Take a look at any engaged woman’s hand, in any country in the world, and chances are good that the diamond she is wearing passed through the Israeli Diamond Exchange before making its way onto her finger.
Very good, in fact. Israel may be a small country, but when it comes to diamonds, it’s an absolute superpower. The Israeli Diamond Exchange, housed in a series of four interconnected buildings just east of Tel Aviv in the bedroom community of Ramat Gan, boasts the largest diamond trading floor in the world, and executives here say that every second diamond of more than half a carat in the world passes through this mini-city before making its way to a precious metal setting and plush-lined box.
India has long ruled the diamond world, polishing, cutting and putting out the vast majority of diamonds into the world, but while its work tends to focus on the small stuff – chips and baby stones mostly, weighing in at slivers of a carat each – Israel dominates the sale of big stones. The Ramat Gan Diamond Exchange nets an total annual turnover of $28 billion and an annual rough trade of some $8 billion-$10 billion, or about quarter of Israel’s annual industrial export. The number is so staggering that in order to not warp numbers, the Israeli government details it on a separate line when issuing its economic reports.
“What we do here is the upper layer of the diamond business, and we are damn good at it,” says Yaakov Almor, the diamond exchange’s director of public relations. He is herding a gaggle of journalists past the IDE’s security labyrinth, a system that involves fingerprint scans, armed guards and double-locking revolving cage doors. Once we make it onto the trading floor, which is packed with international gem hackers thanks to the semi-annual US and International Diamond Week, it’s clear why security is so tight.
There are stones big enough for a Kardashian here, glinting in the light and packed into display cases in every imaginable shape and size. Colored diamonds, the ultra-rare earth-bred occurrence of an amber, pink, or even green or blue icy stone, are also everywhere, their rainbow shades glinting under the white lights. These rocks are bound for some of the world’s wealthiest countries, with the vast majority of Israeli-polished diamonds ending up in Belgium, Hong Kong, Switzerland and the US for trade. The average price per carat here is more than $2,000, meaning these are serious stones, or as Almor calls it, the “crème de la crème” of the world’s diamonds.
Roberto Coin, the famed Italian jewelry designer, is on hand at this week’s trading festival as the guest of honor, and he agrees that a diamond from Israel comes pre-approved with a stamp of quality.
There are stones big enough for a Kardashian here
“Professionals will always try to buy the best, and the best today is obtained more from Israel than from India,” he says. “The cut in Israel is higher… even if the diamond is cut abroad, if it is under the management of Israelis, they have the highest standard.”
A diamond from Israel, Coin says, is like a Rolls-Royce among cars. And according to Schmuel Schnitzer, president of the Israel Diamond Exchange, that quality begins with person-to-person relationships. So much of the global diamond industry has been modeled on the trust behind an Israeli handshake and a good word, Schnitzer explains, that in places as far-flung as Dubai and Bombay, the Yiddish phrase “mazal u’bracha” has become a shibboleth meaning “the deal is sealed.”
“We don’t need contracts,” he says. “We have them, but the deal is being finished by shaking hands. People, the friendships, are very important here.”
Schnitzer also is quick to declare that Israel, which was the first nation to adopt the Kimberly Process, an international standard that bans so-called blood diamonds, peddles only cruelty-free stones.
Reuven Kaufman, president of New York’s Diamond Exchange and also a guest in Ramat Gan this week, adds that the pump-and-trust system works across the globe.
“If you want to know the beauty of the Israeli diamond industry, try to buy a building in New York City,” he says. “You’ll sit down with lawyers, contracts, bankers, papers to sign, escrows, and at the end of the day the deal can still go bad. But go buy a diamond … we finish a deal for a large amount of money, we say ‘mazal,’ I will get the stones, he will get the money. People call it archaic, but believe me, it’s very cost-effective.”
For those who can make it past security, the diamond exchange complex offers a spectacularly surreal portal into a self-contained world of high-shine commerce. The complex’s four high-rise buildings, which sprouted in Ramat Gan in the 1960s long before the city’s other glass and steel towers, are linked by a series of hallways, passageways and strangely-marked elevators. Inside, there are six banks, including the State Bank of India, all catering specifically to the diamond trade. There are synagogues, doctor’s offices, and workout facilities. There are dozens of restaurants and cafes, a customs office, and a fully-functioning post office.
Downstairs in the trading room, in an homage to the world’s first diamond trading centers, which were built before the installation of electric light and needed the best illumination possible, the windows face north. And despite the high-rolling deals hashed on a regular basis here, the trading tables are divvied out in a surprisingly egalitarian system, with every trader, regardless of his net worth or connections, receiving the same 120 centimeters (47 inches) of display space and standard-issue day lamp to show off his wares.
We finish a deal for a large amount of money, we say ‘mazal,’ I will get the stones, he will get the money
Some 1,400 companies, comprising 20,000 workers, have their headquarters here, all working under the regulation of the Israeli Economy Ministry. Another 35,000 employees help polish, peddle and promote Israeli diamonds around the world.
Moti Besser, a former IDF general who now serves as the center’s director, says that in the 75 years the Israeli Diamond Exchange has been operating, it has succeeded in reaching every corner of the world’s diamond trade.
“Anywhere there is a demand for polished diamonds,” he says, “you can find a representative of the Israeli diamond industry.”