Center will house the Panama Diamond Exchange to support retailers.
Panama is launching a $200m tax-free Gem and Jewellery Center – a marketplace that will also house the Panama Diamond Exchange (PDE) – in a bid to support the $8bn fine jewellery retail business in Latin America.
The PDE, which is expected to start trading before the end of the year according to the Financial Times, is the 29th such market worldwide.
Due to a lack of a diamond exchange in the region, buyers had to travel to the US or Europe or buy second-hand diamonds at a premium.
Diamond Exchange members will be carefully vetted and must adhere to a strict code of conduct throughout the dealing process.
The purpose of the development is to establish a trading hub in the region, dubbed the world’s most untapped jewellery market. Latin America currently has more than 11,500 jewellery shops, 320 mining companies and nearly 750 wholesalers of diamonds, precious stones and jewellery.
Honorary president of the World Federation of Diamond Bourses, the World Diamond Council and the World Jewellery Confederation, Eli Izhakoff, told the Financial Times: "The retail value of the fine jewellery business in Latin America is about $8bn and given current growth rates, it is fair to state that it will be worth in excess of $10bn by 2017. The wholesale value will be in the region of about $5bn."
Supporting this assessment is recent evidence from Knight Frank Research’s The Wealth Report 2014 that discovered jewellery is the most significant investment of passion for Latin Americans.