Abstract
According to a joint research study by the Pentagon and the United States Geological Survey (2017), Afghanistan has an approximated USD 3 trillion worth of untapped minerals.171 The economic potential in Afghanistan is immense. Essential to modern industry, the minerals of Afghanistan can help eventually transform the country into one of the most important mining centers in the world. With some 1400 mineral fields containing iron, copper, gold, coal and natural gas, partnership and investments in exploration and development of these reserves sectors can bring an economic revolution not only in Afghanistan, but the entire region as well. China, Iran, India, Pakistan, Russia and Central Asian states (CARs) are economically engaged with Afghanistan, while Afghanistan is also a part of Central Asia, West Asian and South Asian regions politically. However, due to regional politics, Afghanistan's potential as a transit hub has not been fully utilized. Its trade with Pakistan is around USD 1.2 billion. India is the third largest trading partner for Afghanistan with a trade value of USD 900 million and investments over USD 3 billion. Unfortunately, political instability and war in Afghanistan have forced 42 percent of the population to live in poverty, as unemployment rates have increased to 40 percent and rapid population growth at the rate of 2.3 percent places pressure on service delivery. Regional politics, especially proxy wars by regional and global players, have mainly impeded the exploitation of this economic potential. Regional cooperation is a key part of managing a successful transition in Afghanistan in order to promote increased trade and connectivity within the region, creating links across the region to external markets, and also enabling broader integration with large regional markets and the global economy. This however, is subject to comprehensive security and stability in the region.
Keywords: Afghanistan, Economy, Minerals, Trade, Conflict, Regional Security.
Introduction
Security has been a central concern in Afghanistan. Historically, Afghanistan has been a battlefield for almost every superpower of the time. In continuation of the 19th century Great Game, the Soviet Union invaded Afghanistan in 1979 to keep communism alive, and since then the country has gone through one crisis after another. In the post-Cold war era, Afghanistan has again been a center of regional and international politics, particularly by the United States of America. The world's great powers, regional powers, neighboring states, and non-state actors are today actively involved in Afghanistan for their collective, national and organizational interests. In spite of the abundance of natural resources and huge economic potential, Afghanistan's land is being used as a ground for proxy wars by foreign forces.
Afghanistan is located in the heart of the Central, West and South Asia having a significant geopolitical and geostrategic position in this region. It has the potential to connect the regional countries for trade and commerce. Afghanistan also provides a gateway to the Central Asian Republics which are rich in oil and mineral resources but are landlocked. The regional instabilities and hostilities are not allowing these ambitious dreams to come true.
The mistrust between Afghanistan and Pakistan and Afghanistan's claim over Durand Line is one of the major and salient hurdles in the regional integration. The Indo-Pak arch rivalry and their competition for influence in Afghanistan is another major issue to deal with. At the same time, China also emphasizes on regional stability in order to foster its Belt and Road Initiative (BRI).
China is so far the biggest investor in Afghanistan's minerals wealth. According to the United States Geological Survey Chinese investment is valued USD 1 trillion. 172Its political strategy is also well in sync with its economic policies of regional connectivity. This has been successfully promoted through Shanghai Cooperation Organization (SCO) which will help it lead its position in the region. China is of the view that the regional countries should take the initiative and settle Afghanistan issue rather than depending upon the US.
However, Kabul-Delhi friendship is certainly detrimental for the national interest of Pakistan since India and Pakistan have age old acrimonies delved in the history of their creation. Moreover, Pakistan's desire to promote regional connectivity through CPEC which would eventually facilitate the Central Asian states also gets affected.173 Pakistan's role in the War on Terror (WoT) mainly targeted towards Afghanistan had also been active throughout. As a non-NATO ally of the US and the West though, Pakistan vitally provided logistic support to the NATO forces and sacrificed more than 65000 lives, both civilian and military in its WoT.
