Introduction
The art & craft of fine quality jewellery manufacturing are deeply rooted in the traditional heritage and history of Pakistan. It was however in the Mughal period that the artisan class of goldsmiths arose to attain a distinct status in the subcontinent. The most famous among the various jewellery types that emerged during the times of the Mughals include, Minakari, Kundan, Polki, and Nauratan, etc. Presently, metropolitan cities of Lahore and Karachi are the major hubs of jewellery manufacturing. There are more than thirty major cities and nearly three hundred smaller cities/mandi towns where jewellery manufacturing and trading clusters cater to domestic demand. In addition, there are at least 45,000 villages where jewellers operate as single-shop, manufacturing and selling units to meet the demand of rural population.

Pakistan is a country with a population of more than 150 million people and a rich tradition of craftsmanship in jewellery manufacturing. Skilled/semi-skilled labour force is available at relatively lower rates, which offers a comparative advantage to the country. Their skill enhancement through training would lead to greater competitiveness.

Currently, Pakistan imports more than one hundred and twenty tones of gold per annum, which makes it the eighth largest consumer of gold in the world. In the year 2002, Pakistan exported gems & jewellery worth US$32 million (which went down to US$28.2 million in 2003). Although, the volume of exports of gems & jewellery from Pakistan is of no great significance in the total global trade of US$84.4 billion and much lower than India, which is our biggest regional competitor, but the growth potential of exports in the sector is huge.

Pakistan’s Gems & Jewellery Exports for 2003 (US$ million)

	World	India	Pakistan
Jewellery	27,900	2,175	24.5
Gems	56,500	8,414	3.7
Total	84,400	10,589	28.2

Source: UNSTAT

Pakistan has been gifted with abundant resources of several precious and semi-precious gemstones, at present mostly found in Northern Areas and NWFP, but with a huge future potential in Balochistan. Most important of the currently found stones are emeralds of Mingora (Swat), pink and golden topaz of Katlang (Mardan) and aquamarine of Chitral and Neelam Valley. At present, there is no formal survey available to identify the geological resources of gemstones in the country. Furthermore, due to lack of realization of its importance as an industry, those who are engaged in the mining, cutting/polishing and trading of gemstones in Pakistan have not been able to exploit the full potential of this sector.

The first gemstone mine in Pakistan was discovered in 1951, in the Haramosh Range in Gilgit. But it took no less than 27 years for the establishment of Gemstones Corporation of Pakistan (GEMCP), under the administrative control of Ministry of Petroleum & Natural Resources, in 1978. GEMCP was responsible for exploring, mining, auctioning and exports of gemstones. Within 15 years of its establishment, GEMCP was disbanded in 1993-94 and private sector was encouraged to invest in the sector. The impact of privatization proved to be positive, as exports of gemstones have risen since then, albeit slightly. In 2003, the total value of gemstones export was worth US$4 million. Factors including lack of appropriate skills, vested interest, regulatory bottlenecks, technological limitation and so forth, have been responsible for hindering the efforts of new investors to make any significant progress in this regard.

Gems & Jewellery Sector Strategy

The strategy is a combined effort of Gems & Jewellery Industry's stake holders, SMEDA (MOIP&SI) and J.E Austin Inc (USAID). It is for the first time that a working Strategy from mine-to-market has been developed and is based on first hand information from the different stakeholders rather than relying on the secondary data available. The methodology applied was studying the value chain analysis and recommending solutions to the problems and designing possible pilot projects for immediate implementation.

The main strategic initiatives of the Gems & Jewellery Strategy cover the following areas of intervention in the value chain:

Recommendations for Geological Survey of the Balochistan and NWFP. Introduction of Modern Technology and Methods of Mining. Establishment of Gems Trading House/Bureau at Karachi, Peshawar and Quetta. Establishment of Cutting Centres in Peshawar, Karachi and Lahore. Developing Training Facilities in the Cutting, Gemmology, Designing and Manufacturing. Quality Control - Hallmarking and Assaying Facilities as well as Gem labs for Certification. Marketing and Branding Initiatives, i.e., domestic market trend surveys, Website development, policy/regulatory changes to improve enabling environment for exports, seminars and Exhibitions. Development of Infrastructure i.e. logistics, financial, services, insurance and MIS system.

