This week, just as things were looking at their bleakest in Afghanistan — growing casualties and the damning report on the links between Taleban leaders and the Pakistani secret service — the Pentagon pulled a rare piece of good news out of the hat: Afghanistan, it turns out, is not only a poppy-growing paradise but also a mining El Dorado. Around $1 trillion worth of minerals has been discovered (says the US Geological Survey) and according to enthusiastic US and Afghan officials, this stunning potential could make mining the future backbone of the Afghan economy.
Well, hooray, then let’s not pull out so hastily, people have begun to say. Perhaps all those lives weren’t wasted; perhaps with the help of this newfound wealth, Kabul can secure democracy and keep the Taleban at bay.
But before we all get too excited, we should ask: is this really such an exciting discovery? Upon closer inspection, in fact, it tells us far more about the politically exhausted state of the American home front than it does about Afghanistan. It’s less a discovery than a desperate tactic: the hawks’ last roll of the dice in their bid to stop Obama pulling out.
Although much of the media on both sides of the Atlantic has taken the hawks’ bait, a little scrutiny shows there’s far less to the mineral strike than meets the eye. The US Department of Defense briefing claims that $908 billion worth of reserves of copper, iron, cobalt, gold and lithium (used to make cellphone batteries) are lying in the ground in Afghanistan, as if they’re just waiting to be exploited. But that’s not how it works. Mining is a difficult business, requiring four key conditions to succeed. Afghanistan, which has no mining tradition, fails on all four counts.
First, mining on a mass scale requires a large capital investment of at least several hundred million dollars per mine and usually many years to pass (even in stable surroundings) for the investment to turn a solid profit. Who is going to be willing to take such risks in a country ravaged by three decades of conflict, with no secure end in sight?
Second, enormous amounts of cheap water and energy are needed for extracting and processing ores. This in a country where droughts are a regular occurrence and less than 10 per cent of the population has access to electricity? Not likely.
Third, mining requires good roads linked to deep-sea ports in order to move the product. A solid infrastructure (including roads or railways) is indispensable — but Afghanistan remains a landlocked country with few decent roads of any sort. Minerals would have to be exported either via the unruly tribal areas in Pakistan to the Chinese-built deep-sea port in Gwadar, or through the Iranian port of Chabahar. Neither of which are very attractive options for an investor.
Fourth, successful mining requires a stable regulatory environment and strong business ties to the local community to enable an investor to plan proper security. This is almost entirely absent in the Karzai era; instead the government is renowned for its corruption. For example, according to US intelligence, the former (and now dismissed) minister for mines, Mohammad Ibrahim Adel, recently pocketed $20 million after awarding a huge $3 billion copper-mining contract to a Chinese government-sponsored company. Beyond the corruption of our supposed friends in the government, there remains the uncomfortable fact that much of the mineral wealth discovered lies beneath or near territory occupied by the Taleban. Who is going to pay them?
Certainly not western mining companies like BHP Billiton or Anglo American. Even if they could countenance it, western mining companies would still have to live with the fear that their engineers and geologists might be kidnapped and killed, their contracts renegotiated or their assets seized by future rulers. Mining requires a long-term bet on the stability of the country where the process is taking place. To put it mildly, a quick look at the history books shows Afghanistan is simply not a good bet for western business.
If Afghanistan does somehow defy these very long odds and succeed in building a thriving mining industry, it probably won’t be with Western partners. Asian investors and Chinese state-owned mining companies in particular are much more likely candidates. China actively seeks, as a foreign policy priority, mineral resources to sustain its high growth rates. At the same time the country is under pressure to find profitable investments for its huge dollar reserves.
This makes China much less risk-averse and explains why it keeps securing mining contracts in conflict-ravaged developing countries (including Afghanistan, where it recently put $3 billion into developing the Aynak copper mine). Significantly, it helps China tremendously that, as opposed to western nations, it has a reputation for being a neutral, business-minded country that makes it a point not to meddle in host nations’ domestic affairs. In a place like Afghanistan, where the only certainty is insecurity, this is a very serious advantage. China can expect to be able to do business regardless of who prevails in the current conflict between the western-supported Karzai government and the Taleban. The same cannot be said of the West.
And even if Afghanistan does successfully develop its vast mineral wealth (unlike, say, the vastly endowed and chronically screwed-up Democratic Republic of Congo), there’s no reason to think this would be to the West’s advantage, or even necessarily to that of ordinary Afghans.
Certainly (we sincerely hope) the Pentagon knows all this. But if so, why have General Petraeus and the Pentagon made so much effort to talk up these discoveries? And why have they decided to release the good news at this precise moment? The Afghan ‘mineral strike’ can only truly be understood as a card played in a game of increasingly high-stakes poker. It’s the hawks in the Pentagon against the war sceptics surrounding President Obama, and we’re heading for the final hand.
The correct historical analogy is with JFK in 1963. Then, as now, a young Democrat President, with his mind on the coming elections, challenged by major domestic initiatives (for the Kennedys it was civil rights, for Obama the Great Recession), increasingly questioned the merits of an unpopular and costly war. Both Kennedy then and Obama now diagnosed their generals with ‘end-state-itis’, a desperate blind desire to finish the nation-building job, whatever the strategic and domestic cost.
And indeed, in a haunting echo of those long-gone Vietnam days, it is an open secret that Generals Petraeus and McChrystal think they will need more time than the President has currently given them to turn Afghanistan around, and are using whatever means they can to maintain the military presence. Beneath all this, a huge political storm is brewing as signs of any success at all in Afghanistan are few and far between. The mineral gambit is a desperate closing salvo designed to convince a war-weary President and public that there is something worth fighting for in Afghanistan; that there is a viable economic basis for the western-led nation-building exercise in the country.
It’s a blow in a much bigger battle too — one between the warring forces which hope to define the very parameters of American international action in the emerging multi-polar era.
John Hulsman is the senior research fellow at the Hague Centre for Strategic Studies (www.hcss.nl). Jaakko Kooroshy is a policy analyst at the Hague Centre, specialising in the politics of resource scarcity.
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