Though, the lineage of the US and the West towards India lacked appreciation initially, making it difficult to frame an affective regional policy, yet the recent developments of recognizing the option of Pakistan to negotiate with the Taliban for the peaceful resolution of the Afghan issue is getting due respect. Nevertheless, the issue of Kashmir between India and Pakistan remains a jugular strain for any ensured regional stability. It keeps the regional harmony paradoxical. Unless there is a permanent resolution of the issue according to the UN resolutions to establish the right of selfdetermination desired by the people of Kashmir, peace in the region will continue to be threatened. Both India and Pakistan are nuclear powers and a major war between the two is unthinkable. The only strategic option would remain the proxy war through instable Afghanistan. India has already made enormous economic investment in Afghanistan to sway their loyalties against Pakistan.
Mineral wealth of Afghanistan: Myth and reality:
Intertwined with the political interests of the region, Afghanistan has significant mineral resources adding natural gas, oil, iron, copper, ore, lapislazuli, emeralds and rubies and number of rare earth minerals.174
Iron ore, copper and niobium are valued $420 billion, $274 billion and $81 billion respectively. Other minerals are also important, and their value ranges between $0.1 billion and 50.8 billion. Among all these, the most significant minerals discovered are the Rare Earth Elements (REE) worth nearly $7.4 billion.175 These include elements that are used in the manufacture of electric items such as superconductor alloys, super conductor magnets, lasers, TV picture tubes and batteries for mobile phones, laptops and desktop computers. Some of these minerals are even found in mines for gold, silver, copper, lead and iron. Uraniam was found in the Badakshan gold mine, for instance, as well as in Haji-Gak, Daykundi mines, and Dusar-Shaida mines.176
Afghanistan has a great potential to be a huge mineral exporter also, however, its vast mineral resources like petroleum and natural gas remain unexplored in the absence of developed infrastructure. Similarly, Afghanistan's marble, lime, gypsum, coal, salt and natural gas have not been able to be refined to make them usable. Success of the mineral sector in Afghanistan can play a huge role in the success of the state required to ensure the security and stability of the region. A huge development budget is needed to uplift the country's economy.177
Impediments for exploiting economic resources
I.Internal, regional & global
Seventeen years have passed since the Bonn Agreement, under which a new interim administration was established in Afghanistan, it is still faced with insecurity and violence. More than 50 percent of the Afghan population lives in poverty. Unemployment is at its peak. The country's rapid population growth places pressure on service delivery and the number of young Afghans joining the labor force far outstrips the number of available jobs.
Declines in grant assistance accompanied with the drawdown of international security forces, the demand to exploit the mineral resources is weakened and led to a broad and sustained economic slowdown. While much progress has been made, institutions do not adequately mediate competition and conflict over resources, protect property rights, or keep citizens safe. International evidence shows that building strong institutions takes decades and requires specific political conditions that are difficult to generate. So, how can one hope that the abundance of resources will do well to the country and its people when there are so many challenges that are yet to be dealt with? A few of them are as following.
II.The security situation
Thousands of Afghan civilians laid their lives for the country in post 2002. The causality rate increased manifold particularly after 2007 adding a yet another perspective during Afghan peace dialogue.According to UNAMA, the death toll recorded 3800 in the year of 2018.178
Internally displaced persons are also a huge problem in the country because it is almost impossible to restore peace with such huge numbers of displaced persons. Economic progress of a country is largely dependent upon the establishment of the rule of law and peace. This requires an effective governance system. Government cannot be effective without the writ of the State so that it can convince citizens that their lives and property are protected. This credibility is necessary for the development to take place. The biggest challenge to Afghan peace is to end the hold and power of local and private militias that are spoiling the whole peace process for their own little benefits. It is needed to rebuild the Afghan economy which involves a shift from activities that are illegal to those that are legal and from a low-productivity informal economy to a high-productivity formal economy. For instance, the negative impacts of the decade's long conflicts have been affecting Afghan agriculture since 1979. Unless it is revitalized only then it has a potential to do miracles.179
Undoubtedly, the ongoing Afghan peace process is a fresh air in the prevailing uncertainty about the future and peace in Afghanistan. Yet, the dialogue between US and Taliban, in Qatar, is also prone to failure because of their conflicting agendas. Taliban want the exit of the foreign forces from Afghanistan and for that they want a timeframe. Besides, they want the names of their leaders be removed from international terrorist lists and release of their friends from prisons. On the other hand, US is still not willing to give a deadline for the withdrawal of its forces. The US insists on Taliban to cease their militant attacks in Afghanistan, at least as long as the talks are going on, and talk to Afghan government. This is not acceptable for the Taliban. They are also not agreeing to stop attacking forces. Moreover, they think of the present government as a puppet of the US. Since they are militarily in a better position and are willing to negotiate. Hence, with this backdrop chances of security improvement in Afghanistan are minimal. It totally depends upon the future agreement between the Taliban and the US and its post-effectiveness in Afghanistan. The intra-Afghan dialogue is also vital for any peace process.
