The diamond business has fascinated me ever since the 1980s when my future wife and I spent months shopping for diamonds because it is so different from the way companies I was familiar with, such as Procter & Gamble or Walmart, did business. (Even leaving aside the whole “Why not get a cubic zirconia?” question.) We finally kept going back to a guy with a tiny shop in Chicago`s Loop who kept promising us that he was going to go to Antwerp and get us a really good deal. Finally, after a few weeks of not hearing from him, he called me up and told me he had the perfect stone. And he did.
“So, you got this in Antwerp?” I said. He looked at me like I was crazy. “I`ve never been to Antwerp in my life.” Afterwards, I figured he`d probably bought it off a mugger.
Antwerp`s Diamond Business
Jews Surrender Gem Trade to Indians
By Erich Wiedemann in Antwerp
The Belgian city of Antwerp has the largest diamond market in the world. Orthodox Jews controlled the trade for centuries, but now globalization has seen them displaced by dealers hailing from India.
When Jumi Hoffmann, co-owner of “Hoffi`s Take Away” in Antwerp`s Lange Kievit street, thinks of the future the Belgian city`s Jewish community is facing, he doesn`t know whether to laugh or cry. He`s glad his town is home to the largest orthodox Jewish community in Europe, but he`s also worried sick that most of his 20,000 brethren could be drifting into poverty.
“The Yiddish mensch is losing his bread,” Hoffmann says. What he means is that Jewish traders have lost their central position in Antwerp`s diamond business. They control only a quarter of the turnover made; it used to be 70 percent. … Twenty years ago, some 30,000 orthodox Jews made a living polishing diamonds near the exchange in Hovenier street — 10 times as many as there are today. …
Agreements are sealed with a handshake, accompanied by an old religious well-wish: masl un broche — happiness and blessing. The South Asians use the expression too. But Yiddish is slowly losing its status as the main language of the exchange. English does the job just as well.
The High Diamond Council, the trade`s main governing body, has only recently caught up with the times. Earlier this month Indians won five of the six elected seats on the 11-member board. Indians already account for â‚¬15 billion ($19 billion) of the annual diamond trade of a total of â‚¬23 billion.
While competition between them is harsh, the Jews and the Indians — most of them belonging to the Jain faith — have a friendly, neighborlike relationship. There are even some Jewish-Indian married couples in Antwerp. “Judaism and our Jainisim have a number of similarities,” diamond dealer Ramesh Mehta explains. Like Jews, he says followers of Jainism are used to working hard and they reject every form of violence.
More importantly, both Jews and Indians are used to thinking and acting globally. They also know that they can rely on one another. Far be it from an Indian trader to ask for a receipt when he gives a Jewish colleague a bag of jewels for safekeeping overnight.
Most Indian traders are from the Gujarat region, the center of the Indian diamond trade. They`re modest people, who mostly are vegetarian. But when the occasion demands it, they have no problem putting their wealth on show.
Last year, diamond dealer Vijay Shah organized a combined marriage feast for his son and his daughter — it would have been worthy of a royal family. Insiders estimate he spent â‚¬14 million on the bast. And the cricket games arranged every year by one of the large Indian families see each clan trying to outdo the others in terms of pomp and luxury.
But take a look at the Jewish quarter behind Antwerp`s Central Station and you can tell it`s seen better days. …
Fear of militant Islam and of political shifts in the world of diamond trading has had a bizarre effect on Antwerp`s political scene. A growing minority of Antwerp Jews sympathizes with Vlaams Belang (or Flemish Interest and formerly known as Vlaams Blok), the most successful extreme right-wing party in Europe, which has held the largest number of seats in the regional parliament of Flanders ever since the 2004 elections. Despite being pro-Flemish and xenophobic, Vlaams Belang presents itself as markedly pro-Israel and demands stronger action be taken against those Moroccan immigrants in Belgium who openly display their contempt for Jews. …
Antwerp`s Jewish community has fiercely defended its monopoly on the actual craftsmanship involved in the diamond trade. The most precious diamonds are still polished in traditional Jewish workshops. “The reason isn`t that we have good connections, as many people say,” claims Moshe Weiss, the doyen of the trade. “It`s that we`re better than everyone else.” …
Jahwery comes from the city of Palanpur in Gujarat, where his great grandfather still polished diamonds on a pedal-driven wheel. Many of the great diamond dealers of Antwerp have roots in Palanpur: the Mehtas, the Shahs, the Jahwerys. They came to Antwerp in the 1970s and 1980s, attracted by the enormous profits possible there, and also by Belgium`s liberal immigration laws. Since diamond dealers tend to marry among each other, most of the 300 Indian families of Antwerp are related.
