Afghanistan Mineral Riches: Beware the Hype

By James Joyner

News that "United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself" should be taken with several doses of salt.
James Risen of the NYT broke the story, which has the security blogosphere buzzing. It gushes,

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys.

While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.

“There is stunning potential here,” Gen. David H. Petraeus, commander of the United States Central Command, said in an interview on Saturday. “There are a lot of ifs, of course, but I think potentially it is hugely significant.”

The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion.

“This will become the backbone of the Afghan economy,” said Jalil Jumriany, an adviser to the Afghan minister of mines.

But, as Foreign Policy managing editor Blake Hounshell points out, the discovery in question dates to 2007, has been widely documented on US government websites for years, and the $1 trillion figure seems to have been conjured from thin air. The Atlantic's Marc Ambinder points to evidence that the Soviets had documented this trove way back in 1985!

Katie Drummond of Wired's Danger Room adds, "it might be prudent to be wary of any data coming out of Afghanistan’s own Mines Minestry," citing a Wall Street Journal report noting it “has long been considered one of the country’s most corrupt government departments."

That this story has gotten front page placement in the country's top newspaper has Mother Jones' Kevin Drum, OTB's Doug Mataconis, and others questioning the timing. Ambinder, noting the on-the-record quotes from the highest levels of the U.S. military, goes so far as to characterize this as "a massive information operation."

Aside from the fact that the news isn't actually new and that there's good reason to believe that the potential benefits are being wildly exaggerated for political reasons, we should also be skeptical of the idea that Afghanistan is going to suddenly leap forward several centuries into modernity by virtue of a natural resource find.

First, as Matt Yglesias of the Center for American Progress notes, it's quite likely that the actual extraction will be performed by non-Afghan companies who bid on the mineral rights at a fraction of their actual value.

Second, given the corruption that is endemic in the Afghan governance culture, it's quite likely that most of the money will be skimmed off the top rather than benefiting the Afghan people.

Third, there's real reason to worry about a developing country relying on resource extraction to build their economy. CNAS senior fellow' Andrew Exum points to Paul Collier's The Bottom Billion and sees dark days ahead for the NATO coalition effort:

Collier describes the characteristics that "trap" countries in cycles of civil conflict: low income, slow growth, and dependence on primary commodity exports. I don't need to tell you Afghanistan has the first and third characteristics in spades, and you may have noticed that Afghanistan has already been in a pretty miserable cycle of civil conflict since the PDPA coup in 1978. Does this resource find make civil war more or less likely? The statistics, I'm afraid, suggest the former.

The presence of civil war is not reason alone to give up on Afghanistan and bring the boys home. I have previously argued that yes, Afghanistan is in a civil war, and that we should take sides in that civil war to advance U.S. and allied interests. That's basically what we are doing today. But counterinsurgency strategies rest on the assumption that you can eventually weaken anti-government forces and reduce levels of violence to the point where a political process can take place in more peaceful circumstances. We now have one trillion fresh reasons why this assumption might not be valid for Afghanistan.

The Washington Independent's Spencer Ackerman, noting that "Afghanistan’s economy is based around opium and foreign aid," agrees:

[I]n emerging and underdeveloped states, weak legal systems and official corruption create incentives for powerful people to exploit those resources, rather than allow mineral wealth to fuel national renewal. Think Congo or Sierra Leone. It’s easy to tick off the ways in which what political scientists call the “Resource Curse” applies to Afghanistan: a tenuous legal structure; warlordism; war; foreign interventionism; corruption throughout the political system; an uneasy and unstable relationship between provincial and national authorities; and an uneasy and unstable relationship in provinces and districts with instruments of local governance as well as national governance.

Let's hope that retired Green Beret and DoD senior executive Pat Lang is right that "the lives of ordinary Afghans will be profoundly changed perhaps for the better." After decades of war and centuries of poverty, it would be wonderful. But a lot needs to go right for the rosier side of the perhaps to come true. And there's not much in Afghan history that would lead me to bet on it.

James Joyner is managing editor of the Atlantic Council.