Minerals Can Secure Afghanistan's Future
M. Ashraf Haidari
July 7, 2010
In mid-June, an article in the New York Times revealed to the world something
that many Afghans already knew: Afghanistan sits on about $1 trillion-worth of
minerals. Afghans are now hoping the news will help the government attract
much-needed foreign investment.
On July 20, the Afghan government will host the first International
Conference on Afghanistan in Kabul. At the conference, Afghan officials intend
to outline a national development strategy to international participants,
including regional and international bankers and private-sector representatives.
The government's development strategy is organized around five clusters.
Economic growth is one such cluster, focusing on poverty reduction, job
creation, and sustainable development.
The key to achieving each of the above objectives is the extraction and
export of Afghanistan's natural resources to global markets. This would be the
fastest way to earn the revenue the country needs in order to fuel long-term
economic growth. The list of known mineral deposits in Afghanistan is a long
one, including copper, iron, chromium, magnesium, rubies, emeralds, lapis
lazuli, nickel, mercury, gold, silver, lithium, and uranium
At the conference, Afghanistan's ministers of finance and mines are expected
to outline their reform agendas, featuring measures to promote mutual
accountability and transparency. The reforms will aim to enhance aid
effectiveness and foster a friendly and safe environment for capital investment.
Afghanistan's Ministry of Mines and Industries hosted an exhibition in London
on June 25 to promote investment opportunities, as well as answer questions
about the country's legal framework covering the development of natural
resources. Minister of Mines and Industries Wahidullah Shahrani noted that
investment in Afghanistan's mineral sector would entail work in developing
Afghanistan's transportation infrastructure. Such projects would be needed to
get extracted minerals to international markets. But they would also serve as an
important job-creation mechanism.
In a recent interview with the British Broadcasting Corp., Minister Shahrani
sought to address concerns that a massive influx of investment in Afghan
minerals could lead to increased corruption. "We have improved our legislation,
the procedures have been upgraded and we have been getting a tremendous amount
of support from our international partners," he said.
"Whatever contracts would be awarded, all the information will be published,
to make sure that all the relevant stakeholders, civil society and media and
parliament, will have access to the information; to make sure we will have
sufficient amount of the safeguards; to make sure that we will achieve the high
standards of transparency," Shahrani said.
Bureaucratic bottlenecks have been known to impede the conduct of business in
Afghanistan. In addition, there are security issues related to the ongoing
insurgency carried out by Islamic militants. Nevertheless, investors in
Afghanistan enjoy some advantages not found elsewhere in the region. Domestic
and foreign corporations, for example, do not have to compete with subsidized
government-owned businesses. In addition, the Afghan Investment Support Agency (AISA)
serves investors as a one-stop shop for licensing and corporate support.
Foreign investment that spurs job creation could prove a powerful weapon in
the effort to defeat the radical Islamic insurgency. Under the existing
conditions of economic stress and uncertainty, some Afghans have inevitably
turned to the Taliban for wages and some have joined factional militias merely
for food and shelter. Still others engage in opium poppy cultivation to ensure
the survival of their families.
Those opting to become insurgents and poppy growers comprise less than 15
percent of the Afghan population. It would be possible to win a significant
percentage of these people over to the government side, if officials could offer
them decent jobs. And for the roughly 85 percent of Afghans who already support
the government, as well as approve of the international troop presence, foreign
investment and job creation would go a long way toward reinforcing their faith
in the reconstruction process.
Already, some countries have recognized the lucrative opportunities that are
available in Afghanistan. For example, India has invested $1.3 billion in
transportation, healthcare, education, hydro-electricity and electrical
transmission. And China has won a $3.5-billion bid to develop Afghanistan's
giant Aynak copper mine.
The government and people of Afghanistan see the country's abundant mineral
wealth as a way to secure and rebuild their war-ravaged homeland. Afghans are
proud of a historical tradition of commerce and cultural exchange that dates
back to the era of the Silk Road. With each economic opportunity that is
fulfilled, the people of Afghanistan could move one step closer to reconnecting
with the global economy and securing a stable and prosperous future. Foreign
investors can play a major role in helping us fulfill this national destiny.
Editor's note: M. Ashraf Haidari is Deputy Chief of Mission and Political
Counselor of the Embassy of Afghanistan in Washington DC. His e-mail is
haidari@embassyofafghanistan.org.
The above article originally appeared in the
Eurasianet. Reprinted here with permission from the author.
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