In Afghanistan, a Threat of Plunder

By PAUL COLLIER
NYT

Oxford, England

THE news that Afghanistan has $1 trillion in unmined mineral deposits has been met with some pessimism. Now, it is said, the country will be transformed from its present condition into the next Congo, whose new wealth from gold, copper and other minerals has brought mainly corruption and violence.

Indeed, security in Afghanistan could easily deteriorate as a result of the discoveries, as it has not only in Congo but also in Nigeria (rich in oil) and Sierra Leone (diamonds). Afghanistan’s huge veins of iron, copper, cobalt, gold and lithium and other metals could end up financing more tribal and ideological warfare. Greed might stoke violence among the combatants, and attract more Afghans to fight. Consider how in Sierra Leone diamonds enabled the Revolutionary United Front to evolve from a protest movement into a lethal diamonds racket.

In eastern Congo, $1 billion in gold is being extracted and exported annually, yet because the government lacks control over the territory the revenues for the national Treasury last year were a mere $37,000. If the Afghan government ends up with the same proportion, that treasure of natural resources would finance only a handful of helicopters.

How can Afghanistan ensure that its people benefit from its mineral wealth, and avoid resource-induced violence? There is a chain of decisions to get right, from managing the prospecting to investing the revenues. Many other countries have failed to make them wisely. Afghanistan can buck the trend by learning from their mistakes, and from the success of the few countries that have managed their riches well.

(More here.)