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Monday, 27 August, 2001, 15:12 GMT 16:12 UK
UK diamond policy under attack
Gabarone street scene, Botswana
The Botswana economy depends on diamond exports
The UK government's policy on 'conflict' diamonds has come under attack from a leading diamond business man.

A Botswana businessman has criticised the government's support of the campaign against the sale of diamonds to fund civil war, so called 'conflict diamonds'.

Louis Nchindo, the head of Debswana - a joint venture between De Beers and the Botswana government - says that the policy is destroying economies which count heavily on legitimate diamond sales, like Botswana.

It is estimated that the smuggled stones account for about 4% of the world's estimated total $7.5bn trade and fund conflicts in countries such as Angola, Sierra Leone and the Democratic Republic of Congo.

In an interview with the Financial Times, Mr Nchindo says the former minister for Africa, Peter Hain, used the issue to support the Labour governments' claim to have an ethical foreign policy.

Dependency

James Allen, diamond market expert at Johannesburg stockbroker Barnard Jacobs Mellet, said that diamond sales are extremely important to the Botswana economy.

"To say the economy in Botswana is largely dependent on diamond exports would be very true," he told the BBC's World Business Report.

"So any campaign to introduce a boycott of diamonds would be very negative for the growth rates of both the Botswana and Namibian governments in particular."

"I think where the Botswana government and Debswana are concerned is that any wide-scale boycott of diamonds would not just block the flow of conflict diamonds, but could harm the diamond industry at large," James Allen said.

Mr Nchindo's concern may have been spurred by the slowdown in the demand for diamonds in the US market, which accounts for about 48% of world diamond sales.

The slowdown there can in part be attributed to the movement to take action against conflict diamonds.

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James Allen, Barnard Jacobs Mellet
"The exports of diamonds form a significant part of their (Botswana's) GDP"
See also:

22 Jun 01 | Americas
US crackdown on 'blood diamonds'
19 Jul 00 | Europe
Traders ban conflict diamonds
26 Jul 01 | Country profiles
Country profile: Botswana
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