Yes Afghanistan Can

Afghanistan can escape the resource curse that has plagued countries like Congo and Nigeria
Last year, a survey by the Afghan Ministry of Mines estimated that Afghanistan possesses rare earth and other mineral deposits worth a massive $3 trillion. In a country that relies predominantly on foreign aid for sustenance (foreign aid funds 70% of Afghanistan’s budget), the possibility of independent revenue from mining was greeted as big news. A prominent Afghan official even declared that mineral wealth would bring economic self-sufficiency to the country within a decade. However, a protracted insurgency, and structural impediments, like poor infrastructure and corruption have done little to deter global companies from entering the mineral rush in Afghanistan. Two  Chinese companies, the state-owned China Metallurgical Group Corporation (MCC) and Jiangxi  Copper Company  have invested more than $3 billion in the Aynak copper mines in Logar, Afghanistan already. Several Russian and American companies are also preparing to bid for upcoming projects.
Resource Curse?
This influx of money into Afghanistan has however raised more concerns than it has addressed. While war-ravaged Afghanistan needs all the investment it can get, political analysts are now afraid that Afghanistan might fall prey to the “resource curse” that has plagued countries like Bolivia, Democratic republic of Congo and Nigeria. Suffering from the “paradox of plenty,” these countries with vast reserves of natural resources, like oil, cobalt, nickel, gold and other minerals, have developed into rentier states, marked by corruption, clientelism, and inefficient handling of public funds. Already the nascent government of Afghanistan, and in particular the Ministry of Mines, has been tainted by claims of widespread graft, including accepting bribes for awarding the Aynak mines contract to the Chinese. In countries like Sierra Leone and Congo, “conflict minerals” have funded and perpetrated prolonged civil wars, marked by gory violence and destruction. Afghanistan runs a high risk of a similar escalation in conflict if the mineral wealth falls into wrong hands. Most of the mineral deposits in Afghanistan are in the south and east, where the insurgency is strongest. Given the weak central government, and shortage of security forces in Afghanistan, local warlords and Taliban chieftains could easily threaten ongoing extraction projects or even take control of these resources.
Never mind the internal factors, there is also a real threat that increased competition for rare resources could fuel conflict between rival countries in Afghanistan, yet again.  The U.S. has already accused China of unfair bidding strategies and operations.  Chinese involvement in the African continent, meanwhile, indicates that the Chinese are not above subverting concerns of conflict and human rights for economic gains.  Given that rare earth minerals are used in sophisticated military technology, the geopolitical importance of these mineral resources could lead to a serious clash of political and economic interests.
Becoming Chile, not Congo
In an interview to Politico last year, former Afghan finance minister Ashraf Ghani acknowledged the tricky path that lay ahead of Afghanistan: “Either we become Congo, or we become Botswana or Chile.” Given this troubling context, is it likely that Afghanistan will go the Congo way? Likely, yes. But inevitable? No. It is possible for Afghanistan to avoid the fate of other countries suffering from the resource curse. In fact, Afghans, increasingly aware that mineral wealth can exacerbate the cycle of poverty, corruption and weak governance that currently plagues them, are already taking steps in the right direction.
Instead of rushing headfirst into lucrative deals, Afghanistan is treading cautiously, holding road shows from London to Singapore, to attract a diverse group of investors and prevent the concentration of mineral wealth in only a few hands. The Government is also reforming rules and regulations in the mining sector and in 2010 signed the Extractive Industries Transparency Initiative, an international agreement under which companies and governments are encouraged to publish their payment and revenue details.  Clear procedures of law, consistent with international standards in mining, aided by a system of public checks and balances, are needed to ensure that access to resources is fairly regulated. Afghanistan, which has never had a functioning modern state before, is obviously lacking in these fundamentals of political economy. State building is a slow process, fraught with several pitfalls, and most developing countries and young democracies have an acceptable amount of corruption built in them. But Afghanistan’s steps at institutionalizing transparency and public accountability suggest that despite endemic corruption, mineral wealth could lead to greater efficiency in public operations.
Moreover, Afghanistan is tying mineral wealth to development. Afghans have already negotiated the Aynak mining contract with China to include infrastructure development projects. China is now constructing schools, markets, mosques, medical centers and even a  major power plant in Kabul. The project is also likely to generate jobs, civilian wages and government entitlements, making it harder for insurgents to recruit locals (economic deprivation is a leading factor for local support to anti-government forces). Thus, economic development could lead to happier people and a more politically stable state.
Slow, unsteady, but moving on the right path
Are these measures enough? Far from it. Afghanistan’s new government is likely to falter at different steps in securing even the basic essentials of an independent State. But what is encouraging is its self-awareness of potential pitfalls along the way and the willingness of the government to evolve and learn from its past record. Corruption rears its ugly head periodically, but unlike Congo, where the Government blatantly charges on, the Afghan government is stopping (because of international pressure as well as internal outrage) to reassess its path. Just last year, Finance Minister Omar Zakhilwal postponed awarding contracts for petroleum and iron extraction amidst allegations of corruption. The possibility of redressal of ills in the State machinery suggests that Afghanistan is striving to avoid the free fall that states like Congo and Angola had gone into.
A corrupt, resource- rich, unstable Afghanistan would be a nightmare for everyone—including the United States and China. It is imperative for these two countries to recognize the shared need for stability in Afghanistan and co-operate towards restoring political and economic institutions in the country.  In fact, recent events indicate that open market competition between them in Afghanistan could result in positive developments in the country. Thanks to fierce competition between China and the United States, and their willingness to act as whistle blowers against each other, corruption charges were publicly acknowledged and subsequent reforms were instituted in Afghanistan.
Afghans are going ahead with mineral extraction—it’s their biggest hope of an independent economy, one that is not fuelled by opium trade or foreign aid. But corruption could easily jeopardize the progress and throw Afghanistan back by years. The good news is that the actions of the Afghan government are not going unchecked. Domestic protest and foreign pressure is creating new hope that Afghanistan might still escape the resource curse, and after years of crippling destruction, build a sustainable future.