The Discovery of Mineral Resources in Afghanistan: Opportunity or Curse?
An Interview with General Stanley McChrystal
YJIA: In July of 2010, U.S. officials announced that up to $1 trillion in minerals such as copper, gold, cobalt and lithium had been found in Afghanistan. In other developing countries, natural resource discoveries have often been associated with negative outcomes and have led to what economists call the “resource curse.” Do you believe that these resources could further destabilize Afghanistan?
Let me start by giving a little bit of background because I was involved in the discovery and announcement of the resources. First, some of these resources had been known for a number of years, including all the way back in the Soviet era when some of their surveys had identified them. What we did over the last two years was to go out and confirm earlier assessments and also do new assessments. I’m pretty comfortable that the $1 trillion analysis is accurate and that there’s a range of minerals.
I think that anytime you find resources in a country, you’ve got positive and negative [outcomes]. I’ll start with the negative, but then go on to the positive. The negative, of course, is that it opens up the opportunity for exploitation from outside or exploitation from parts inside the country, maybe inequitably. And the other thing, of course, particularly in countries dependent upon a single resource like oil or coffee, is that they have a tendency to become a very singular economy. They don’t develop the other parts of the economy effectively and that really puts them in a long-term spiral to be less competitive.
Afghanistan is in a bit of a different position. First, the resources give them some capital equivalent—they can get some money—and in a country like Afghanistan, $1 trillion is a huge amount of money. Second, it will force the development of some things that Afghanistan needs, like infrastructure. Copper and iron ore take infrastructure like railroads, which Afghanistan never had. Some of the other resources like gold and lithium don’t take quite the same infrastructure, but they will, if done correctly, develop internal expertise in Afghanistan, such as miners and engineers. The resources have a positive in their intrinsic value, but they also have a positive in that they force development.
Another thing I think is very positive is that the resources give the world a greater stake in Afghanistan. As long as Afghanistan is thought of as this mountainous region of warlike people with nothing to offer, nobody in the world has nearly the stake in stability that they do if they think that there are truly important resources available. Suddenly the world would like to see stability because the world wants to see access, and I think that’s a good thing. There are more positives in this case for Afghanistan than downsides.
YJIA: Corruption is one of the greatest challenges facing Afghanistan. Do you think the discovery or extraction of these mineral resources will complicate efforts to establish a more transparent and accountable state?
I completely agree that corruption in governance is one of the biggest challenges. I don’t think that the minerals necessarily complicate the challenge. In fact, in one sense, they bring in foreign buyers and a greater level of scrutiny that over time actually reduce corruption. If you think of a multinational cooperation coming in to buy copper or iron ore or lithium, they are probably going to demand a higher level of accountability. So I think at the end of the day it could be actually very positive. But there’s danger. Whenever you get a lot of money moving around, you get a high return on corruption.
YJIA: YJIA: Do you think there’s the potential for this wealth to contribute not only to economic growth, but also to political stability?
Absolutely. The government needs more resources to work with. Clearly it cannot provide for the people unless it has a basis to do that, and the ability to take and leverage these resources can give them the ability to deliver goods and services to the people—the things people want from their government.
YJIA: What steps must the government or people of Afghanistan take in order to ensure that the future revenue from these resources is reinvested domestically to benefit the Afghan citizens?
This one is tough, and I would say this is a serious threat for any country, but particularly Afghanistan. There is sometimes a tendency in a place like Afghanistan for outside investors to want to come in with a hose, hook it up to the resources, and suck them out, potentially bringing in foreign engineers and workers so that very little is left in Afghanistan for the Afghans. I think this is where the Afghans have to really hold the line and demand jobs, the construction of infrastructure, and reinvestment in education programs that would allow Afghans to develop the capacity to do these jobs. This is key and it won’t happen automatically. I think the government has to step up and demand corporations to do those things, and multinational corporations have to be responsible as well. The international community can help with this, but this will take specific attention.
