Israel will celebrate the turn of the new Hebrew year this weekend, and I think this makes a great opportunity to start telling you about the history of the Israeli diamond industry.
The Israeli Diamond District
As most of you probably already know, Israel is one of the world's major diamond centers, along with Belgium, Hong Kong, the United States and India. In 2008, the Israeli diamond industry exported some $6.2 billion worth of polished diamonds and some $3.4 billion worth of rough diamonds to various destinations around the world. To date, there are over 2,000 diamond companies, factories and traders operating in Israel.
The Israeli diamond industry was born in 1937, moments before World War II broke out. Jewish diamond polishers and cutters who lived in the Netherlands were forced to flee Europe, and those who arrived in Israel established the first Israeli diamond polishing plant in Petah Tikva.
The Israeli Diamond Exchange Trading Floor
When the 15% tax on the import of rough diamonds in Israel was removed in 1938 by the British Mandate, thanks to the efforts of Aaron Abraham Ben Maurice, it helped the Israeli diamond industry flourish. In 1939, Netanya's first diamond polishing workshop “Ofir” was established, small factories expanded, and by 1944 the industry employed over 3,000 workers in 33 factories. Diamond workers received the highest salaries in Israel.
While European diamond industries halted their operations during World War II, the Israeli diamond industry continued to operate at full speed. The Central Selling Organization of diamonds in London (CSO), provided the Israeli diamond industry with a regular supply of rough diamonds for a fixed price, and Israeli diamond factories were able to sell their polished diamonds with virtually no competition.
However, after the State of Israel was officially formed, the industry started to climb its way back up. In the 1950s, Israel was immersed in construction and growth, and the diamond industry was no different: By 1959, the Israeli diamond industry had become bigger than ever before. With the support of a modern democratic state, the Israeli diamond industry was able to endure many crises, including Israel's wars with its neighboring countries as well as global and local recessions and political and cultural changes.
Israeli Diamonds Stamp from 1968
In 1968, The Israel Diamond Exchange inaugurated the Shimshon Building – a 24 stories high tower that was designed to serve the industry's many needs. Until this day, it is considered one of the most advanced diamond bourses in the world.
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