III.Political uncertainty and bad governance
The hurdle in Afghan peace process is the insurgencies by the local and private militias. Introducing democracy in Afghanistan is the biggest challenge for the US. This would be possible only if all the stakeholders in Afghanistan are made to engage for a workable solution. The US have forgo of its objectives if it genuinely desires to restore peace in the war torn country of Afghanistan.180
The governance crisis is quite obvious and far from being tackled with. Absence of stable governance will always cause chaos in the country. The government has failed to provide the basic necessities of life to its people. The security is also precariously affected. Law and order is nowhere to be seen. Justice system has been crippled too. The rule of Kabul is only limited to the urban centers which is only 30-40 percent territory of the country, rest is under the Afghan Taliban. The projects of infrastructure are not being carried out by the indigenous government. The economy is totally based on the foreign aids. Only the poppy is doing the best for Afghanistan in terms of revenue and the remittances that come from the Afghan diaspora based in foreign countries. Corruption, nepotism, favoritism is rampant in all the sectors of the country.181Education and health speak of their sorrows as well. There is no cancer or cardiac related hospital in Afghanistan. The patients have to move to Pakistan or India for their treatments. Negligence of such basic amenities may cripple Afghanistan to make best use of its mineral wealth which after all needs financial support in abundance.
IV.Corruption
Already, corruption is yet another major stumbling block in the way of the best usage of the mineral resources of Afghanistan. Although corruption is a major, or even the biggest issue in all the underdeveloped countries, but the South Asian nations have been badly impacted by it. Similarly, Afghanistan has a very bad reputation when it is seen from this angle. There are several reasons for this rampant corruption. The state institutions that are responsible for the accountability and check and balance are all involved in financial and moral corruption. This moral corruption is responsible for the overall collapse of national institutions in Afghanistan.182 It is a question mark now that how the corrupt institutions can end the corruption in the country.
Similarly, weak law and order is the basis of all present-day hurdles in the country. Corruption is in every department and it causes the overall collapse of the national institutions of the country and here it is needed very much for the US to install a capable and neutral government.183 In short, the accountability in the governance areas of Afghanistan is not only currently absent but it is not foreseeable in the coming future either. So, it is safe to say that the prevailing level of corruption will remain a huge impediment in the way of the exploitation of economic and mineral resources of Afghanistan.
V.Sustainability in Afghanistan
Economy could only be sound and development-oriented if it is sustainable.184 So, Afghanistan's biggest economic challenge is finding a sustainable source of economic growth. To date, the World Bank has committed more than $4.4 billion for the development projects. The Bank-administered Afghanistan Reconstruction Trust Fund has raised more than $11.4 billion.185And the economy of the country is mostly foreign aid-based economy. Currently, the US and the European countries are funding Afghanistan while keeping the financial dependence on the whims and moods of the donor countries. Moreover, this unpredictability is vitally connected to the rule of Trump in the Oval house. He may take the decision to either withhold or withdraw all kinds of civilian and security aid to Afghanistan,
VI. Unskilled Human Resource and Environmental issues in Afghanistan
Like other resources, natural, mineral and energy resources, human resources have a huge role to play in a nation's economic wellbeing.186Undoubtedly, Afghanistan is blessed with numerous natural, mineral and energy resources, though unexploited and untapped. Yet, these will not help Afghanistan become a prosperous country unless it has its own human resources. The unskilled human resource must be transformed into a skilled resource.187 Besides, Environmental conditions also are taken into consideration while predicting about the economic potentiality of Afghanistan. The harsh winters may be an obstacle in their way of exploiting resources.
