Terrorism in Khyber Pakhtunkhwa (KP) and the Federally Administered Tribal Areas (FATA) has devastated the region's once-booming gemstone industry, depriving the country of a substantial amount of revenue from exports.
"Despite our having vast deposits of gemstones in KP and FATA, the export of precious stones has fallen at an alarming rate, plummeting from Rs. 5.4 billion (US $52m) in 2001 to just Rs. 157m (US $1.5m) in the last financial year," All Pakistan Commercial Exporters Association (APCEA) Chairman Rashid Qadeer Mir said.
The relentless decline of business in the past 12 or 13 years has created hardship for thousands of workers, he said, noting that about 30,000 workers are associated with the sector and that 1,800 are registered as exporters, while the remaining work in mining, cutting and labour.
Scaring businessmen away from Pakistan
Customers don't want to come to Peshawar because they fear for their lives, Rashid told Central Asia Online.
"The major reason behind this abnormal slump in business … is terrorism," he said.
KP has about 60 varieties of gemstones, both precious and semi-precious, and has the potential for further exploration, according to KP's Mineral Department.
"The gemstone business is export oriented, and our main customers are foreigners who visited our province and placed orders after physically examining the stones," Rashid said. "Gone are the days when foreigners frequently visited gemstone bazaars of Peshawar and the business was booming."
It is ironic that Peshawar, which is considered a hub for the gemstone market, has no potential customer ready to visit the city because of the security situation, he added.
"The security concern has become so serious in KP that over the last six years we are unable to hold an international gem show, which we hosted annually in Peshawar since 1998," Manzoor Elahi, a gemstone exporter since 1979, said.
After the most recent gem show in 2007, the government refused to hold the event again because of security reasons, Manzoor added.
Generally, during those shows, 50 to 70 foreign gemstone dealers would visit Peshawar and place orders amounting from Rs. 1-1.6 billion (US $10m-15m). Even in the last show in 2007, 25 to 30 foreigners participated.
Trade Development Authority of Pakistan Director-General for Mines and Minerals Nusrat Iqbal Jamshed also attributed the decline in business to terrorism. "To attract foreign businessmen, you have to ensure fool-proof security," he said.
Innovative ways to market gemstones
To deal with the decline, some have explored alternative ideas.
Some exporters tried marketing their products abroad, Manzoor said. But only a handful of them succeeded because the majority of them lacked the education needed to interact internationally.
Newcomers, especially students, have traded on the internet. Still, the business volume is very low.
Industry insiders are lobbying for government help in rekindling their once-booming trade.
For example, Rashid has asked the KP government to subsidise housing, travel and other expenses that traders incur during their trips abroad and to offer courses on selling gemstones online.
KP officials say they're aware of the problem.
Security concerns have forced a temporary end to international gem shows, Nusrat said. The KP government will soon implement a plan for promoting gem exports, he added.
"The [KP] government is well aware of the gemstone sector's potential and … is contemplating practical measures to revive the lost business," Rifaqat Ullah Babar, economic co-ordinator of the Investment Promotion Cell in the Chief Minister Secretariat, said.
The government is planning to hold an international gem show but will make a final decision after evaluating the security situation, he said.
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