Wars Boost Profits : Singapore Is Riding Crest of Rug Trade

“This war in Afghanistan is a terrible, terrible thing,” declared the merchant of Oriental carpets, running his hand over the smooth weave of a dark red Turkoman hatchli. “Terrible--but a blessing in disguise.”

Around him, in a sales room here in Singapore, far from the conflicts on the plateaus of western Asia, stacks of carpets lay heaped on the floor. Shimmering Persian silks from the Iranian cities of Qom and Esfahan, geometric Baluchis from Afghanistan, bold, flat-weave kilims and crooked tribals from the hinterlands--each one, for now, a bargain.

War in Afghanistan and revolution in Iran, along with the rise of the Pakistani carpet industry, have unraveled the traditional trade patterns in Persian and other Oriental carpets over the past decade. Panic and desperation have disrupted the orderly flow of merchandise to world markets, and prices have dropped.

‘Major Confusion’

“There is major confusion,” Edmund Rajendra, manager of one of Singapore’s major carpet houses, said of the price changes. “Many people who bought carpets from me 12 years ago (before the Iranian revolution) are waiting to kill me.”

Singapore’s trading houses, with long-established reputations, have now become the beneficiaries of the disruption. Carpets are pouring into the duty-free city state. The price is right, business is good and word is spreading through Asia and the Pacific that Singapore is the place to deal.

Suliman Hamid, whose firm, Hassan’s Carpets, has been selling Oriental rugs here for years, cites two reasons beyond price--Singapore’s duty-free status and established dealers, whose contacts permit the direct importation of the goods.

They Have Connections

Connections are the foundation of the trade, and the firms here, many of them operated by Iranians and Pakistanis, have them. Suliman and Rajendra of Oriental Carpet Palace, whose owner is a former Turkish diplomat, both talk in terms of “our people” in Iran, Pakistan and other capitals of the trade.

“We cannot visit our people in Iran,” Suliman says, for instance, “but our people can visit us here in Singapore.”

Those inside contacts can read developments like those that shook the carpet trade nine years ago.

The goods began flooding out of Iran even before the Ayatollah Ruhollah Khomeini came to power in early 1979. The carpet merchants in the bazaars of Tehran, Qom and Kashan saw change coming.

“They moved carpets out by the lorry (load) and planeload,” Rajendra recalled. “The whole of Europe, America and England was flooded with carpets.”

When the Western countries imposed economic sanctions against Khomeini’s regime, he said, the remaining carpet warehouses were looted by panicked Iranians seeking anything of value.

At the Iranian port of Abadan on the Persian Gulf, traders from Abu Dhabi and other gulf states swapped carpets by the bale for food and money.

“The same price was paid per square foot whether the carpet was silk or wool or antique,” Rajendra exclaimed. “It was a desperate business. If you were there at the right place and the right time, you could have gotten a fantastic deal.”

Smuggling Routes

Now, some order has returned to the Iranian trade, but the seven-year-old war with Iraq and the inflationary exchange rate--once seven Iranian rials to the dollar but now 200 to 1--has kept the smuggling routes open, said Suliman. The gulf state of Dubai is the current outlet.

In Afghanistan, less than a year after the Iranian revolution began, Soviet troops invaded to support a Marxist regime, opening another crack in the market. Soviet offensives drove more than 2 million Afghan refugees into Pakistan’s Northwest Frontier area, and now supporters of the moujahedeen resistance, hungry for money to buy guns, are sweeping their country clean of carpets.

Rajendra described a visit to the refugee camps where the trading is done:

“There’s a fixed date when the buyers will be in the camps, about once every six weeks. Maybe 80 horse carts will come in, full of carpets. The roads will be jammed for two days.

“The collector, the man who brings them in, has a sheet of paper with the name of the family that’s selling the carpet and the price they want. We don’t bargain. You couldn’t bargain. Some of these carpets take a year to make and they’re asking just a hundred (Singapore) dollars (about $50 in U.S. currency).

“They have faith that we’ll buy at a fair price, and the collectors go to the ends of the country and beyond to get the carpets. These are mainly tribal rugs, ancient designs, and some that show up in the Pakistan camps have come from the hinterlands of Russia and China. Who knows how they get them?”

A Trade Secret

How the carpets leave Pakistan and Dubai is a trade secret.

An end to the war in Afghanistan and the Iran-Iraq conflict could burst the bubble, Suliman of Hassan’s Carpets admitted, suggesting that the resulting market control and economic order could drive up the price of Oriental carpets by 300% or more in Singapore.

