The dangerous world of Pakistan’s gem trade – by Adnan R. Khan (MACLEAN’S Magazine – May 24, 2014)

Inside the world’s oldest gem market in Pakistan, home to terrorist financiers and drug smugglers

“Twenty-thousand dollars.” That’s how much Jalil says the blood-red ruby he is holding is worth. “It’s not my best,” says the 47-year-old gem trader. “My best pieces I only show to people holding a bag of cash.” A hush descends over the small group of men huddled around a lamp in Jalil’s shop.

The ruby, three near-flawless carats, glimmers with a surreal clarity. Other gemstones lie scattered on crisp white sheets of paper—sapphires from Kashmir, emeralds from Afghanistan’s Panjshir Valley, citrine and aquamarine—making the dark, windowless office feel like a cave of treasures.

The ruby is the true prize, mined in the remote mountains of Afghanistan and transported by smugglers over the treacherous Khyber Pass to Namak Mandi, home to one of the world’s oldest gem markets, in Peshawar. It is stones like these that can transform a pauper into a prince, or fund a war.

Jalil (who spoke on the condition his real name not be used) does not consider himself a prince, though other gem traders in Namak Mandi question how a man who only months earlier was struggling to survive can now show off gems worth tens of thousands of dollars. “He’ll do business with anyone who walks through his door,” one rival says. Jalil shrugs off the rumours.

“I am a businessman. I buy a good and then I sell it,” he says, counting out the wad of U.S. dollars he’s just acquired. In recent years, Namak Mandi’s bustling trade has suffered in the face of a relentless war and instability, he adds. Legitimate buyers have disappeared. Today, they have been replaced by money launderers, drug smugglers and terrorist financiers.

The ruby Jalil just sold originated at the mines in Sappar, Afghanistan, a centuries-old mining village now controlled by the Taliban. On a visit there last year, local miners said the militants take a 10 per cent cut from all the gems they extract.

“Protection money,” they said, adding that it’s likely some of that money helps local Taliban commanders purchase weapons, ammunition, or other supplies. In Peshawar, those stones are often bought with drug money, converting a large amount of cash into easily transportable gemstones; terrorist financiers use the stones to fund groups both in and outside of Pakistan.

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