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The entrance to the Namak Mandi bazaar in Peshawar.

Extremely rare purple-lavender hued topaz on a matrix, sourced in the Khyber Pakhtunkhwa region of Pakistan.

  Unstable security and political situation impact Pakistani gemstone trade

March 30, 2015

The unstable political and security situation in Pakistan has reportedly had a devastating effect on the country, which according to the Gems and Gemmological Institute of Pakistan contains about 30 percent of the world's known gemstone deposits.

Pakistan's gem-industry center, in the famous Namak Mandi bazaar of Peshawar, is reportedly a shadow of its former self. The city is the capital of Khyber Pakhtunkhwa, formerly called the North-West Frontier Province, and is the administrative center and economic hub for the Federally Administered Tribal Areas of Pakistan. Located near the eastern end of the Khyber Pass and close to the border with Afghanistan, it is an area that has a strong Taliban presence and has been the site of several terror attacks.

Namak Mandi used to be a source for sapphires from Kashmir, emeralds from Swat, rubies from the northern areas, pink topazes from Katlang, Mardan, as well as zircon, different varieties of quartz, aquamarine, tourmaline, sphene, spinel, zoisite, apatite, epidote, morganite, garnet, scapolite, clinozoisite, xenotime, bastnaesite, peridot, nephrite, serpentine, red agate, diopside, pargasite, amethyst, scheelite, pollucite, chrome diopside and kunzite.

Unenthusiastic government support for the gem industry and lax of regulatory controls mean that official data is incomplete and, most probably, grossly inaccurate. According to a Macleans report, quoting the Pakistan Gems and Jewellery Development Company, gem exports from July 2013 to January 2014 totaled $3.4 million, but the actual value could be 100 times higher.

Smugglers have taken over the official trade, to a large degree because the organized trade is reluctant to visit the region. "Until recently, most of the business here was conducted by foreign traders but that has halted since they are too afraid to visit Peshawar now," says Zeeshan Nawab, a gemstone dealer in Namak Mandi, speaking to the Pakistani media. The new dealers that do visit reportedly are from China.

Government policies are criticized for having hindered the situation, rather than helped. A change in government policy, which now demands that foreign buyers make advance payments, is said to have had the effect of keeping many dealers away.

The Khyber Pakhtunkhwa Minister for Mineral Development, Zia Ullah Afridi, said that the regional government's policy is to reduce the illegal trade of gemstones in Pakistan. Speaking to local media, he said that while 90 percent of the gems extracted during the previous government's term were extracted illegally, the number has now been reduced to 15 percent.

The minister said that there are plans to establish an exhibition center in Namak Mandi, which would house a factory for gemstone cutting and polishing, with experts brought in from Thailand to train local workers.

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