“That’s why we are dumping all our money in the market,” he explained. “Any carpet I see, I buy.”

London, with the big auction houses of Sotheby’s and Christie’s, remains the center of world trade, both dealers agreed, and Europeans the most discriminating buyers. But the duty-free ports of Singapore and Hong Kong have made a niche in Asia and the Pacific, they said, claiming Singapore has the more established reputation and greater variety and volume.

It is difficult to pinpoint when Oriental carpets became a business. The founder of Rajendra’s firm, Haji Mohammed Khan Zephyr Amir, suggests in a series of books that it began in Turkestan, a region of nomadic peoples now lying mainly in the Soviet Union that stretched from China to Turkey along the old Silk Road.

A Long, Proud History

Originally produced by families to provide warmth to the home as floor and wall coverings, the carpets began to move east and west with the camel caravans. To the west, Egypt produced excellent carpets--including, presumably, the one in which Cleopatra had herself wrapped to gain an audience with Julius Caesar. The Moguls took the art to India.

The Chinese had also developed the art separately and have produced their own distinctive carpets for thousands of years.

But the founder of the commercial trade in Oriental carpets is widely accepted to be Shan Abbas the Great, a 16th-Century Persian ruler in Tabriz in what is now northeastern Iran. He brought the art from Turkestan in the north to the Central Persian cities of Kashan, Esfahan and Nain, where schools under a master weaver produced rugs for royalty, both for enjoyment and for use as royal gifts.

The carpets were made with floral designs, or sometimes depicted hunting scenes. As happens now with true Oriental carpets, each strand was hand-knotted, sometimes more than 1,000 knots to the square inch. The finest in strength and color are silk on silk--silk threads on a silk base.

Distinctive Design, Colors

Until Shan Abbas moved the art into the cities, each village or region had its own distinctive design and colors, based on available natural dyes. The merging of tribal peoples over the centuries has mixed some of the characteristics, and collectors most treasure those that are authentic in both color and design.

But today’s market has gone beyond collectors. Take the tribals, never a factor in the world trade before World War II but now appreciated by more adventurous buyers, and far cheaper than the classic Persians.

“Charming,” Suliman said of the tribals, which are characterized by strong natural-dye colors but uneven work and form. The makers of fine carpets, the mainstay of Suliman’s firm, use a graphic or pattern to follow in weaving. Tribal designs are carried in the weaver’s head, or sometimes scratched out in the dirt with a stick.

Another major postwar element in Oriental carpets is Pakistan. After a checkered start in the 1940s and 1950s, the nationalized Pakistani industry is turning out many first-quality rugs. According to Rajendra, the average Pakistani carpet is probably superior to its Iranian counterpart, but the Iranian rugs still command higher prices because of the Persian tradition. It was another story in the 1940s.

Used Army Socks

“Pakistan could not afford to import fine wools at the beginning,” Rajendra recalled, “so they unraveled army socks and used them. Those rugs smelled terrible!”

China is still a major exporter of carpets, using simple, open designs with a thick pile, into which patterns in relief can be cut. The Chinese carpet is Oriental, of course, but distinctive from the Persian designs turned out by Iran and Pakistan. And Turkey, according to Rajendra and others, may produce some of the best Orientals but has not developed the industry for export.

The buyers have changed as well. When the trade broke out of the Middle East, Germans were among the first buyers. Hamburg and Frankfurt remain major centers of a trade developed by Iranian Jews and Armenians. Europeans in general are considered connoisseurs of carpets as art and investments, the traditional upper-class buyers. In Asia, the Japanese follow suit, preferring the classic silks.

The new factor of the buying end is America--a vast, well-heeled market with eclectic tastes.

“A lot of Americans like Chinese carpets,” Rajendra observed. “They like a thick pile they can work their toes into. And they like Pakistanis. Americans come here with decorative ideas in mind--the colors of their upholstery and drapes back home. Pakistanis, working with chemical dyes, can give you any color you want in a Persian design.”

The traditionalist Suliman, shaking his head, agreed.

“Right now,” he said, “the Americans are interested in avocado. A few years ago, it was desert tones.”

Rajendra’s firm is promoting appreciation of all kinds of hand-knotted Orientals with a series of lectures in Singapore and weekly auctions at an uptown hotel. In the insular life of this city-state, the Sunday afternoon auctions have become an institution for locals and bring in tourists as well.

“They’re amazed--I’m amazed--at the prices,” Rajendra said enthusiastically, auctioning off a Persian Bakhtiari tribal that still carried the dust of an Afghan refugee camp.