Monday, June 14, 2010

Mineral Wealth in Afghanistan

by Richard Crews
Afghanistan is a poor and primitive country. Although it has about one-fifteenth the land area of the U.S. and one-tenth the population, the GDP (the overall economic output) is less than one-one thousandth that of the U.S. Much of the social and political structure is reminiscent of Europe during the Middle Ages with feudal warlords controlling small territories. The economic relationship with the industrialized world is largely based on three activities: opium production, narcotics trafficking, and foreign aid. There is little modern infrastructure--very few roads, rails, or communications resources, and little in the way of education, sanitation, health care, or emergency services.

Some international attempts to eradicate opium poppies have failed because there is, frankly, no substitute cash crop. Although there have been some attempts to introduce farming of various fruits and commercial flowers, without their poppy crops feeding into the base of international narcotics trafficking, small farmers barely grow enough vegetables and farm animals to sustain themselves.

The recent revelation that there is enormous mineral wealth underlying scattered areas of Afghanistan changes this picture. There are huge undeveloped veins of iron ore, copper, cobalt, gold, and several other metals of industrial importance. Afghanistan has the potential to become a major international mining resource. It can attract foreign development capital by the tens and hundreds of billions of dollars. (China has already contracted for tens of millions of dollars of copper ore.)

The crucial question is whether a central Afghan government (with international help) can administrate the development of these resources without bleeding off so much of the wealth through corruption and mismanagement that the country's infrastructure and the health, wealth, and happiness of the Afghan people gain rather little.