The success of this strategy would depend on immediate implementation of all its recommendations at all points of the value chain. This will require a SWOG coordinated collective effort by all ministries and stakeholders involved. The SWOG is confident that within the next 5 years the Pakistan Gems & Jewellery Industry can achieve a quantum leap in export earnings and also provide employment opportunities that will assist in poverty alleviation.

Following is the list of the private/public sector entities among which effective coordination is crucial for them to play a key role in the development of the Gems & Jewellery sector:

APGMJA/APCEA. GGIP. AKRSP. NAGMA & BGA. EPB (Ministry of Commerce & Trade). SMEDA (Ministry of Industries, Production & Special Initiatives). Ministry of Petroleum & Natural Resources. PCSIR (Ministry of Science & Technology). Geological Survey of Pakistan. HR Training Institutes: PSFD, BNU, GGIP, Provincial Vocational Training Institutes, etc

Proposed Pilot Projects

1. Geological Survey & Mining:

a. Geological Survey of NWFP, Balochistan and Northern Areas.

• Identification of new deposits and scientific quantification of existing ones.
  
• Support needed from Geological Survey of Pakistan to undertake required
  surveys.
  

b. Small Scale Mining Promotion Strategy

• Support needed from Ministry of Petroleum and Natural Resources; update needed of earlier SMEDA strategy.
  

2. Common Facility Training & Manufacturing Centres:

• Establish high-tech jewellery manufacturing & training centres in the main hubs, to upgrade quality and enhance productivity.
• Consultant Hired to work on detailed feasibility study.

3. Gemmology/Design & Training Institutes:

• AIGS has offered to establish full-fledged gemmology and jewellery CAD training institute with local collaboration.
• GIA (Thailand) to offer Extension Classes:
  
  
• Gem Identification (5 days)
  
• Diamond Grading (5 days)
  
• Coloured Stone Grading (3 days)

4. Gems Exchange / Trading Bureau:

• Various models have been studied for setting up this facility in Peshawar, Karachi and Quetta.
• Estimated cost per unit is US$ 300,000 including infrastructure and equipment.
• Additional required funding, if required, for both exchanges will be sought from GoP, the banking sector, and other financial sources.

5. Assaying & Hallmarking Facilities:

• Establishment of Hallmarking facility within 12 months.
• Gems and Jewellery SWOG to form Hallmarking Committee - a public private partnership including EPB, PNAC, PSQCA, PCSIR, TUSDEC, SMEDA, and Private Sector Stakeholders.
• In the first phase, need to establish Assaying and PCSIR is establishing model Jewellery Common Facility and Assaying & Hallmarking facility in Lahore to extend its services to assist the private sector in creating these facilities.

6. Gem Certification Labs:

• Report of Mr. Stephen Kennedy, consultant hired by EPB.
• Establish model gem labs in, Peshawar, Quetta and Karachi to extend its services to assist the private sector in creating these facilities.
• Request GSP to situate Gem Testing lab in Peshawar or Quetta, instead of the planned venue of Islamabad.

7. Branding/Marketing:

• To establish Pakistan's gem and jewellery companies as world-class jewellery supplier.
• Branding Sub-Strategy:
  
• Re-position Pakistan initially as low volume, high value, competitively priced supplier.
  
• Develop linkages with internationally known institutions (GIA,GIT) and associations (ICA, CIBJO) to transfer their reputation power onto the Pakistan value proposition.
  
• PAKISTAN-THE BRAND: Umbrella country campaign at International Trade Shows to build awareness about Pakistan�s Gems & Jewellery industry.
  
• Develop training, quality assurances (hallmarking, certification) and international market knowledge to develop higher margin market opportunities in local and international markets.
  
• Domestic Market Surveys.
  
• Pakistan Gems & Jewellery Introductory Brochure (in progress).
  
• Detailed Documentary about Gems & Jewellery Pakistan.
  
• Pakistan Gems & Jewellery Website (in progress).

Measures for a Conducive Business Environment

1. Review of Taxation Structure to Remove Trade Barriers and Encourage New Investment, i.e., industry be given zero rated status.
2. Import and selling of gold through banks.
3. Policy for import/export of jewellery manufactured from metals other than gold.
4. Entitlement against sales made on foreign credit cards.
5. Improvements in Secure Transportation Logistics through engaging international companies such as Securicor, Brinks, etc. and PIA.
6. Special Lending Schemes and Funding for Introduction of Technology Intensive Designing/Manufacturing.