WASHINGTON — Ever since the significant potential of Afghanistan’s mineral resources was assessed by the U.S. Geological Survey in 2007, U.S and Afghan officials have hoped that the country’s untapped deposits would fundamentally transform the Afghan economy one day. However, experts say the road ahead is still fraught with difficulties as frequent insurgency attacks and rampant corruption continue to plague the country.
According to USGS, Afghan mineral deposits consist of huge veins of iron, copper, gold and critical industrial metals like lithium that are expected to last well over a century. The country is also endowed with gemstones such as emerald and ruby. Ambassador Eklil Hakimi said the mining industry could provide half a million jobs and $3.7 billion in revenue to the Afghan people by 2026 as energy giants worldwide are starting to make investments.
Still, experts say it is likely to be decades before real improvements are seen. They say the lack of infrastructure and security will impede the process because a lot of resources are in remote regions where various groups, including the Taliban, will either demand a share or attack the mines.
“In places where you don’t have the Taliban insurgency, you have other sources of insecurity,” said Vanda Felbab-Brown, a fellow with the Brookings Institute, a non-profit public policy organization in Washington. “The companies are easy targets of extortion.”
The United States, China and India are the leading investors in the country. The Metallurgical Corp of China signed a contract in 2008 to develop the huge Aynak copper mine south of Kabul, which is expected to start producing in 2014.
Experts also question how foreign investment can truly benefit people in Afghanistan and revitalize the country’s private sector. They say that profits are more likely to be divided among Afghan ruling elites. The absence of legal protection also deters private companies from participation.
“The rule of law is minimal. It is non-existent really,” Felbab-Brown said. “Many companies are more worried about the lack of rule of law and the lack of clarity than security.”
With the help of the World Bank, Afghanistan is strengthening oversight of its mining sectors. According to the Afghanistan Ministry of Mines, the sector is being regulated through the Minerals Law of 2008.
Both U.S. and Afghan officials said progress helps attract more foreign investments so that the mines can help pay for part of the country’s operation costs. Currently, the country’s war-bedraggled economy is largely based on opium production and aid from industrialized countries.
“The fact that Afghan minerals and mines can pay for some of their forces and security is a huge benefit to Afghanistan people,” said Alisa Stack, principal deputy director of the task force for business and stability development, a group formed by the Department of Defense to promote economic stabilization and security in Afghanistan. “What we see on the security side is the Afghan National Security force is improving and able to handle a lot of the security risks on their own today.”
However, Felbab-Brown said many Afghans felt the country would collapse again after the U.S. and NATO forces’ scheduled exit in 2014 and this prevailing feeling makes investment even more difficult.
“Corruption is strengthened by the sense that security will not be maintained after 2014 and there will be a civil war,” she said. “Many Afghans believe in making as much money as you can before 2014 when everything collapses. It doesn’t mean it will happen, but many Afghans believe that.”
Will Rogers, a fellow with the Center for New American Security, a Washington think tank, said Afghanistan’s sustainable growth means more than developing mines, which he said is only a short-term solution.
“They really need to diversify their economy in order to avoid the resource curse,” he said.