This year we convene at a crucial moment, facing critical decisions that will affect the future of the world diamond industry, including our organizations and the millions of people who depend upon us for their livelihood.

Before getting into the details, I would like to express my sincere gratitude to the hosts of this congress. As a representative of the diamond industry that hosted the 2006 World Diamond Congress, I know what a tremendous job it is and how much time, thought and financial resources need to be invested – I salute the Russian diamond industry for undertaking this complex task. Although we are only at the beginning of our first day of discussions, based on what we have seen so far, I am sure we will all sit down to write warm letters of appreciation at the end of the congress.

The world diamond industry is broad and diverse, with such a myriad of different aspects, but when I raise my eyes and look around what I see is a family – one big family of dear people who may compete with one another but are also tied to one another, who may try to guard business secrets, but also do a great deal in the way of sharing and cooperating. It is this diamond family – producers, manufacturers and traders – that I would like to address today.

In the aftermath of the crisis we are facing a new reality and new challenges. We cannot be complacent and just return to “business as usual” as if nothing has happened. For the sake of the future of this family, I want us to change the ways in which we conduct our business, to explore new paths, appropriate for this new era. I hope we will succeed in rallying to this cause, and swiftly, because otherwise we may miss the opportunity. We are truly at a crossroads – and we can make the post-crisis situation a defining moment in our diamond history.

Let's step back for a moment and recall our last meeting, which was held in Antwerp in November 2009. It was our first gathering since the onset of the unexpected crisis, which began as a global credit crunch and quickly deteriorated into a deep recession. The only diamond center that reacted in a timely, organized manner was the Indian center, which announced a temporary cessation in its purchase of rough and took this “time out” to discuss the way forward with its bankers and government.

I saluted them at the time and I do so now again, out of great respect. At that meeting I suggested a few ideas for advancing our industry. For example, I proposed that we formulate best credit practice rules, in an attempt to make our members see that 60- or 90-day credit terms was a totally unreasonable practice. I suggested that we end the memo system, or at least reduce our industry's exposure to memos, and that we stop being passive towards the producers seeking short-term wealth by means of tenders.

During the crisis, the price of rough went mad and we all rushed for the very tenders that threatened to suffocate us.

It's no use crying over spilled milk, but we must turn down the flame to make sure it doesn't boil over again. We have to do this now, immediately. It is possible. In order to succeed we have to change our mindset. I believe that our behavior is absolutely illogical. When the banks reduced our credit facilities and demanded additional collateral, we were able to manage mainly by bringing back “money from home.” Yes – and this is a great compliment to our industry – we increased our equity base. But did we bring in money from home to continue to finance the retailers? Instead of analyzing what happened during the economic crisis and changing our ways accordingly, we are resuming our former business practices as though nothing has happened or changed. We are missing a prime opportunity to move from a buyer's to a seller's market. We can still do this.

The current demand for rough diamonds exceeds the supply, and there is a growing shortage of certain articles that are in high demand. Yet despite the shortage of rough, the polished retailers are still setting the terms of-= trade; they are dictating the prices, the periods of credit, the volumes they want on consignment, and so forth. They continue to do so even though we all know that the situation in the jewelry stores in our largest market – the United States – continues to deteriorate.

Jewelry stores are closing and new ones are not opening up in their place. Jewelry stores that have long-term rental agreements with malls continue operating because they have no choice. Oh yes, they can get out of their stores by filing a restructuring plan under Chapter 90 bankruptcy protection. In that process, the retailer remains only with profitable units and is allowed to close the bad locations. Too often, we, as unsecured polished suppliers, end up paying the price for such restructuring. Haven’t we learned anything?

U.S. retailers aren't talking about expanding and opening up more branches – they talk about striving for profitability. The United Sates, which until two years ago consumed close to half of the world's diamonds, is now reducing its market share, though it is still leading.

The demand in the United States is on the decline in terms of quality, as well. The current focus is on lower quality and lower prices, at a time when many of us want to get the market back to consuming high-quality goods. Think about what has happened: in the last twenty years, the price of diamonds, from thirds to one-carats, has remained the same. The price of gold has risen, the price of platinum has gone up but you can still buy three pieces of diamond jewelry for the price of one Louis Vuitton bag. Do you remember what Lewis Carroll said in Alice in Wonderland? Anyone who doesn't move forward, goes backwards. And that is precisely what is happening to us. A product that has treaded water for 20 years can be said to be running backwards. The price of diamonds today should be at least 200 percent more than their price in the 1990s. Just look where gold and platinum are and look where we are.

