Glittering gold, & Beyond Precious Pearls

From multi coloured gemstones to iridescent pearls, popular trade shows to grand jewellery boutiques, Bahrain is the latest Gulf country to make its mark on the world map in the jewellery industry says Sanjana Parikh

Ranked by the World Bank as a high income economy, The Kingdom of Bahrain is truly fit for the Royalty. Famous for its erstwhile pearls, lavish palaces and modern amenities, this Gulf country is no stranger to luxury. The nation includes a thriving gold souk and a pearl and gemstone testing lab that encourages trade and creation of high end jewellery. Comprising of 33 archipelago islands, Bahrain is interconnected by state of the art roadways and causeways making its chief port and capital city, Manama the epicenter for commerce, trade and tourism.

An Unexpected Collapse Bahrain’s affair with natural pearls dates back to more than 4000 years where pearl diving was the primary source of income for most locals. With a glorious history steeped in pearls, it is no surprise that this Gulf country was internationally famous for the brilliance and beauty of this precious stone. Owing to its location near underwater sweet water springs and superior oyster beds, a Bahraini pearl was considered the finest quality of natural pearls.

It was believed that in the olden times, pearls were more precious than even diamonds and attracted luxury jewellers like Jaques Cartier to the shores of Bahrain. However, after the tragic fall of the industry and the emergence of cultured pearls, the trading of natural pearls was prohibited and only a handful of pearl divers have retained their professions today.

Gold Rush In spite of being a leader in the production of aluminum based products, Bahrain was enjoying the tax free benefits on purchase of gold and gold jewellery. However, from the beginning of this year, Bahrain became the third member of Gulf Cooperation Council to introduce Value Added Tax (VAT) to its tax structure. This induced a gold rush as consumers flocked to jewellery shops to take advantage of pre VAT gold prices during the last week of December 2018.

The only respite to traders is that the structure is designed in such a way that the final customer will have to bear the brunt of the taxes as gold and jewellery sales are taxed under zero rating categories. This allows sellers to reclaim any VAT they had paid on costs provided they furnish the necessary documents.

Set in Stone
As an attempt to protect its strong heritage and facilitate its affinity for natural gemstones, the Kingdom of Bahrain set up Institute for Pearls and Gemstones (DANAT) which acts as a guardian of global gemological excellence. DANAT was formed with a vision to ensure, protect and enhance public trust in pearls, gemstones and jewellery and is an authority on industry standards, scientific knowledge and education. It offers various services such as premium report, identification report, micro card report and Q&A Report.

Tricks of the Trade
Jewellery Arabia is Bahrain’s attempt to open its doors to international traders and manufacturers and is a one stop shop for jewellers and precious stone merchants. Since its inception in 1992, this unique trade show has been attracting visitors from more than 48 countries every year. The 2018 edition of Jewellery Arabia saw more than 55000 footfalls and marked an increase of 9% from its predecessor. Jewels, gemstones and watches worth more than US$1 billion were on display at this five day extravaganza. The show is patronized by visitors from Saudi Arabia which comprises of 23% of the show’s total visitors. Delegations of manufacturers and retailers from leading jewellery exporting countries such as Hong Kong, India, Lebanon, Singapore and Thailand were special guests at this event. Jewellery Arabia was able to ring up sales of US$31 million, marking an increase of 20% from the 2017 edition.

Retail Reality
Although not as elaborate and lavish as its UAE counterpart, Bahrain Gold Souk is a treasure trove of gold based jewellery items and souvenirs available at attractive prices. Jewellers and gold traders from various parts of the world have set up shops at the souk that see a large influx of tourists and locals alike. The retail sector is one of the most active and buzzing sectors in the Kingdom growing at an annual compound rate of 13%, according to a report by KPMG. Several shopping malls dot the country making it a haven for shopaholics, the world over. These malls house the most exquisite and high end jewellery pieces from both local as well as international brands giving impetus to the industry.

country’s leading retailer is an established amalgamation of international gold and diamond studded jewellery along with luxury watches. It has marked its presence through several opulent boutiques across the country and is a trailblazer in its industry.

Homegrown jewellers like Al-Sarraj have strong roots in the country and are pioneers in luxury jewellery, diamonds and gemstone trading. As the first diamond merchant of the Gulf, Al Sarraj boasts of maintaining the highest standards of diamonds in all shapes and sizes. Its enviable collection of ruby, sapphire, emerald, tanzanite and alexandrite is second to none.