Alloyed Good News From Afghanistan - The American Spectator | USA News and Politics
Alloyed Good News From Afghanistan
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This morning’s New York Times report on the discovery of “$1 trillion” in mineral deposits is not easy to interpret. It’s certainly not all good news, if it’s even news at all. 

As Michael Yon points out, it’s not exactly breaking news to people who have spent time in Afghanistan that the country is rich with untapped mineral deposits (and it’s also worth noting in the Times article that the geological report mentioned is itself several years old). Yon wonders about the timing of the article, given the background of increasingly discouraging news about the war in Afghanistan:

Is this truly all new to us, or just something shiny being rolled out? 

Not taking this at face value. This might be hype campaign to cheer us up during the economic and war woes.

Foreign Policy‘s Blake Hounshell (h/t: Matthew Yglesias) has similar reservations. Hounshell explains that, among other items in the story, the claim that the identified deposits contain $1 trillion worth of minerals could use a second look: 

Nowhere have I found that $1 trillion figure mentioned, which Risen suggests was generated by a Pentagon task force seeking to help the Afghan government develop its resources (looking at the chart accompanying the article, though, it appears to be a straightforward tabulation of the total reserve figures for each mineral times current the current market price). According to Risen, that task force has begun prepping the mining ministry to start soliciting bids for mineral rights in the fall.

Don’t get me wrong. This could be a great thing for Afghanistan, which certainly deserves a lucky break after the hell it’s been through over the last three decades.

But I’m (a) skeptical of that $1 trillion figure; (b) skeptical of the timing of this story, given the bad news cycle, and (c) skeptical that Afghanistan can really figure out a way to develop these resources in a useful way. It’s also worth noting, as Risen does, that it will take years to get any of this stuff out of the ground, not to mention enormous capital investment.

In other words, even if there truly are that many minerals that would sell at a high market price under the ground, they would still need to be dug up — they’re not nearly as valuable in the mountains of Afghanistan as they are in hand and market-ready. 

But would it really be good news if Afghanistan has just now discovered an enormous amount of valuable mineral resources? It’s not obvious that it would, for a few reasons. 

One is that countries like Afghanistan, with weak (or nonexistent) political and economic institutions, are vulnerable to resource curse. One would think that the unexpected discovery of commodities would be a windfall for countries, but in practice it rarely works out well for a number of reasons, the most immediately relevant being that vast riches of resources breed corruption, which stunts the growth in other sectors and undermines political and social order. 

As Hounshell relates, Afghanistan still hasn’t managed to learn how to use cement effectively:

According to an article in the journal Industrial Minerals, “Afghanistan has the lowest cement production in the world at 2kg per capita; in neighbouring Pakistan it is 92kg per capita and in the UK it is 200kg per capita.” Afghanistan’s cement plants were built by a Czech company in the 1950s, and nobody’s invested in them since the 1970s. Most of Afghanistan’s cement is imported today, mainly from Pakistan and Iran. Apparently the mining ministry has been working to set upfour new plants, but they are only expected to meet about half the country’s cement needs.

Why do I mention this? One of the smartest uses of development resources is also one of the simplest: building concrete floors. Last year, a team of Berkeley researchers found that “replacing dirt floors with cement appears to be at least as effective for health as nutritional supplements and as helpful for brain development as early childhood development programs.” And guess what concrete’s made of? Hint: it’s not lithium.

If they can’t make cement, it seems pretty doubtful that they would manage their newfound minerals prudently. And Hounshell also points to a recent WSJ article explaining that Afghanistan’s Mines Ministry is already known as one of the most corrupt and irresponsible departments in the country. 

Another reason to think that the discovery of mineral wealth in Afghanistan isn’t good news is that it pits U.S. interests against Chinese interests, a consideration that’s mentioned in the article. At this point China has a track record of winning development contracts by underbidding Westerners who insist on certain neoliberal niceties

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