Dubai plans to revive pearl industry

Dubai plans to revive its pearl-producing past by restoring the industry that once was a mainstay of the economy before oil fuelled the emirate's present-day wealth.

The Dubai Multi Commodities Centre is in negotiations with partners from Australia and Japan to cultivate pearls anew in the sheikhdom, Tawfic Farah, executive director for Diamonds and Coloured Stones at the commodities center, said today.

"Pearls are back in fashion,'' Farah said in an interview. With gem industry's marketing efforts and rising pearl demand among younger women, Dubai is casting an eye on its past by looking at two projects, both of which are in "the final stage of approval.'' Hong Kong is currently the centre of a $1 billion a year business in rough pearls. The Dubai state-run gold and gemstone trading center said it's planning to revive its pearl past with an exchange to rival Hong Kong's, where pearls can be bought and sold.

Pearl sales outside tax-free zones and government-owned developments in Dubai, one of the seven emirates in the UAE and once famed for its pearl divers, also could be helped by dropping a 5 per cent tax, the commodities center said. "We think this is an obstacle to the industry and bad policy,'' Farah said. "What happens when you have duties like this is that a lot of people don't report the trade. This is a small margin business so 5 per cent is a lot.''

Other pearl cultivation projects are also under consideration in West Asia, including Qatar, Bahrain and Kuwait.

"Policymakers and public officials here are very comfortable talking about pearls, they're like camels and falcons "" a (regional) legacy,'' Farah said. "You meet a number of older people in town who remember their fathers diving for pearls and started out in trading by being involved in the pearl business.''

Pearls occur naturally when microscopic intrusions or grains of sand enter the oyster, which secretes a substance called nacre to cover it.

The production of cultured pearls began in Japan in the 1930s.