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Jewelry Industry Should Help World Bank to End Poverty

World Bank logoDiamond, colored gemstone, and gold miners are some of the poorest people on earth, even though they help make a luxury product. The best way to resolve this paradox seems obvious: increase miners’ earnings. Global sales of diamond jewelry reached $72.1 billion last year. If only a slightly larger piece of the pie could be shared with miners who live in extreme poverty, they would no longer struggle to meet basic needs like food and shelter.


But let’s scrutinize this picture a little more. The poorest miners in the world are artisanal miners, or those miners who aren’t employed by corporations and use simple tools and methods. Globally, there are about 20 million artisanal miners, with most of them dedicated to mining for the precious metals and gems found in jewelry. Almost all of these miners live in poverty, but they also live in developing countries where lots of people are impoverished.


This raises a question. Are artisanal miners poor because they are paid unfair value for their diamonds, gold, and colored gems? Or are they poor because they come from places where everyone is poor and they simply chose mining as their occupation?


The Democratic Republic of Congo is a good example. There are about 700,000 artisanal diamond miners in Congo. Almost all of these miners live in extreme poverty, defined as earning less than $1.25 day. And yet it is not as if diamond diggers in Congo are the only people who are poor. More than 80 percent of Congo’s population lives below the extreme poverty line. Many diamond diggers in Congo might live in extreme poverty, regardless of whether they chose to be miners, farmers, or something else.


Both theories about why artisanal miners are poor are probably true. Artisanal miners’ earnings are unfairly low compared with the value of the gems and minerals they produce. They also live in countries where labor is cheap and the economic order is stacked against them. Still, this observation leads to an important point: besides paying miners more fairly, one of the best ways to end extreme poverty in artisanal mining would be to end extreme poverty itself.


The good news is that international institutions and non-profit groups are mobilizing around that very goal. About one billion people, or a seventh of the world’s population, presently live in extreme poverty. The World Bank last month announced a goal of reducing extreme poverty to only three percent of the world population by 2030. In addition to the World Bank, groups like Heifer International and the One Campaign are building grassroots support for efforts to end hunger and extreme poverty.


These development goals are within the realm of the possible. History shows that when the right conditions are in place, societies can be transformed. Between 1981 and 2010, the poverty rate in East Asia fell from 57 percent to 20 percent. Although experts believe the same kind of transformation might be difficult in Africa, it wouldn’t be impossible.


In a place like Congo, ending extreme poverty would mean, first and foremost, ending Congo’s civil war. It would also mean improving health and education, investing in infrastructure, and building strong, democratic government institutions. If progress could be made on some of these basic development items, that could do wonders for artisanal miners. Not only might earnings go up, but many people would never choose mining to begin with. They would accept different and higher-paying jobs.


International development goals clearly can’t be forgotten in the quest to make the jewelry industry more ethical. On the other hand, neither should the jewelry industry throw up its hands and leave the plight of artisanal miners to the World Bank and the international development crowd, or to governments that aren’t yet very effective. The jewelry industry has a moral obligation to lift its poorest workers out of extreme poverty, directly. There are practical ways to do this too. New certification systems like Fairmined gold enable artisanal miners to get fair value for their gold production. Similar initiatives need to be launched for for miners of diamonds and colored gems.


This is where artisanal mining’s potential could be huge. Although economic development affects the lives of artisanal miners, there’s a flip side to that idea: artisanal mining could help spur economic development. There are only about 20 million artisanal miners globally, but these miners indirectly support 100 million people, maybe more. Suppose the jewelry industry ensured that all diamond, colored gemstone, and gold miners were paid fairly. That could affect 100 million people and seed avenues for future growth. The World Bank would be well in its way to to lifting a billion people out of extreme poverty by 2030.


Economic development can make a big difference in the lives of artisanal miners. But that fact shouldn’t make the jewelry industry a passive player, waiting for development to occur. It can and should take the lead.


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