At the Russian Government meeting on August 30, the Smolensk Kristall jewelry plant managed to secure lobbyist help from Russian top executives led by Prime-Minister M. Fradkov. The state of affairs in this plant and its relations with ALROSA discussed in the meeting turned into a prominent news-making event for mass media.
First Vice Prime Minister Sergey Ivanov supported the idea to increase the supply of raw diamonds from ALROSA to Kristall. “I visited Kristall and found that it was a really unique enterprise, unique in terms of quality... Kristall has its own niche – cutting large high-quality diamonds while small stones go to India, China and the Ukraine. And let them go there”. Ivanov expressed his confidence that Kristall is an absolutely unique enterprise and thus “there is nothing running counter market in supporting it”.
These words were replicated by electronic mass media and news agencies. However, there were skeptical overtones in print media reaction.
Valery Radashevsky, General Director of the Guild of Russian Jewellers Association, told Independent daily that he did not see any special problems related to this matter. “There are no limitations for processing diamonds at domestic gem cutting enterprises”, noted this expert. “De Beers is just another buyer, similar to Kristall. No one is violating the ground rules of the current agreement between De Beers and ALROSA, we are discussing the matters pertaining to sufficient supply of raw diamonds to the home market”. However, according to Mr. Radashevsky, there is an important undertone to all this: De Beers is buying exactly as many Russian diamonds as it needs to cover its contracts, while Kristall may run into sales problems if its production is increased.
In the opinion of the newspaper, establishing an actually 100% government controlled diamond company, which will buy diamonds from the state diamond monopoly and process them, appears to be not quite a market-oriented measure. Besides, the jewelry market in Russia is already well developed and there is no need in a government controlled jewelry monopoly (and this is what is meant when quotas for Kristall are being discussed).
According to Independent, Victor Maslov, the Smolensk Region Governor, voiced the idea to support Kristall trying to avoid criticism to his own address:
Victor Maslov tried to prove to the government that his region is far from being the most backward. At the same time, Minister of Economic Development German Gref insisted on the contrary: “From year to year your gross regional product grows by 1 – 1.5% slower as compared to its average value in this country, you occupy the 50s -60s positions in the rating of Russian regions”. Replying to Gref’s criticism, Victor Maslov declared that some problems of his region need decisions from the federal centre”.
Rough&Polished
