Journal of Political Risk, Vol. 9, No. 6, June 2021
By Priscilla A. Tacujan
Various players have raised the prospect over the years of Afghanistan developing its mineral wealth as a means to stabilize the country, but nobody believes that it could achieve enough security to prevent attacks on infrastructure and mining operations. However, it is possible that Afghanistan might be able to broker peace and reconciliation through a mineral revenue-sharing scheme that directly distributes mining dividends and profits to the general population as well as extract concessions from the Taliban — an approach that has helped mitigate conflict in some other war-torn areas where revenue-sharing has been part of their peace accords. A trickle-down incentive structure could incentivize the Afghan people and militant groups to pursue peace and reconciliation if they become vested stakeholders and direct beneficiaries of their country’s natural resources. While security conditions in Afghanistan’s extractive industries remain a challenge, a review of successful revenue-sharing practices in other countries suggests that a similar practice in Afghanistan may yield long-term gains.
Background: Afghan Minerals and Stakeholders
The Task Force for Business and Stability Operations (TFBSO), commissioned by the Department of Defense (DoD) to study Afghanistan’s extractive industry, has estimated that Afghanistan’s mineral and hydrocarbon deposits could be worth more than $1 trillion, with $908 billion in mineral resources and more than $200 billion in hydrocarbon deposits, while the Afghan government has a more optimistic estimate, at $3 trillion. The U.S. Geological Survey has also indicated that Afghanistan may hold 60 million tons of copper, 2.2 billion tons of iron ore, 1.4 million tons of rare earth minerals such as lanthanum, cerium, and neodymium, and lodes of aluminum, gold, silver, zinc, mercury, and lithium deposits as large as those found in Bolivia, known for owning the world’s largest lithium reserves, Several assessments conducted by U.S. agencies and international organizations have concluded that these resources have the potential to contribute significantly to Afghanistan’s economy. Continue reading