By; Panduka Keerthinanda. Attorney-at-Law
Amidst the complex challenges of economic stabilization, a bold and transformative policy proposition is gaining traction among industry leaders and economists: the establishment of a dedicated Gold Regulatory Authority (GRA) coupled with strategic support for the gem and jewellery sector. Proponents argue this is not merely a sectoral tweak, but a visionary strategy to position Sri Lanka as a structured, productive, and transparent hub for precious metals and stones a potential “duty-free speculative market” for South Asia.
The core argument is one of capturing value. Sri Lanka, blessed with world-renowned gemstones and a historically sophisticated jewellery craftsmanship, nonetheless sees a significant portion of its potential export revenue lost to informality, smuggling, and an opaque value chain. A GRA, modelled on successful frameworks in countries like Dubai or Singapore, would aim to formalize, standardize, and monetize this latent wealth.
The proposed authority would be tasked with multiple critical functions:
• Assaying & Hallmarking: Implementing mandatory, internationally recognized standards for gold purity, building trust in ‘Sri Lanka Gold’ as a brand.
• Centralized Trading & Vaulting: Creating secure exchange mechanisms and storage facilities, attracting institutional investors and international traders.
•Combating Illicit Flows: By providing a legal, efficient, and transparent channel for trade, the incentive for smuggling which currently drains foreign exchange and fuels the black market would be drastically reduced.
• Integrating the Gem Industry: Linking certified gemstones into a regulated precious metals ecosystem, enabling the creation of high-value finished jewellery with assured provenance for export.
Transforming Drawbacks into Benefits
Some critics rightly point to the risks: could importing gold freely for re-export spur domestic inflation? Could it facilitate money laundering? The regulatory authority’s design is precisely the answer to these concerns.
A well-designed GRA could creates a financial hub for export-oriented gem and jewellery trade in the south Asian region. For domestic market can be ring-fenced with appropriate duties, while gold destined for the international market or jewellery fabrication for export moves duty-free within a bonded environment. This captures export revenue and foreign investment without flooding the local economy and driving inflation.
The anticipated transformation is multi-faceted. By creating a trusted marketplace, Sri Lanka could attract regional gold trading, hedging, and financing activities. It would incentivize global jewellery brands to set up manufacturing units, leveraging local craftsmanship. The resulting formalization would bring vast unaccounted wealth into the tax net, not through punitive measures, but by offering a superior, legal alternative.
This could be a one of the lowest hanging fruit for economy recovery, the appeal is clear a rapid influx of foreign exchange, high-value job creation in skilled sectors, and enhanced global standing as a financial and trade hub for precious commodities.
Many financial experts says, implementing GRA is precisely the forward- thinking policy.Sri Lanka Gem and Jewellery Association must take necessary steps push this matter. Sri Lanka have the natural resources and the human talent. We need is the institutional architecture to compete with Dubai, Bangkok.This isn’t just about jewellery; it’s about positioning Sri Lanka as a critical node in the global precious commodities network.
Various times many governments has signalled initial interest, with preliminary discussions reportedly held between the Finance Ministry and industry stakeholders. The path forward requires meticulous legislation, robust anti- money laundering protocols, and significant investment in infrastructure and expertise.
As Sri Lanka seeks innovative engines for growth beyond traditional sectors, the glittering potential of a reformed, regulated, and revitalised gem and jewellery industry anchored by a professional Gold Regulatory Authority offers a compelling vision. It promises to transform a heritage of craft into a structured pillar of the national economy, forging a new chapter in the island’s economic story.
This proposition arrives at a critical juncture in the global economy,marked by persistent inflation, geopolitical fragmentation, and supply chain vulnerabilities exacerbated by regional conflicts and climate-related disasters. In such an environment, tangible assets like gold and gems are increasingly sought after as stores of value and portfolio stabilizers. By establishing a robust, regulated platform for precious commodities, Sri Lanka would not only be optimizing its own resources but also positioning itself as a strategic, neutral safe haven for regional wealth. A Sri Lankan Gold Regulatory Authority could offer the stability, security, and transparency that global investors crave amidst worldwide uncertainty, attracting capital precisely because of the volatility elsewhere. This transforms global challenges into a unique opportunity for the island to secure its economic future. (Courtesy, Daily Mirror)
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