21. Impact of Global Economic Recession on the Livelihood of Di Amond

Topics: Diamond, Unemployment, Recession Pages: 30 (10022 words) Published: August 29, 2011
Impact of Global Economic Recession on the Livelihood of Diamond Workers: a case study of Gujarat, India

Sarbeswara Sahoo 1 Assistant Professor (Economics) Mahatma Gandhi Labour Institute Ahmedabad

Diamonds may be forever, but apparently Diamond buyers are more Fickle

Gujarat is one of the most economically progressive provinces of the Indian Sub-Continent. Diamond Industry and the Diamond Workers have played a significant role in the high economic growth estimated at 12% SGDP per annum.It is estimated that Surat city alone employs 4.5 Lakhs in the diamond industry and roughly around 1 million people work in the diamond industry. Rough and cut diamonds worth of $43 Bn are imported from Antwerp to Surat and other cities of Saurastra region of the Gujarat State and are polished here and again export to countries like US and other European countries. On the onslaught of Global recession especially in the US the fate of million of these workers became uncertain who lived a dignified life .The plight of the workers were reported in the media and even the film industries captured the woe of the life of the workers. Most of the diamond units closed in the mid of 2008 and virtually the whole diamond industries closed down during the early 2009 .Workers migrated back to their village and fall back upon cultivation and other non-farm activities like weaving, vegetable vending, sewing and stitiching,embroidery and so on. Interestingly the workers cope with the changed situation by taking up alternative employment. Keeping the grim situation of the workers, present paper would try to understand the impact of Global Recession on the livelihood of the Diamond workers through a primary field study of Saurastra and South Gujarat. The study will also try to find out means of coping strategy of the workers and impact of employment guarantee and other social safety measures initiated by the Government. In any case recession reoccurs; what precautions the diamantaries, the workers and the Government has to take in advance.

1

Assistant Professor of Economics, Mahatma Gandhi Labour Institute, Government of Gujarat, Ahmedabad, India, Email:sahoo@mgliahd.org.

1

Introduction The global financial crisis started in 2007 and continuing until now is one of the worst recessions witnessed by Global Economy since the Great Depression of 1930s 2 .The impact of the present Global Recession rooted especially in the United States of America has spread to other economies and sectors of the world directly or indirectly depending on the U.S. Economy. Both the formal as well informal sector of the economy as well as employment has been deeply influenced by the crisis. Many financial institutions like the Lehman Brothers and others were deeply impacted by the ongoing crisis. Many financial institutions closed down and others approarched the U.S. government for bail out. The real estate market, the stock market has suffered a lot. It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, substantial financial commitments incurred by governments, and a significant decline in economic activity. The crisis rooted in the real estate and housing market in U.S. that collapsed in 2006.This affected the value of securities tied to the real estate market and hence impacting the global financial institutions negatively. Questions regarding bank solvency, declines in credit availability, and damaged investors confidence had an impact on global stock markets, where securities suffered large losses during late 2008 and early 2009. Economies worldwide slowed during this period as credit tightened and international trade declined.3The impact of present recession is huge especially in U.S. and has implication for other economies in the world. The is because as reported by the brooking institution that says U.S. consumption accounted for more than a third of the growth in global consumption between...

References: Breman Jan and Das Arvind N. et.al.(2000):Down and Out:Labouring Under Global Capitalism ,OUP,New Delhi
27
Chang So-Young et al (2002) The Global Diamond Industry, Chazen Web Journal of International Business Fall, www.gsb.columbia.edu/chazenjournal SebastianHenn, S (2010): Clusters, Transnational Entrepreneurs and the Emergence of New Global Production Patterns. The Palanpuris and the Reorganization of Diamond Manufacturing, MPRA Paper No. 22686: Online at http://mpra.ub.uni-uenchen.de/22686/ Green Duncan et.al. (2010)The Global Economic Crisis and Developing Countries, Oxfam Austrailia Hirway Indira (2009): loosing the sparkle; Impact of Global Crisis on the diamond cutting and polishing Industry in India, UNDP India Kamran Sulaimani (2009):Chequered path: From chiseling diamonds to cutting roads, NREGS Update News for FES’ Internal Circulation No. 2 / March,2009 Lee Yue Man et.al (2008): The Gujarat Diamond Cluster: Is It Forever? Microeconomics of Competitiveness, spring 2008 Ppenheimer Nicky O, Chairman of De Beers (2008): Diamonds, Development and Democracy, The annual Lubbock Lecture in Management Studies, The Said Business School, Oxford University, April 29 2008 Prasad H.A.C. (2009): Global Economic Scenario and its Effects on Indian Gem and Jewellery industry with Particular Reference to Volatility of Gold Prices Purani Keyoor (2000): Gujarat Model of Entrepreneurial Innovation: A Study of Surat Diamond Industry, EU – India Cross Cultural Innovation Network Project 1999-2000 Rao Indu (2009): Organizing the un-Organized? The Rise, Recession and Revival of the Indian Diamond Industry, W.P. No. 2009-09-01, Indian Institute of Management Ahmedabad, India Rao Indu and Bhatnagar Deepti (2009): Surviving the Recession: Venus Jewel—A Case Study from the Indian Diamond Industry: Vikalpa, Volume 34, No 3, July - September, 2009, IIMA Sahni Pawan.S., (2008): Diamond Cutting Industries Project Submitted to International Academy of Management Bangalore Verick Sher and Islam 4934 Iyanatul (2010): The Great Recession of 2008-2009: Causes, Consequences and Policy Responses, The Institute for the Study of Labor (IZA) DP No.
28
Websites Referred
Diamond Consultants Canada (2008): The Diamond Industry; An Opportunity and Impact Assessment: www.diamondconsultants.ca Diamond Fact Sheet: www.diamondfacts.org DODAQ NV (2009): Investment in Diamonds; An overview, Web: www.dodaq.com Gem and Jewellery Sector Profile, Vibrant Gujarat 2011, INDEXTb Government of Gujarat Indian Gems and Jewellery: A Sector Study, January 2010, No. 53: Exim Bank: Research Brief, Website: www.eximbankindia.in Map of Gujarat; httpwww.hindustanguide.com Rapaport International Conference 2007, Rapaport group, www.rapaport.org Self Employed Women’s Association, Ahmedabad (2009): The Impact of Financial Crisis on the Informal Sector in Ahmedabad City UNDP (2009): Global Economic Crisis: Impact on the Poor in India, A Synthesis of Sector Studies
29
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Global Recession and Its Impact on Pakistan Economy Essay
  • Impact of Recession in Global Economy in India Essay
  • Impact of Global Recession on It in India Essay
  • Essay on global recession
  • Impact of Global Recession Essay
  • Essay about Economic Recession
  • Economic Recession Essay
  • Essay about The Impacts of the Global Recession of 2008-2009

Become a StudyMode Member

Sign Up - It's Free