Dull Figures Hide Odd Stories

The first figures that jump out are the clear decline in Botswana’s rough diamond production. After years of leading the global production charts, De Beers' main source of rough diamonds is now clearly lagging behind Russia and the Democratic Republic of Congo, according to the recently released Kimberley Process statistics for 2009.

Alrosa was true to its promise from November 2008 that it would not cut back production in the face of the economic downturn, maintaining its extraction levels practically unchanged.

Botswana’s production was reduced by De Beers’ decision to match its production to demand. The most recent figures, released by the Bank of Botswana shows that production in the first half of 2010 is already up 58 percent by value compared to 2009.

But while we see an overall reduction in 2009 compared to 2008 in many countries, we also see that some experienced an increase. We see it in Sierra Leone and Angola where production grew but the average value declined in 2009 - against the global trend. Makes you wonder.

While wondering about odd figures, checkout Lebanon’s numbers: in 2009 it imported a little more than half a million carats but exported almost double that. It just may be that someone discovered another secret diamond mine! You may suspect that it’s only an overhang, but it can’t be from 2008 when Lebanon imported and exported about 2.4 million carats worth $47 million coming in and $48 million when it left.

So, if Lebanon did not add any value to rough going through it in 2008, how come the total value of trade in 2009 was practically flat too while the volume ballooned? The average value has actually dropped from $106.86 p/c to $63.26 p/c, losing 41 percent of its value as it departed. Very odd, unless of course there was some money laundering going on in the process.

The transparency that KP requires has great value. It flushes out inconstancies. If a country's trade doesn't make sense, it needs to be investigated. Sometimes there is a good and legal reason for the inconsistencies. But sometimes not.

Here is the challenge: now that we know that something is not kosher, what are we going to do about it? Maybe what KP needs is not a secretariat. Maybe what it needs is some teeth.