WASHINGTON — Three years after securing a multi-billion dollar contract to develop Afghanistan’s mineral reserves, China has failed to deliver on promises of new roads and electricity for the Afghan people.
China’s $3.4 billion investment in the Aynak copper mine is the largest in Afghan history and, when the contract was signed in 2007, offered hope of development and stability in Afghanistan. With little indication since then, though, that China has made progress on the two coal-fired power plants and roads it promised to build, raising concerns that China may not be the engine the U.S. had hoped would kickstart a legitimate Afghan economy.
“The Chinese have done nothing to contribute to the local economy,” said Tom Lynch, research fellow for Near East and South Asia at the National Defense University Institute for National Strategic Studies.
Afghanistan is consistent with its ventures in other parts of the world. China has proved an unreliable investor in natural resources, rarely contributing to local communities like it promises and often leaving the land scarred with ecological devastation, Lynch said.
“The Chinese have a checkered record at best,” Lynch said. “They don’t deliver, and when they do, they’ve left a trail of heartbreak.”
The U.S. supports the Aynak investment project, and in fact has insisted on such investments from China, Lynch said. But concerns over China’s business ethics and its refusal to provide military support in Afghanistan have some experts worried Chinese investments will create more instability.
With an estimated $1 trillion in untapped minerals, Afghanistan should be the new frontier for Chinese investment. China’s deep pockets and voracious pursuit of energy resources make it an ideal candidate to spur mineral development and generate a legitimate source of revenue for the Afghan government. The Aynak mine, in Logar province in eastern Afghanistan, could add more than $200 million to the Afghan national budget each year and create an estimated 30,000 new jobs, according to the U.S. Institute of Peace.
The Chinese have relied on U.S. and international troops to keep their investors and mining projects safe. While the Chinese are responsible for their own security at Aynak, because they have not sent their own troops Afghanistan, they hire Afghan National Police. U.S. and NATO troops are responsible for building and training the Afghan police.
“Directly or indirectly, ISAF (International Security Assistance Force, the coalition of troops in Afghanistan) is in some way trying to secure Afghanistan for these projects,” said Kenneth Katzman, leading Afghanistan expert at Congressional Research Service, the nonpartisan research arm of government.
China traditionally only sends military outside its borders for United Nations peacekeeping missions. Although U.S. diplomats have asked for Chinese forces in Afghanistan, China has made no commitment to provide military even in a noncombat role, according to a Congressional Research Service report on Afghanistan released Monday.
“I think they’d be very reluctant to do that, especially if they can get the U.S. or other troops to do it,” said Frederick Starr, chairman of the Central Asia-Caucuses Institute, a research and policy center affiliated with Johns Hopkins University. “You could well have a situation where U.S. troops are guarding a Chinese mineral field.”
The war in Afghanistan didn’t stop China from moving quickly and spending lots of money on Aynak, even without military assistance. China is heavily invested in countries of conflict, including Sudan, Angola and Democratic Republic of Congo – all countries where armed conflict is funded in part by mineral reserves.
Allegations of bribery that have since mired the deal have concerned some experts that China’s investments will set the precedent for of corruption in mining contracts, which could further destabilize Afghanistan.
“I think China has been driven by insecurity more than rational economics,” said Steve Coll, president of the New America Foundation and Pulitzer Prize-winning author of several books on South Asia conflict. “It hasn’t always produced the most economical results.”
Experts predicted the Aynak project would cost $2.2 billion, but state-owned Metallurgical Corporation of China made a deal Afghanistan couldn’t refuse. The railway, which is funded by the Asian Development Bank, is in the early stages of construction and will be used primarily to export minerals to China. The deal was “generous to the point where I might not be commercially profitable for China,” according to the Congressional Research Service report.
Former Afghan Minister of Mines Mohammad Ibrahim Adel was ousted after the deal, accused of taking bribes from the Chinese. The U.S. Institute of Peace called for more a transparent contracting process, warning that unfair contracts could fuel more conflict.
Katzman is a bit more forgiving in his assessment of the Aynak deal: “This is Afghanistan. This is not Donald Trump going out to bid,” he said.
China is competing with India for the Hajji Gak mine near Kabul that is said to contain more than 60 billion tons of iron ore, according to Congressional Research Service. The contract could be awarded early next year, when China and Afghanistan will have another opportunity to prove their commitment to creating a mining industry free of corruption. If the Chinese continue scooping up big-ticket contracts, other competitors like India would be pushed aside.
“It would produce intense frustration,” Lynch said.
A little regional economic competition, though, isn’t nearly the threat to Afghanistan security that the Taliban is, some experts argue. Chinese investment practices may have less oversight and transparency than the U.S. would like, but the two countries share the same security goals in Afghanistan. China has grown increasingly concerned about the Taliban spilling over the small border the two countries share, according to Congressional Research Service.
“The Chinese have national interest in stability in Afghanistan,” Coll said. “The more active they are in promoting stability and being concerned about how to contribute to stability, the better off everyone will be.”