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Mineral deposits in Afghanistan: treasure or trouble?

By Wei Seng

What a curse!

This article that I read in The Straits Times last week, which comes from the The New York Times, is a news article that highlights the discovery by American government geologists of US$1 trillion worth of "untapped mineral deposits", which promises to "fundamentally alter the Afghan economy and perhaps the Afghan war itself". The mineral deposits found include huge amounts of lithium ("a key raw material in the manufacturing of batteries for laptops") as well as copper, iron, cobalt and gold. While it is heartening to read about optimistic news from Afghanistan, I am not exactly very optimistic about the promises of reaping these reserves. My reason for pessimism? This theory known as the resource curse.

Put simply by Wikipedia, it is "the paradox that countries and regions with an abundance of natural resources... tend to have less economic growth and worse development outcomes than countries with fewer natural resources". According to a write-up on the Global Policy Forum adapted from the Foreign Service Journal, such countries "score lower on the UN Human Development Index, exhibit greater corruption, have a greater probability of conflict in any five-year period, have larger shares of their population in poverty, devote a greater share of government spending to military spending, and are more authoritarian than those with more diverse sources of wealth".

It is suggested that this happens because "the income from these resources is often misappropriated by corrupt leaders and officials instead of being used to support growth and development. Moreover, such wealth often fuels internal grievances that cause conflict and civil war". In the case of Afghanistan in particular, I am very pessimistic that it will be able to break out of this natural resource curse like Norway has done, because of the corruption as well as the high likelihood that rogue groupings will instead gain access to these minerals for malign uses. As I conducted research about the natural resource curse and the news piece, it seems like I'm not the only one with eyebrows raised about the mineral deposits.

In Foreign Policy, Blake Hounshell voices his reservations about the reserves. He writes about the instability of the current Afghan government led by President Hamid Karzai as well as its susceptibility to corruption and extremist Islamist influences. There is additional skepticism over the timing of this article when the Afghan war is going on badly, as well as the estimates of reserves and its worth. In addition, given the huge amount of capital investment needed to dig out those resources and considering Afghanistan's current situation, chances are those resources will remain trapped under the ground. And I shudder to think of the environmental consequences of unearthing all those resources, as much as they might benefit the people of Afghanistan.

Meanwhile in The Christian Science Monitor, Donald Marron elaborates about how the resource curse can afflict Afghanistan. He referenced a lengthy article in The Financial Times that narrates Norway's discovery of oil and how it coped well with the discovery, instead of succumbing to all the "trappings" of the natural resource curse. If Aghanistan can really act like Norway did it how it dealt with the new-found wealth, it would be able to grow healthy and wealthy... otherwise it could just worsen the quagmire Afghanistan is stuck in.