VII. A view of Afghanistan's Economy
After the invasion of US and its NATO allies in Afghanistan the infrastructure of the country was built because of the commitments of coalition members for the development. Every member took special interest in the development of Afghanistan and its people because of the notion that durable peace can only be achieved through proper human development. Now the 7.8 million Afghan children are attending their schools with the ratio of girl students being 38%.188 Afghanistan was the most rapidly developing country in the last two decades. Because of the US and its allies' presence in the country, the overall poverty of the Afghan population went down manifolds.189US has spent approximately a trillion dollars in Afghanistan but it is very unfortunate that Afghanistan is still lagging behind in every sphere in terms of development. Political instability is directly linked with the growing economy hence a stable government in the country can boost the economy to a great extent and that too in a good and sustainable way. Furthermore, due to the adverse economic condition of the country, there is a high probability that Afghanistan will fall into another disastrous civil war post-US withdrawal. There seems to be no international plan for the growth of Afghan economy after US and NATO exit. Afghanistan needs a long lasting economic plan backed by IMF, World Bank and other financial assistance agencies of the present economic world and a well formulated plan for reconstruction and rehabilitation based on strong national institutions.
VIII.The "Afghanistan to 2030" Report
This report highlights a set of priorities for economic development in Afghanistan, taking ongoing fragility as a given.190 The report answers the following questions:
* How can Afghanistan overcome its current economic slowdown?191
* How can the government, businesses, and households' best manage the risks associated with fragility?192
* What kind of growth model can achieve development needs in the context of ongoing fragility and resource constraints?
* How can economic development priorities be financed?
The report finds that the right combination of policies and continued international assistance can help Afghanistan achieve sustained high rates of growth despite ongoing fragility. This would require policy measures to support households and businesses deal with the risks of insecurity. It would also require a balanced growth strategy, involving increased public spending on human capital, improved agricultural productivity, and the mobilization of new investment in the extractives sector.
China, India, CAR's, Pakistan and Iran
IX.China's investment in Afghanistan
China has shown its strong political, economic and security-based interests in Afghanistan. Afghanistan is rich in terms of natural reserves. China is trying to gain access to these natural resources like Aynak copper and oil reserves, providing economic aid and thus improving political relations. Shanghai Cooperation Organization (SCO) is playing a part in addressing security problems of Afghanistan.193
China in Afghanistan is the largest foreign investor since 2010 by increasing its economic aid and investments. Matallurgical Corporation of China (MCC) has pledged USD 3 billion to develop Aynak copper mines194. China's most vital investment in natural resource sector is in Amu Darya oil field in the north of Afghanistan. In December 2011, China National Petroleum Corporation won the tender to drill three oilfields for the period of next 25 years at Amu Darya River Basin.43 Under the conditions of the agreement, in the start, CNPC will invest approximately 400 million dollars in the exploration of oil and it may generate the revenue of $7 billion, for the country.195
X.India's investments in Afghanistan
Since the US invaded Afghanistan in 2001, India has been actively supporting the Kabul government by contributing around $3 billion in the past 18 years. India has paid for Afghanistan's new parliament building.196 In order to deepen its ties with the worn torn country, India has also built Shahtoot Dam and an AfghanIndia Friendship Dam which has an installed capacity of 42MW and irrigates 75,000 hectares of land. Furthermore, India has also built two additional power sub-stations at Charikar and Doshi to service the 220kV electricity Transmission Line from Pul-e-Khumri to Kabul at Afghan government's request and has constructed the Chimtala power substation located in Kabul. India is heavily investing in Afghanistan's infrastructural projects; Zaranj-Delaram road project was financed and completed by India. It has also upgraded telephone exchanges in some provinces and has expanded the Afghan National television network. Recently, Indian firms have shown interest in acquiring the contract of mining Afghanistan's iron ore deposits located in the central district. State run Steel Authority of India (SAIL) could invest up to US$6 billion in the mine, railroads and a steel plant in a race with China to lock in raw materials for two of the world's fastest-growing economies.197
On the development side, India has built a dozens of schools in Afghanistan, reconstructed the Indira Gandhi Children's Hospital in Kabul, gifted hundreds of buses for the Kabul's transportation system, 10 ambulances for public hospitals, Mi-35 and Mi-25 choppers for the Afghan Air Force.
