New Israel Diamond Exchange President Aiming For Quick Change

Israel Diamond Exchange (IDE) President Shmuel Schnitzer has wasted little time in moving to bring about change on the key issues he identified during his campaign following the October 9 elections where he defeated incumbent, Yair Sahar. “In a sense it has been relatively easy for me to adjust to this position because I am not new to it, having been president from 1998 to 2004,” he said. “It’s a good feeling and I feel very comfortable. I ran for election because I feel I have a lot to contribute.”
Schnitzer said he would have been delighted if his parents had still been alive to see him elected once again to lead the IDE. “I know that my father would have been very happy to see me as IDE president.”
As for the changes that are needed, he said: “I feel that we need to create a lot of change in the current situation, particularly with regard to the Income Tax authority after the episode with the pirate bank that was uncovered at the start of 2011. This is the most urgent issue. We need to change the attitude and bring some new ideas and I hope they will help us to find a solution in a relatively short time.
“We are looking to create an overall solution with the Income Tax authority, but there are many obstacles so it is a very complex subject. We have brought in outside consultants to help us, including accountants and lawyers and even two former high-ranking income tax officers.
“Indeed, it was when I saw what was happening regarding the impasse with the tax authorities that I decided to run for president. I saw that the industry could not possibly continue to operate in this way. I think my position in the Israeli industry and my experience along with creative ideas can help achieve an overall agreement.
“The situation was smooth when I left office in 2004 with the tax authorities. But the world has changed and what was the case nine years ago is no longer the same. At that time it was a good period for the diamond business, and diamantaires were happy to pay according to the turnover tax. But business is not so good now so people are complaining about many things. The so-called pirate bank caused many problems, of course.”
Schnitzer said the second major challenge where he hoped to bring about change is the issue of industry financing. “I have started negotiations and so has the IDE’s Banking and Financing Committee. We are trying to bring in more banks, and investment funds that have shown an interest in providing financing for the diamond trade, including some capital funds from China. We are working hard on this project. I think the Israeli industry is transparent so that should not be a problem for financiers, but we can always be even more transparent.”
Meanwhile, the subject of larger female representation, which was a major issue during the campaign for the presidency was one in which Schnitzer promised, if elected, to bring about progress. There is now one woman on the new board (Emma Yanober, who heads the committees on Promotion of Women and Next Generation).
“I want to bring about a change in the election by-laws that if a woman is not elected in board elections then automatically the first woman on the list has a guaranteed place on the board. We are discussing whether this will be a guaranteed one or two places for female members.
“This is a very important issue. During the campaign for the presidency, many of the IDE’s 270 female members raised this subject with me that they were nowhere near sufficiently represented. We will ensure that this is changed. There is no disagreement here. Everybody agrees that we much have more female representation on the board.”
The issue of bringing manufacturing back to Israel was also a main plank of Schnitzer’s campaign. He mentioned the plan proposed by Israel Diamond Manufacturers Association (IsDMA) President Bumi Traub to establish manufacturing plants in the town of Elad. “This is a very good project but it needs a lot of time and investment and that could take too long. In the interim, I am in favor of promoting a pilot scheme in Ramat Gan close to the bourse complex. There are several large factories that are almost unused which could each employ 200-300 workers.
“This is an interim step, and the IDE’s Industry Committee has already started working in this direction. Manufacturing in Israel is a must. Look at how the gap in wage costs between Israel, on the one hand, and India-China on the other has closed somewhat. These countries and others in Asia are no longer as cheap as they once were. We are talking about the manufacture of diamonds weighing 1.5 carats and up in the rough.
Another issue where Schnitzer wants to bring about change is in the elections for president, albeit not in his current term. “The campaign was too long and this was not good for the exchange. The elections were delayed from June to October since this is currently allowed under the IDE’s constitution. In the future, the elections will not be postponed. This was a bitter campaign and this was harmful to the unity and strength of the IDE.
“The delay was damaging because it created three extra months of accusations and unpleasant comments. We must all remember that we talking about politics here and not a matter of life and death. We all exaggerated with our behavior. We must act as friends and not enemies and learn to keep a sense of perspective. The most important thing is unity.
“I am happy that Yair Sahar and I have stayed friends following the election, and I will be very happy to consult with him on issues where I believe his experience and knowledge can help the exchange. He did many good things for the bourse as president, such as the idea of the US/International Diamond Week at the IDE and the Israel Diamond Week in New York.
“As far as the presidency is concerned, I believe that two years is too short. The president gets his feet under the table, starts working, and then before you know it the election campaign is upon you. I think the term should be extended to three years, but I will not try to change it during the current two years in office that I will serve, but only in the next term, if I am re-elected, and if the general assembly approves such a change. I think that three years makes more sense. The president of the IsDMA and the Israel Diamond Institute chairman both serve for three years.
Talking before the second Israel Diamond Week at the Diamond Dealers Club in New York that was held from November 11-14, Schnitzer said he was full of confidence about the event since in addition to the 1,500 DDC members that would be taking part, there would be another 150 diamond firms from across the world, including India, Spain and Canada, as well as other countries. A total of 120 Israeli diamond firms were allocated booths for the buyers’ week event – although more than 150 had requested space.
As a result, future shows will be expanded since the DDC does not have the space to provide more booths, he explained. “We have not yet decided where it could be held in a larger venue. The exchange is the best place because then you have the ‘magic’ that the setting provides which is very natural and conducive to business. Some people suggested that the venue be changed for this year’s event, but I objected because the bourse is the best place to hold it.”
Schnitzer revealed that the Belgian and Indian diamond bourses had expressed an interest in having an Israel Diamond Week at their exchanges. “You can expect some surprises,” he said.
Looking ahead to 2014, Schnitzer said he was optimistic due to the continuing recovery in the United States and Europe, as well as in the Far East.