numbers of their currency notes, to reduce the minimum on remittances to learn the geuda trade, and several other concessions.

Fortunately we have an experienced business man as the chairman to recommend what is best to the minister. Even the wise Ronnie de Mel did not have the imagination of appointing an experienced person to be chairman and first allowed a central banker and later appointed retired commissioners of Inland Revenue to head the Corporation.

Research
The lack of research being done on our products which have potential is stumbling block to rapid growth and development. There are supposed to be 11,000 scientists in Sri Lanka doing hardly any research.

Recently a B.O.I. company which plans to set up a sophisticated laboratory to do research on ayurveda was accused wrongly exporting by a custom's officer. This is a part of a Japanese group which has invested Rs. 3000 million in Sri Lanka.

The company officers obtained permission from the Ayurveda Department to ship 4114 kilos of Kotala himbutu and done so four times before. Kotala himbutu is available at John Keells Supermarket, Williams Grinding Mills and at Gabo's Lane and from India at the same price. Now the company has shipped from India for their immediate needs.

The custom's officer insists that this comes from the forest. To add insult to injury the officer goes on MTV and makes a frivolous charge and has handed over the kotala himbutu to the forest department which has no clue of its ayurvedic importance.

These consignments were being sent to Japan for research purposes till research facilities are available after the company sets up its laboratory. The Japanese owner is quite positive that any patents on medicines produced will accrue to the Sri Lankan Company. In this case it is unfortunate that there is no one to make a decision on an issue which will contribute in a large way to the economy of Sri Lanka other than two clueless government officials who are negative minded. As the company has resources they are being taken to court.

Matters such as this should be decided by a responsible body like the Ministry of Science and Technology. We lost badly on geudas. Let us hope we will not lose on our ayurveda potential. Wherever possible such negative actions should be noted and practical steps be taken so that such decisions are not repeated.