XI.Pakistan's investments in Afghanistan
Pakistan's contribution in settling down the Afghan crisis had been multi-dimensional and is historically linked. As a neighbor on its western borders, Pakistan shares more than 2000 km long porous border which remained approachable to the nomad tribes from both sides. The cultural linkages dominated the political culture in the tribes living on both sides of the border. The division of the Pashtun tribe claims the age old bonding which remained fluctuating during different time period due to the political architecture of the governments. Pakistan's security policies have also delved invariably in its relations with Afghanistan.
However, ever since 1979, due to the Soviet invasion of Afghanistan and then the coming of the US to check their percieved expansionist designs, Pakistan had always played a frontline role enhanced dramatically after 9/11. The political and logistic support given to the Afghans in the pre and post War on Terror (WoT) is incomparable since Pakistan has lost more than 65,000 lives. Similarly, it had suffered an economic loss worth $120 billion. Pakistan is still providing its diplomatic platform for intra-Afghan as well as US-Taliban dialogue to restore peace in Afghanistan which has been scuttled since the recent past. However, if the peace talks resume between the Taliban and the US and if no consensus is reached between the two on any future government set-up, than there is likelihood that the utility of the minerals resources located in almost twenty-four different mining areas in the country that need to be developed would also become controversial. Occupation of these resources could be instrumental in fueling the fire at both local and regional level rather than for the prosperity of the Afghan nationals.198
Afghanistan is already facing multiple problems including terrorism, instability, corruption, weak institutions, poor governance and lack of revenue sources. In view of the political and economic history of the country, Afghanistan is likely to suffer from continued instability and chaos.
For centuries, Afghanistan remained famous for its unique resources of semi-precious stones. Jewelry and famous pigment represented the Afghan image for a long time in the old history. It can be assumed that Afghanistan must be a true hub of many minerals and country's image can be boosted with some efforts in a short time.199Given the variety of these resources and their abundance beneath the soil of Afghanistan, all these minerals have remained unexploited owing to the decades old unrest in the country. If both the state and non-state actors and regional countries and extra-regional players in Afghanistan find a peaceful solution by replacing violence and war with peace and development, it would have better chances to benefit from the mineral wealth as a major economic contributor.
Conclusion
It is very clear for all stakeholders that without a stable and visionary government, no peace process and peace talks can be initiated. Stability in Afghanistan will boost the overall economic condition of the country. An independent foreign policy is also needed to uplift the country on all institutional grounds. More jobs will bring peace as well, since employment opportunities can create brotherhood and mutual understanding among the youth of Afghanistan. It is also important to mention here that there are many illegal businesses being run by younger citizens of Afghanistan, and the international community needs to work on solutions and provide legitimate and legal jobs that enable the youth of Afghanistan to earn sustainable livelihoods. There is a huge financial gap that must be taken seriously by the country itself and its international friends. According to the World Bank, Afghanistan received much aid throughout the war on terror but due to corrupt political elite and weak administration systems, it could not benefit the economy. Now if the country needs to boost its capital, it should install a transparent and viable system that is efficient and can perform these tasks.200
If trade with Afghanistan by neighboring countries increases, it will also directly affect the country's economy. Boosting the exports of this landlocked country is also an important next step. After all, even though there are so many problems facing Afghanistan, a strong relationship with its regional countries is likely to be an ultimate solution to rescue the country's economy. Pakistan has the biggest market where Afghan goods can be sold, but this relationship is dependent on Afghanistan's desire and will to emerge out of the sphere of Indian influence and play a positive role in the region for itself. India is playing with the economics and integrity of Afghanistan, and the sooner that Afghans realize this, the better it will be for their future.
The private sector of Afghanistan can also assist the economy but it also needs the attention of the government. Investors are applying a 'wait and see' strategy, and biding their time so that they can invest in this country only when its stability and security is certain, since economics are directly linked with the restoration of peace.201 Now, nearly 75% of Afghans are getting their living from the field of agriculture,202 and more employment opportunities are needed in diverse areas for them to sustain the economy.