The time has come to put an end to this. We need to realize that the downstream pipeline, from jewelry manufacturers, through distributors to retailers, has depleted its stock and is now in a replenishment mode. That is very important to realize: the current hot demand for polished is for stock replenishment – the consumers haven’t returned yet to the stores. That’s why we have to be cautious in our dealings with the retail sector.

The time when we needed the retailers more than they needed us – whether for current income, to respond to the criteria of the Supplier of Choice verticalization aspirations or cooperative marketing programs, or to adorn our profile presentations for sightholder candidacy with impressive names – is over. Now we need to dictate the terms of trade and insist that we ourselves, the manufacturers who take the greatest financial and commercial risks, get a decent return on our capital and risks. We are not driven by greed; we are driven by a need to get our business on a healthy, responsible and sustainable financial footing.

Today there are no inventories with the producers; they are selling current production immediately. There is no stock in the jewelry stores, and they are replenishing. This is our chance, and it may be a once-in-a-lifetime opportunity. Let me say it again: we must take control of our destiny and shift from a buyer's to a seller's market, by setting our terms of sale and requiring the retailers, huge chains and Mom and Pop stores alike – to accept our terms. If they want our increasingly scarce product, they will have to pay a realistic and fair price.

In this context of getting the world diamond industry on track, I must address another burning issue – the Marange diamond fields in Zimbabwe.

I imagine that you have all managed to get up-to-date, and I hope that you did so in the right places, that provide the true information. It is very easy and comfortable to empathize with the claims of the NGOs. Poverty and suffering touch the hearts of any good person. But poverty and suffering are also very convenient instruments for manipulating and diverting people away from logical thinking.

Let's look at what is happening in Zimbabwe. The claim is that there was, or is illegal mining there, that the local population is being abused, and that atrocities are being perpetrated while the government gains wealth. Now two serious companies have come and established serious mines that meet all the stringent international standards regarding alluvial mining. They created jobs for local residents, provided them with good working conditions and paid – and are still paying – reasonable wages.

The Kimberley Process appointed a special monitor, a reliable individual, whom we all respect – Abbey Chikane. After examining the situation he wrote a report, recommending that rough export be permitted from these serious companies in Zimbabwe that he considers to meet the KPCS minimum requirements. There is nobody more fitting than Abbey Chikane to say whether these companies meet the requirements or not, as he was the first chairman of the Kimberley Process and one of the architects of the of the Process.

To our great regret, out of the 75 member governments of the Kimberley Process, three opposed legitimizing diamond export from Zimbabwe. Since the decision-making method in the Kimberley Process is based on consensus, which gives any single country a right of veto, we reached an impasse.

Now I would like to ask each and everyone of us to consider whether opposing the legitimization of Zimbabwe diamond export benefits the citizens of that country or hurts them. After that, that we can also ask ourselves whether we helped or hurt the diamond and jewelry industries the world over and all the people that make a respectable, honest living in it? I say "we" because even though we did not create the opposition, perhaps we can expedite the alleviation of the problem it caused.

Let's look more deeply at the issue: Do the governments of the United States, Canada and Australia want to provide an opportunity for thousands of miners in Zimbabwe to make a legitimate living or do they want the illegal mining to continue? Do they want thousands of people in Zimbabwe and tens of thousands who depend upon them to work under normal conditions, or do they want the continuation of illegal mining, where the terms of employment are not organized and abuse is commonplace? Do they want legal activity or do they want to encourage those who are corrupt, who are inevitable found in a place where diamonds need to be smuggled under the noses of the legitimate government and international organizations? What do we want – Abbey Chikane or Al Qaeda? It seems that the answer is unclear.

We must move quickly to include Zimbabwe's rough diamonds in the legitimate diamond pipeline, because they are legitimate. Abbey Chikane says so, and he knows what he's talking about. I ask all of you to read his report carefully.

We also need to do this to better the lives of the people of Zimbabwe.

We need to do so immediately because the release of the vast quantities of rough diamonds that are accumulating into the diamond pipeline all at once will cause a catastrophe here.

We will suffer. 20 million people who are directly and indirectly dependent upon the diamond and diamond jewelry industry for their livelihood will be hurt. The diamond industry is too easy a target. It is easy to attack us, to muddy our name. We must not let this happen. We must put every effort into reaching the decision makers in the US State Department and the two other governments that oppose the resumption of immediate exports. We need to write to them, email them, organize a delegation, go there and convince them. This is our task for the upcoming days. In fact, this is our task for the upcoming hours.

I hope that we will devote our discussions to the serious issues of the moment, and I wish us all that we will leave here having made significant – and most important, correct – decisions.

Thank you.