Student: XXXX YYYY
Subject: International Economics, Spring 2007
Table of context:
2.Brief description of diamonds 2
a.Nature of Diamonds .4
b.Industry's Lack of Transparency 5
4.Political-economical view on this issue ..7 5.Tariffs.( USA) .8 6.Conclusion and personal view 10 7.Bibliography ..12
Diamonds are said to be woman's best friend. Indeed, Marylyn Monroe sang about it in one of her movies. Well, I would add here: diamonds can be anyone's best friend. Knowing that diamonds have a great value, it has been an issue of illegal trade in countries where it's a natural resource, therefore scarce resource: Sierra Leone, Congo, and Zaire. It is also a fact that diamonds have been the main funding source for rebels in places like Angora and Sierra Leone in order to be fueled a brutal war. Although it is very sad when we hear and see that people are been killed, tortured and used, of mining diamonds, I will not discuss about the reasons why is done so. However, in this paper I would like to emphasize the international trade of diamonds, legal or illegal way and its impact on the government's income with a brief political-economical view on this issue.
2.Brief description of diamonds.
Before I go on with arguing in this paper, I would like to make a brief introduction of such a thing called "diamond". Diamond is the hardest natural mineral and has many other exceptional properties that collectively make it an important industrial and scientific material. Diamonds have exceptional value as a precious stone. Unique geologically, they form at great depths within Earth and are typically billions of years old.
Two important properties, brilliance and fire, contribute to diamond's beauty. Brilliance is the fraction of the light that falls on a diamond that the diamond returns to the eyes of an observer, the lighter returned, the higher the brilliance. Fire is the ability of a substance to split white light into rainbow coloursthe greater the separation between colours, the greater the fire. Moreover, diamonds are natural resources with a great value and therefore being a scarce resource. Depending on quality, rough diamonds can be used either as gemstones or for industrial purposes. Stones with the highest quality in terms of clarity and colour are sold at high prices as gemstones at major diamond trading centres such as Antwerp, Dubai, New York or Tel Aviv. They are then re-exported all around the world to be cut and polished. Once a diamond has come this far in the process, its origin is impossible to trace.
a.Nature of Diamonds
The nature of diamonds makes them attractive to criminal elements. Diamonds are found in remote areas of the world and can be extracted both through capital-intensive deep mining techniques as well as from alluvial sources using simple technology. Individual diggers across west and central Africa mine alluvial fields that are widely scattered and difficult to monitor. Diamonds are easy to conceal and smuggle across borders, and smuggling routes are well established by those who have done so for decades to avoid taxes. For instance, in the movie "Blood Diamonds", the main protagonist Leonardo Di Caprio was smuggling diamonds inside of a sheep's wool. Though it may be possible for experts to identify the source of an unmixed parcel of rough diamonds, once diamonds from various sources are mixed, they become virtually untraceable. Identifying the origin of alluvial diamonds is complicated by the fact that the river systems depositing those diamonds run across government- and rebel-held areas as well as national borders. Although rough diamonds can be marked, once...