Improvement in agricultural methods will also help poor farmers improve their lives.203 It is unfortunate that many development proposals were floating everywhere in last two decades but these reached no conclusive outcome. Now there are many development projects again that are pipelined but their success, sustainability, and effects depend on whether the government in Afghanistan has the capability and capacity to take advantage of them. Afghanistan needs real and sustainable economic plans rather than the short term and catchy political ones. The people require long term and useful projects but international community has to play an improved role in this regard. There is a plan of railway construction in Afghanistan which is more political sloganeering than having economic objectives. All stakeholders need to understand the need of the Afghan people rather than participating in political stunts. Providing suitable employment will, in the end, engage the youth in more realistic ways and ensure that they are turned away from the attraction of joining extremist forces. Skill development programs are the need of the hour in Afghanistan in this regard, as unemployment is one of the major factors which lead the youth towards terrorism. International friends are ignoring the skill development programs that can play a role in peace as well as the local Afghan economy.
Lastly, the Afghan people need assured and reliable commitments from the international community that they will keep investing in the country. They have already had a bad experience of the Afghan war of 1980s where after the decade long destruction, every world power left Afghanistan unhealed. The world has made many promises with the Afghan people for construction and development programs but these all promises must be guaranteed and reach fruition. Afghanistan is now standing alone again, with the US and NATO leaving it without any surety. The current US President is not reliable as it is not certain whether he will keep spending on Afghanistan after US withdrawal. Pakistan can play a very constructive role as a guarantor but the challenge is Afghanistan's tilt towards India. India cannot play a positive role in this peace process because it does not have any prime interest and stake in the landlocked state. India's only interest in Afghanistan is to destabilize Pakistan though Afghan territory.
Pakistan must be part of the Afghan peace process and future economic development. Pakistan's progress and stability is directly linked with the stability of Afghanistan so no country can be more serious about Afghan development then Pakistan.
Afghanistan needs billions of dollars for construction and development and the international community can meet these needs, but this also requires sincerity and commitment with the Afghan people. President Mr. Ashraf Ghani and Chief Executive Mr. Abdullah Abdullah need to learn from past experiences and should strengthen their bonds with Pakistan for mutual assistance and development. Pakistan's presence in the Afghan peace process is vital and Pakistan is always ready to help out its neighbor in times of need.
171Mariam Amini, "At stake in US military efforts to stabilize Afghanistan: At least $3 trillion in natural resources "CNBC, August 17, 2017
172 Erica S. Downs, China buys into Afghanistan, Brookings, Washington, February21, 2013 https://www.brookings.edu/research/china-buys-intoafghanistan/
173 Olivier Roy, "Afghanistan: Internal Politics And Socio-Economic Dynamics And Groupings,"UNHCR Emergency & Security Service, March 2003
174SulemanYousaf, "Afghanistan's Mineral Resource Potential: A Boon or Bane"? Journal of Current Affairs Vol. 1, Nos.1&2: 86-109, p.88.
175 Ibid
176 Ibid
7 Karine M. Renaud, The Mineral industry of Afghanistan, USGS, 2013 https://s3-us-west-2.amazonaws.com/prdwret/assets/palladium/production/mineral-pubs/country/2014/myb3-2014af.pdf
"178 The world bank in Afghanistan", World Bank, http://www.worldbank.org/en/country/afghanistan/overview 179 The positive impact of EU support to Afghanistan's agriculture sector,https://eeas.europa.eu/headquarters/headquartershomepage/60117/positive-impact-eu-support-afghanistans-agriculturesector_fr, 23/03/2019
