By Ahmad Shah Katawazai
Afghanistan’s mineral wealth could help kickstart the economy, but beware of the resource curse.
In addition to Afghanistan’s geopolitical and geostrategic importance, its lucrative mineral resources — estimated to be worth between $1 and $3 trillion — could be one of the major justifications for the United States to remain in the fragile state.
Afghanistan is considered to be sitting on one of the richest troves of minerals in the world. The abundance and wide range of natural resources in the country have the potential to provide the backbone for a sustainable economy. While strategic minerals may give Afghanistan a special advantage in attracting international investment, those mineral resources could turn into a resource curse as Afghanistan struggles with the hostility of its neighbors, internal ethnic fractions, rising insecurity, active insurgency, corruption, warlordism, absence of proper and effective institutions, and more importantly the absence of necessary precautionary measures.
Afghanistan has long been a foreign aid dependent country. With the economy in very poor condition, there is one thing that can possibly shift Afghanistan’s unstable economy into a stable one: the proper exploitation of its mineral wealth. At the time when critics are frustrated with the United States’ role in Afghanistan after 16 years of war and billions spent in the country, there is a hope that Afghanistan’s untapped mineral wealth will kick-start the economy, reduce its dependency on foreign aid, and ultimately help the country stand on its feet. The revenue generated through commercial mining projects will pave the way for the country to end their reliance on foreign aid, promote industrial socioeconomic development, and engender positive economic conditions at the national level, which will undermine insurgency and provide alternative economic development while ensuring stability.
Proper investment and control of mineral resources will also prevent mining revenue from flowing into insurgents’ pockets. Currently, natural resources — particularly gemstones and marble — are plundered openly. Due to insecurity and the limited presence of the government in some parts of the country, warlords and insurgents are involved in the illegal exploitation of minerals. According to a United Nations Security Council committee report from February 2015, minerals have become the Taliban’s second biggest source of income, after illegal narcotics. In addition to Taliban insurgents, Islamic State, which is attempting to gain a foothold in Afghanistan, seeks to tap the country’s poorly monitored mineral resources to fund their operations in Afghanistan, Iraq, and Syria. Through these illegal mines, millions of dollars are funneled into the pockets of armed groups, insurgents, and strongmen, while only a tiny fraction of the wealth generated from these projects has gone to benefit the Afghan people so far.
In a country plagued by corruption, a lack of institutions, and the absence of effective governance coupled with the problems of hostile neighbors, ethnic divisions, and active insurgency, without a comprehensive plan and necessary precautionary measures, the extraction of Afghanistan’s mineral resources could result in instability, corruption, and violence, even making illegal armed groups stronger. The resource curse strikes countries without strong institutions and effective rule of law. The curse has affected many countries, and in some instances, has even sparked violence. However, despite the current security challenges and economic conditions, President Ashraf Ghani believes that mineral wealth could prove to be a crucial source for independent revenue and a means to reach the long-term goal of self-reliance.
During the first telephonic conversation between Ghani and U.S. President Donald Trump, mining was one of the subjects of discussion. Ghani, a former finance minister and World Bank official, has suggested mining as an economic opportunity. Now the White House is considering sending an envoy to Afghanistan to explore the possibilities of investment in the mineral sector.
For the current U.S. administration under Trump, who is business-oriented, minerals are probably the most appealing part of Afghanistan. Exploitation and investment in the mineral sector of Afghanistan will not only help the country in its economic independence but will generate thousands of jobs for Americans and Afghans alike, and will give U.S. companies access to rare-earth minerals, a resource which has mainly been monopolized by China to date.
However, mining in a country like Afghanistan, which has spent decades riled by conflict, will not be easy without a strong commitment from the Afghan government coupled with strict policy measures by the United States to put pressure on Pakistan to help in curbing the ongoing insurgency. In order to exploit minerals successfully and create a conducive environment for American companies’ investment, in addition to a robust presence and public diplomacy, winning the hearts and minds of the people will be necessary.
Ahmad Shah Katawazai is the Defense Liaison at the Embassy of Afghanistan in Washington D.C. Katawazai has a Master’s degree in international relations and a second Master’s in Global Security Studies from Johns Hopkins University. Katawazai is also freelance writer; the views expressed are his own. You can follow him on Twitter at @askatawazai.
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