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Cursed Treasure?

cartoon from Bruce Beattie, Creators Syndicate Inc.

Afghanistan’s future outlook has been turned upside-down. With the discovery of an estimated $1 trillion in untapped mineral deposits, the country has something to celebrate for the first time in many, many years. The deposits, located in some of Afghanistan’s most politically unstable regions, include huge veins of iron, cooper, gold, cobalt, and lithium (used in the manufacture of batteries for laptops and BlackBerrys), creating the possibility that Afghanistan could become a global mining center. The possibilities seem endless. More than $34,000 for every Afghan man, woman, and child and the arrival of unlimited amounts of FDI surely amount for a celebration. However, the reality may be more worrisome.

With corruption and insurgency plaguing the country on federal and local levels, the discovery of valuable commodities may only exacerbate Afghanistan’s problems. Under the current regime, it is likely much of the mineral wealth would be diverted and abused. Conflicts between mineral-rich provinces and the federal government seem more likely than cooperation. Like the conflicts over “blood diamonds” and oil in Africa, valuable commodities can often paralyze a country.

The effects of the mineral discovery will have regional and global implications. The untapped mineral wealth will surely intensify competition for investment between powerful regional players like China and India. Two Chinese firms have already committed themselves to a $4 billion investment in a major copper mine, south of Kabul, representing the biggest non-military foreign investment in Afghanistan to date. Afghanistan’s Ministry of Mines has stated that bidding could begin as early as this fall. According to  Pentagon representatives, because the Afghan Ministry of Mines is not ready to manage this process, the U.S. will be assisting the government agency. This will be a partnership ripe for conflict. If Afghanistan is able to ensure better security, competent management, cooperation, and control over government corruption, the country could benefit greatly from its new-found mineral wealth. Unfortunately, that’s a lot of “if’s”.

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