180 Ibid.
181 Ibid.
182 Charles Tiefer, "IG Report Shows Afghanistan Failing To Fight Corruption", Forbes, June 6, 2018, https://www.forbes.com/sites/charlestiefer/2018/06/06/ig-report-showsafghanistan-failing-to-fight-corruption/#8b2fca05f26d
183 J.P. Lawrence, "Afghan anti-corruption program is corrupt, US officials say" November 9, 2018, Stars AndStripes, https://www.stripes.com/news/afghananti-corruption-program-is-corrupt-us-officials-say-1.555894
184 M.F. Moonzajer, Sustaining Afghanistan's Economy, January 5, 2015, , Foreign Policy, https://foreignpolicy.com/2015/01/05/sustainingafghanistans-economy/
185 The World Bank In Afghanistan, https://www.worldbank.org/en/country/afghanistan
186 Mohammad SamimHalimyar, , Pajhwok Afghan News, May 24, 2018, https://www.pajhwok.com/en
187 Ibid.
188 https://issuu.com/unicefusa/docs/afghan_report_rm_final-april_25_web
189Shubham Chaudhuri, Afghanistan: Learning from a decade of progress and loss, End poverty in South Asia, October 17, 2018
190"Afghanistan to 2030: Priorities for Economic Development Under Fragility", The World Bank, August 6, 2018, https://www.worldbank.org/en/country/afghanistan/publication/afghanistan-to2030-priorities-for-economic-development-under-fragility
191 Ibid.
192 Ibid.
193Noor RahmanTahiri, Afghanistan and China Trade relationship, MPRA, October 22, 2017 https://mpra.ub.uni-muenchen.de/82098/1/MPRA_paper_82098.
194Supplemantry Resettlement Action Plan for MesAynak Copper Mines Afghnistan Extractives for Development,"Islamic Republic of Afghanistan , Ministry of Mines and Petroleum, May 26, 2018
195Ibid
196 "US Says It Supports Indians Continued Involvement In Afghanistan," Gandhara, November 22, 2019
197 "Indian firm bid billions for Afghan iron ore mining contract," Reuters, September 15, 2011
198 Ibid.
199' A brief history of geological studies in Afghanistan', www.bgs.ac.uk/AfghanMinerals/About.htm
200 William Thomson, "The Impending Afghan Funding Gap" 02 May 2013, International Policy Digest, https://intpolicydigest.org/2013/05/02/theimpending-afghan-funding-gap/
201 "Boosting Private Sector Development and Entrepreneurship in Afghanistan", Policy Insights, http://www.oecd.org/eurasia/competitivenessprogramme/central-asia/Boosting-Private-Sector-Development-andEntrepreneurship-Afghanistan-2019-EN.pdf
202 Ibid.
203 William A. Byrd, "What Can Be Done to Revive Afghanistan's Economy" US Institute of Special Report, https://www.usip.org/sites/default/files/SR387What-Can-Be-Done-to-Revive-Afghanistans-Economy.pdf
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Abstract
According to a joint research study by the Pentagon and the United States Geological Survey (2017), Afghanistan has an approximated USD 3 trillion worth of untapped minerals.171 The economic potential in Afghanistan is immense. Essential to modern industry, the minerals of Afghanistan can help eventually transform the country into one of the most important mining centers in the world. With some 1400 mineral fields containing iron, copper, gold, coal and natural gas, partnership and investments in exploration and development of these reserves sectors can bring an economic revolution not only in Afghanistan, but the entire region as well. China, Iran, India, Pakistan, Russia and Central Asian states (CARs) are economically engaged with Afghanistan, while Afghanistan is also a part of Central Asia, West Asian and South Asian regions politically. However, due to regional politics, Afghanistan's potential as a transit hub has not been fully utilized. Its trade with Pakistan is around USD 1.2 billion. India is the third largest trading partner for Afghanistan with a trade value of USD 900 million and investments over USD 3 billion. Unfortunately, political instability and war in Afghanistan have forced 42 percent of the population to live in poverty, as unemployment rates have increased to 40 percent and rapid population growth at the rate of 2.3 percent places pressure on service delivery. Regional politics, especially proxy wars by regional and global players, have mainly impeded the exploitation of this economic potential. Regional cooperation is a key part of managing a successful transition in Afghanistan in order to promote increased trade and connectivity within the region, creating links across the region to external markets, and also enabling broader integration with large regional markets and the global economy. This however, is subject to comprehensive security and stability in the region.
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1 is a Research Fellow at ISS, Islamabad