YJIA: Do you think that the government of Afghanistan has the capacity to make those demands?
I think that they are developing the capacity. It is challenging for them now simply because the government of Afghanistan can come up with the right answer, but sometimes lacks the human capital in terms of bureaucrats and technocrats to implement policies effectively. I think they will need some help doing it.
YJIA: How, if at all, has the discovery of these resources influenced the course of the Afghan conflict and the ISAF mission? Do you think that the counterinsurgency strategy that you helped implement in Afghanistan helps or hinders the development of the mining industry?
I would say they haven’t influenced the course of the conflict yet. One of the ways that I hope it will influence it is, as I mentioned, that it will give the world a greater stake in stability and give Afghans a sense that if they get stability, there is a potential for a more prosperous future. I think that the counterinsurgency strategy helps a lot because it allows for higher levels of security and improvements in governance. Right now, there are a lot of resources that are there but are not economically exploitable because the levels of security just make it too risky. If counterinsurgency reduces that, I think it will help.
If you assume that the counterinsurgency were to fail and the Taliban regime were to take over, then by track record, it would be very difficult to have really good economic development in the country. These resources would probably be delayed in their use for a generation or more.
YJIA: Is it because of the Taliban rule that these resources have not been exploited yet?
I think the Taliban rule was part of it; the civil war was part of it—everybody was just so involved in other things. And I think they needed greater clarity on the resources. They were discovered, but in many cases not everybody believed it and not everybody had the specifics.
YJIA: Two of the resources that have been exploited in Afghanistan are opium and hashish. What efforts have been made to counter their trade? What more, in your opinion, should be done?
The drug trade is relatively new in Afghanistan, fifteen or twenty years old at the most, so it’s not a long tradition. It’s turned out to be very profitable, particularly for the narco-traffickers. The farmers don’t get rich doing this; they never do. But it’s made a lot of money and it’s caused a lot of corruption, as it does in any country where an illegal crop is moved.
There have been a tremendous number of efforts—everything from going out and trying to eradicate the plants physically to trying to provide licit crops or legal crop opportunities for farmers. I have become convinced that you need to do a number of things. First, the farmer is not the problem. When there is a lack of governance or security in an area, the farmer doesn’t have any options because it’s very difficult to raise legal crops if the security situation is so bad that you can’t get your crops to market. So what has happened is that narco-traffickers have made it safer to grow opium, because the narco-traffickers will deliver poppy seeds to the farm gate and pick up the opium paste from it. They make it almost the only option farmers in many areas have, particularly when licit crops cannot get around. So you try to give opportunities for farmers to grow wheat, fruit, pomegranates, you name it, and to do it in a way that they can effectively market them. I’ve become convinced over time that you really need governance and security in an area to do away with the poppy trade. There’s no silver bullet otherwise.
YJIA: Has this factored into the counterinsurgency strategy in Afghanistan?
Oh absolutely, very much so. And the idea is that you go into an area and establish security. You give the farmers the opportunity to grow licit crops and you create the infrastructure so that it can be profitable for them. And that’s really what they would prefer to do anyway.
YJIA: Do you think the prospects of a lucrative mining industry could displace opium production in Afghanistan?
I don’t think it displaces opium, I think it’s slightly different. What I think is that the mining opportunities make for a more prosperous state that allows the government to be a bit stronger, less dependent upon corruption, less at the mercy of warlords and criminals and whatnot, so that it strengthens the entire economy. [The Government] can then put money into things like education, which is desperately important. So it just allows Afghanistan to be a more stable and governed place, which then allows you to reduce things like drug production.
I think you’re talking about something really important. One of the beauties about having some natural resources—and this is not enough to make Afghanistan a resource dependent state by any means—is that it gives them a little more viability. It could reduce, over time, their dependence on the rest of the world, and that’s very important for their pride, it’s very important for their economic development, it’s very important for their respect in the world.