Israel's diamond industry in the 1980s differed considerably
from its 1950s version. Until the early 1980s, a handful of large
firms dominated the Israeli diamond industry. The nucleus consisted
of European Jewish cutters who had immigrated during the Yishuv.
In the 1970s, Israel surpassed Antwerp as the largest wholesale
diamond center, accounting for more than 50 percent of all cut
and polished gem diamonds. Diamonds were the only export in which
Israel was more than a marginal supplier.
Unlike other industries, the diamond industry was affected entirely
by external factors not under Israeli control. The diamond industry
imported rough diamonds, cut and polished them, and then exported
them. The slump in the industry from 1980 through 1982 surprised
many Israeli firms that had speculative stockpiles. The result
was a complete restructuring of the industry in FY 1984, and the
creation of approximately 800 new and smaller manufacturing units.
These small entities in mid-1986 concentrated exclusively on cutting,
leaving the marketing to larger export firms. This latter task
was supported by the 2,000-member Israel Diamond Exchange and
the 300-member Israel Precious Stones and Diamonds Exchange, together
with the quasi-governmental Israel Diamond Institute.
The success of this revitalization can be seen in the trade figures
for the industry. In 1982 net diamond exports were US$905 million,
equal to 18 percent of total exports; in 1986, however, diamond
exports had grown to nearly US$1.7 billion, or approximately 24
percent of total exports.
Data as of December 1988