China – the first mover in Afghanistan’s resource war
As 2013 enters its last lap, the departure of US and ISAF combat forces in 2014 will prove a pivotal moment for Afghanistan. Ravaged by war for more than 30 years — and despite all of its present political challenges — that star-crossed country stands closer to political stability than at any time in the living memory of its people. But that statement is clearly relative – true only because the modern history of Afghanistan has been so fractured, riven by conflict, not only from outside forces, but internal factions as well.
The question now is whether the end of armed conflict in Afghanistan will be replaced by a Resource War — a scramble to develop the vast mineral resources of the country, with minimal transparency in government policy, and little attention to delivering broad economic benefits to the Afghan people.
In fact, this Resource War has already begun. Afghanistan, even now, is choosing its economic partners, whether they be the industrial democracies — or whether its rulers will turn elsewhere to forge the country’s economic future, with China, Russia, India, and even Iran.
Indeed, China is the first-mover in the Afghan resource space, having won the massive copper concession at Aynak in Logan Province — with routes to the mining project patrolled up by US and British troops — and China oil giant CNPC pumping the first Afghan crude under a 25-year contract, concluded in late 2011. Most recently, Chinese President Xi Jing Ping declared 2014 a “key year” for Afghan-Chinese relations, and when Xi met with Afghan President Hamid Karzai, the Afghan leader’s two advisors were the Minister of National Security and the Minister of Mines and Petroleum.
One headline neatly captures the symbiotic relationship: “Afghanistan Has What China Wants”
This will be no replay of the 19th-century “Great Game,” with Russia and British expeditionary forces mired in local conflicts with Afghanistan’s contending mountain clans. This modern battle for post-conflict Afghanistan will unfold not so much in the choke-point mountain passes or even the halls of government, but in the boardrooms of the world’s major mining and energy companies. Companies from the US and the industrialized democracies, assisting with — and investing in — Afghanistan’s resource development, could bring shared commercial benefits and provide the economic basis for strengthened political and strategic ties.
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But this new Resource War will be the economic equivalent of what military planners call asymmetrical combat: On one side, state-backed — explicitly or implicitly — enterprises with non-transparent capital structures, controlled to varying degrees by Moscow, Beijing, New Delhi, or Teheran. On the other, a myriad of private mining multi-nationals, putting their own capital at risk, accountable to shareholders, with some degree of well-wishing from governments in Ottawa, Canberra, London, and Washington — but nothing remotely approaching the state-backing of their competitors.
The prize is vast, with Afghanistan’s potential mineral wealth running into the trillions of dollars. Indeed, even in the midst of war, the USGS and British Geological Survey completed extensive resource mapping of Afghanistan — supplementing earlier work done by Soviet geologists. In fact, 96% of the country has been mapped using the most advanced technologies (hyper-spectral imaging), giving the Afghan Ministry of Mines and Petroleum an incomparable tool in prioritizing the most promising prospects, and allowing private sector partners to approach development with a wealth of technical knowledge, even before exploration and resource delineation takes place.
The challenge now is to communicate this tremendous potential to the industrialized democracies — and to the private sector mining and energy companies with the expertise to develop these resources. The outcome will dictate whether Afghanistan becomes an integral member of the international community and global economy, or slips back into the cycle of conflict, chaos and domination that have so tragically shaped its history.
Afghanistan’s Resource War can have several outcomes. The country’s resource riches can stay in the ground, as conflict at ground-level surges with the departure of US and NATO forces. Resources will be extracted, in a process that is opaque, with benefits flowing to well-placed officials with diminished impact on the Afghan economy. Or resources will be extracted under a transparent, market-based and rule-bounded process, with the benefits radiating out through the broader Afghan economy, in ways that will lift millions into better lives.
Forget the troop withdrawals of 2014. The next Afghanistan War has begun.
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