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Daily Israel Report

Israel and UAE: Diamonds are the Region's Best Friends

Israel's diamond industry is accomplishing what decades of diplomacy has not -- a quiet agreement with the United Arab Emirates.
By Hana Levi Julian
First Publish: 6/1/2010, 3:06 PM / Last Update: 6/1/2010, 3:29 PM

Flash 90

Israel's diamond industry is accomplishing what decades of diplomacy has not as a quiet economic revolution is taking place in the United Arab Emirates.

Diamonds mined in Africa and polished in New York are sent to Dubai for sale to that country's citizens and others who know where to look for the finest glittering gems in the Gulf. But few are aware that the owner of the establishment with the lovely crystal chandeliers is an Israeli Jew named Lev Leviev.

Leviev owns a total of five outlets under the high-fashion Levant name, each of which offers 16 lines of designer jewelry, including a sophisticated line of colored diamonds under his own name. In addition, he owns a haute couture boutique that presents collections from some of the top designers in the world – with all six outlets located in the heart of the emirate.

A spokesman for the firm told Bloomberg News, “We have nothing to do with Israel. We are an American brand.” But according to Tel Aviv business research firm Info-Prod Research Ltd., some $200 million worth of diamonds are also sent from Israel to be sold each year to global customers who meet in Dubai, such as representatives from India and China.

The diamonds arrive in Dubai via New York, Hong Kong, Belgium or Switzerland, according to Israeli diamond research company Tacy Ltd. Primary shareholder Chaim Even-Zohar told Bloomberg that Israel has an interest in marketing its stones in Dubai – but Dubai has an even greater interest in selling its rough diamonds to Israel, where the Ramat Gan cutting and polishing industry specializes in large, high-quality gem stones that are popular with its wealthy Arab clientele.

Dubai is required to allow entry to its territory to all members of the Antwerp-based World Federation of Diamond Bourses, which it joined in 2004. The emirate was allowed to join the federation partly due to the fact that Israel, a member of the 22-nation body, did not oppose its application.

It was after Dubai joined the federation in 2004 that Israel's involvement in the Gulf diamond market began to skyrocket, and Dubai's diamond trade leaped from being a small regional market to become the fourth-largest trading center in the world. According to the Dubai Multi Commodities Center, some $18 billion of rough diamonds and $14 billion of polished diamond imports and exports passed through the emirate in 2009.

Ahmed bin Sulayem, founder of the Dubai diamond exchange, said in an April 25 interview in the Dubai Multi Commodities Center that Dubai is leading the way towards a “diversified future” that promoted tolerance between Jews and Arabs. “We live in a different world now,” he noted, pointing out that Israel's trade is good for business. “It's open access to the Oman market, Qatar, Saudi Arabia,” the 32-year-old businessman said. “It just makes the pie bigger.”