By Charles Wyndham.
I made the mistake recently of buying a book by Daniel Kahneman, Nobel Laureate in Economics, called ‘Thinking, fast and slow’.
Though he got his Nobel Prize in Economics, most of the blurb on the back of the book talks about him being "one of the greatest psychologists."
My confusion has only increased as I slowly plough my way through the book.
If nothing else, I have learnt that I clearly fall into the ‘slow’ category, the significance of which you will only be able to learn if you too take the trouble to read the book.
It is worth it, but I cannot claim that it is the easiest of reads, unless you happen to be a statistician, economist and a psychologist.
I am not, and after every few pages I have to allow the fog of an incontinent thought process grapple with some of the unyielding logic, or should I simply say confusion.
Confusion has overcome me in another sphere.
I have read two interviews given by Varda Shine, the managing director of the DTC, in India this month, one reported on Idexonline and the other in the Business Standard, dated within a couple of days of each other.
To me, a point of interest is that given that the interviews are to all intents and purposes contiguous, it is illuminating to see how the emphasis in each is so different.
Much of this ‘divergence’ can be simply a product of responding to different questions, but as an audience of one, me, I am again somewhat confused.
But before focusing on those bits that turn a hapless bystander around in a giddy state of whirling information, it is worth, for me, to first draw attention to those bits I understand easily.
It was pleasing to see that Varda referred to diamonds as a commodity when discussing possible price increases for rough in 2012.... “the commodity is estimated to rise in single digits.”
I took comfort from her confirmation that De Beers got into a complete pickle by what I would have termed over-mining and over-zealous cost-cutting in creating a fairly deadly combination, which I have drawn attention to in the past....“we will continue to prioritise waste-stripping and maintenance backlogs.”
The funniest of ‘planted’ questions was “De Beers helped Botswana become a major hub....”
Given that De Beers has been dragged to this water trough whilst behaving as the most obdurate of mules, this is simply a mind-boggling rewriting of history.
The response is suitably vapid and I for one, which is presumably intentional but not difficult in my case, certainly do not understand the reply, which refers to the fact that De Beers is “still negotiating an agreement to help excavate Botswana’s resources for the next ten years.”
I am at a loss, as I thought that much play was being made about the fact that the new marketing agreement between Government and De Beers was for ten years. Nothing I have heard to date has spoken about a ten-year agreement to excavate resources.
Moving over to the Idexonline interview, there were about as many illuminating candles lit as for the Business Standard interview.
Given the wholehearted endorsement of tendering by the new Managing Director of De Beers Philippe Mellier, the carefully crafted fog generated to ‘explain’ the new policy to what is in essence a sightholder audience was understandable.
The new Supplier of Choice policy is, as I understand it from this article, which includes comments by Mahiar Borhanjoo, the DTC sales director, where ‘dynamism’ is translated into being able to add any company to the sightholders list to those that buy strongly through the auctions at Diamdel, which is slated to sell 10% of De Beers’ production.
Varda Shine said that there were three major considerations as to sightholder selection, availability of the rough, the specific requirements of the prospective sightholder and finally an assessment of his performance.
This last issue, namely performance, is the one that interests me, though admittedly all criteria could be solved simply by selling to whoever pays the highest price.
Nowhere in the articles did I read about ‘living up to diamonds’ or ‘best practice principles’, for which Varda Shine must be congratulated.
However, when the subject of the recent problems in Tel Aviv of a reported illegal bank operating within the Diamond Exchange arose, the only comment was that firstly that there was an information blackout and secondly that it was “sure to have negative reputational implications for the industry.”
Varda Shine is reported as going on to say that from what information was available that the issue related only (my emphasis) to tax evasion and not money laundering. The latter, money laundering, would have very bad consequences for the diamond industry.
She is quoted as saying “the people who don’t do business in a fully transparent way need to be weeded out...”
Firstly, my initial reaction is that unbeknown to me Varda must be a Greek who it now transpires believe that no one, or not any Greek, should pay taxes, but all EU contributions to their solvency are welcome.
Secondly, where does this attitude sit when a coveted Botswana sight has been granted to a company that has been accused in court in America of inter alia money laundering? (PolishedPrices.com, ‘Who Dunnit?’ 23.1.12).
Seems to be something along the lines of ‘sauce for the goose is good for the gander’ or whatever way around the saying goes.