Wednesday, July 21, 2010

Could Afghanistan's minerals bring more than wealth?

It was recently discovered that Afghanistan has 1 trillion dollars worth of precious metals underground. This news whetted the appetites of the US government and its corporations, and they are moving to again gain more control over the country. But as we have seen with other countries rich in minerals remain they still remain largely poor and greatly violent. So what is to prevent Afghanistan from reaching the same condition?

From this op-ed piece in the New York Times, Paul Collier states the problem ahead for Afghanistan and gives some suggestions.

Indeed, security in Afghanistan could easily deteriorate as a result of the discoveries, as it has not only in Congo but also in Nigeria (rich in oil) and Sierra Leone (diamonds). Afghanistan’s huge veins of iron, copper, cobalt, gold and lithium and other metals could end up financing more tribal and ideological warfare. Greed might stoke violence among the combatants, and attract more Afghans to fight. Consider how in Sierra Leone diamonds enabled the Revolutionary United Front to evolve from a protest movement into a lethal diamonds racket.

Most important, Afghanistan must see that its citizens who live near the mineral deposits benefit — with jobs and spending on public works. Nigeria is a prime example of what happens when the local population pays the price for extraction without reaping the rewards. Oil drilling in the Niger Delta has created few jobs for local people but caused hundreds of spills, ruining their ability to make their traditional living from fishing or agriculture. Politicians have pocketed most of the oil revenues. As the residents of the delta realized that outsiders were profiting from the destruction of their land, gangs formed to kidnap oil workers and sabotage pipelines.

To avoid such fallout, Afghanistan should follow the example of Botswana, which has used diamond revenues to build roads, power lines and schools, raising the economic standard of the country from very poor to upper-middle income. Malaysia, likewise, has used revenues from tin and oil to diversify its economy and create jobs — building, for example, a manufactured exports zone in the impoverished region of Penang.

Afghanistan is part of the last frontier for resource discovery — one of the 60 most impoverished countries, which account for around a quarter of the earth’s land but which have barely been prospected. Over the next decade, given high world commodity prices, the last frontier will be explored, creating more opportunities like that in Afghanistan. All these countries will need to resist the kind of plunder that has characterized resource-rich countries with weak governance.

No comments: