The Government says Sri Lanka’s gem and jewellery industry has export potential exceeding US$3 billion and wants to turn Ratnapura into an international trading hub. The stones have been beneath our feet for centuries. The harder task has always been keeping more of their value in Sri Lanka.
Sri Lanka does not have to invent a gem industry.
Nature did that for us.
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For centuries the island’s sapphires and other precious stones have travelled into royal collections, jewellery houses and markets around the world. Ratnapura itself carries the industry in its name and identity, yet Sri Lanka has repeatedly struggled to convert that extraordinary geological inheritance into an export industry remotely approaching its potential.
The Government now believes that potential exceeds US$3 billion in the short term.
Deputy Industry Minister Chathuranga Abeysinghe says the objective is to bring mining, cutting and polishing, jewellery manufacturing, trading, research, universities and technology into a more integrated industry while developing Ratnapura as a major international gem-trading centre.
The ambition is considerable.
Earlier this year, the Export Development Board put 2025 gem and jewellery exports at approximately US$388 million and spoke of reaching US$1.2 billion within five years. The new US$3 billion ambition is therefore not a modest increase but a transformation in the economic scale of the industry.
That immediately raises the question every ambitious Government target should face: how?
Sri Lanka already possesses the stones and the reputation. What it has not always captured is enough of the value added after a stone leaves the ground.
A rough sapphire sold cheaply and subsequently cut, polished, certified, set into jewellery, branded and retailed overseas can acquire vastly greater value before reaching its final customer. The more of that chain which occurs in Sri Lanka, the greater the employment, expertise and export income retained here.
The Government says it is trying to remove obstacles to obtaining rough gemstones needed by local cutters and polishers while addressing legal, tax and financing problems which have discouraged investment. It also wants better traceability, easier import and export procedures and stronger links between scientific research and the commercial industry.
Those are sensible objectives because the industry’s problems have been identified before.
Parliament’s Committee on Public Finance heard earlier this year that the sector suffers from the absence of a long-term national policy, regulatory problems, tax issues, difficulties attracting investment and constraints affecting mining. Industry representatives also called for reform of the National Gem and Jewellery Authority and measures encouraging value-added exports.
The Government has since approved restructuring the Gem and Jewellery Research and Training Institute as a research and training division within the National Gem and Jewellery Authority, arguing that the two bodies had been providing parallel services without a sufficiently unified approach.
There is another uncomfortable part of the gem economy which cannot be ignored.
An industry built around small, extremely valuable objects is particularly susceptible to informal trading and stones leaving the country outside the recorded export system. Every gem exported unofficially is not merely a Customs problem; it makes the official industry appear smaller than it really is and deprives Sri Lanka of part of the economic benefit generated by its own natural resources.
Traceability therefore matters for more than marketing.
International buyers increasingly want confidence about provenance, legality and standards. If Sri Lanka can combine its extraordinary natural reputation with reliable certification, transparent trading and world-class cutting and jewellery manufacture, the words “Ceylon Sapphire” can carry considerably more economic value than the export of an unprocessed stone.
Ratnapura is the obvious place around which to build that identity.
The recent Gem City Ratnapura exhibition attracted entrepreneurs from countries including India, Pakistan, Thailand, the United States, China, Japan and Poland. That international interest suggests Sri Lanka does not need to persuade the world that its gems exist; it needs to persuade more of the world to come here to buy, cut, trade and add value to them.
The Government’s US$3 billion ambition should therefore be welcomed, but not confused with an achievement.
Sri Lanka has produced ambitious export targets before.
The test will be whether regulations become easier without becoming weaker, whether legitimate traders are encouraged into the formal economy, whether investment follows, whether value addition happens here and, ultimately, whether the export numbers begin moving towards the rhetoric.
The gems have been waiting beneath Sri Lankan soil for millions of years.
The country should not require another generation to work out how to make the most of them.
Be that as it may.