A business largely controlled by your own family is always far superior to competitors, Jahwery says.
The secret to the diamond business is arranged marriages and the threat of ostracism, as dawned on me while having the diamond ring appraised to make sure the retailer hadn`t cheated me. The appraiser on Wabash spent about 20 minutes squinting at it through a microscope before telling me about its microscopic flaws.
That`s a big transaction cost. It`s much more efficient to be able to trust somebody you are doing business with when he tells you orally that the diamond is flawless. But how do you trust him? Because if he gets a reputation for cheating his relatives, his children will never find spouses.
The other diamond dealers from Gujarat would probably agree. They rely on their worldwide family networks to build and maintain headquarters on every continent. That`s what distinguishes them from the Jewish businesses that used to dominate the market. The Indian clans are true global players.
If you grow up in, say, Pacific Palisades, you probably aren`t as willing to head off for the next gold rush on the other side of the world as if you grew up in Gujarat. Pacific Palisades, where, say, Steven Spielberg lives, is kind of the end of the line. Spielberg is probably not going to dispatch his children to the far ends of the world like a 21st Century Mayer Rothschild to build his empire.
Ashwin Jahwery has branches in Taiwan, Thailand, China, Australia, Great Britain and Spain, all of them run by his nephews. His two sons are still studying at Antwerp University. One of them is studying business and the other diamond polishing. They already have positions waiting for them in their father`s diamond trade empire.
And unlike the Jewish community, the Indians aren`t sentimental about Antwerp. They lead a pleasant life there and earn well, but they could leave anytime.
A good businessman has to be flexible, Jahwery says — and that flexibility has to be thought of in global terms. What he says amounts to a threat. “If the Belgian government creates problems for us,” he says, “then Antwerp has no future as a business location. The things I need to get started somewhere else in the world fit inside two suitcases.”
Some of his compatriots have already followed the call of one of the diamond trade`s rising new locations and moved to Dubai. Diamond dealers in Antwerp feel harassed by a number of new regulations introduced by the Belgian government in order to combat the trade in so-called “blood diamonds.” Antwerp not only has the largest regular market for diamonds in the world; it also has the largest black market. It`s here that dictators and rebels sell the diamonds by which they finance their devastating civil wars.
The price of a diamond is determined on the basis of the four Cs: cut, color, clarity and carats. The High Diamond Council, which has also developed a code of conduct for its members, has added a fifth C: confidence.
It was a nice gesture, but it hasn`t made a difference in practical terms. People at the jewelry shops near the Central Station don`t ask for a certificate when someone offers them a bag of raw diamonds.
The High Council claims the problem is under control — but that`s wishful thinking, not a reality. There`s no way to effectively control the import and export of diamonds — for the simple reason that they`re so small. And a pocketful of jewels is enough to allow an African warlord to buy enough Kalashnikovs for a whole army.
When Antwerp`s diamond market was still controlled by Jewish families, the cartel relied on self-control. But those times are over.
This all raises questions about what Ibn Khaldun called asabiya. Do other Indians care about the welfare of Jains the way late 19th Century Reform Jews in Germany cared about Oriental and Sephardic Jews in the Ottoman Empire — enough to start organizing pan-Jewish pressure groups? How much pan-Indian ethnonationalism is there among Indians? Or is India just too big?
And, in the future, how much ethnonationalism will there still be among Jews? To build Jewish national power in the late 19th Century, modernized Jews had to swallow their distaste for old-fashioned Jews for the good of ethnic solidarity. Can that pan-Jewish solidarity hold together when Jews are no longer the underdog? Obviously, a lot of money is currently being poured into that project (see below).
But, I was struck while reading Michael Chabon`s 2007 alternative history bestseller, The Yiddish Policeman`s Union, that the book is pretty dull until the villains in black hats are finally introduced. And the villains are literally in black hats: they`re ultra-Orthodox men who wear black hats. The book takes wing when Chabon — who is quite representative of mainstream modern American Jewish ethnocentric sentiments (The Amazing Adventures of Kavalier & Clay) – gets to indulge his fine, fierce hatred of ultra-Orthodox Jews. Sure, there are a few pages about how much his Yiddish policemen heroes despise American Republican goyim, but Chabon`s heroes really, really hate the black hats.
Chabon is a 21st Century Jew — all that 20th Century Jewish teamplay might be falling apart.