Profits from Afghanistan’s mineral wealth may not be so obvious | Opinions

In late August, the interim Taliban government signed several contracts worth $6.5 billion with foreign and domestic investors to develop part of Afghanistan’s mineral wealth. As the country grapples with a struggling economy and the legacy of decades of war and conflict between great powers, these mining deals could generate much-needed revenue and employment opportunities.

But they also raise serious questions about the country’s sovereignty, the integrity of natural resources, the environment and the preservation of cultural heritage.

These agreements appear to be a double-edged sword: Afghanistan could benefit dramatically – or it could fall into the same trap as other resource-rich developing countries, to the detriment of its people.

The potential for economic development

In a country ravaged by years of conflict and instability, foreign direct investment (FDI) in sectors like mining presents itself as a lifeline. Afghanistan faces a high unemployment rate that leaves many of its citizens struggling to find stable employment and make ends meet. In this context, foreign investments in the mining sector could create direct employment opportunities in mines as well as jobs in ancillary sectors such as transport, services and manufacturing.

Beyond job creation, FDI brings technology transfer potential. By partnering with foreign companies experienced in advanced mining techniques, Afghanistan could benefit from a significant transfer of technology and skills, which, in turn, would strengthen the country’s technical capabilities and industrial know-how .

The Afghan economy relies heavily on agriculture, making it vulnerable to climate change, market fluctuations and external economic shocks. The influx of mining investment could contribute to much-needed economic diversification. By diversifying into sectors other than agriculture, Afghanistan can mitigate its vulnerability to various risks and lay the foundation for a more robust economy.

The biggest obstacle remains economic sanctions imposed by the West, which have had the unintended effect of consolidating the Taliban’s power base in the country. Sanctions have led to an increase in illicit activities and have had the effect of marginalizing women from public spaces, schools and workplaces.

FDI in mining and other sectors could counterbalance the negative impact of these sanctions by reintroducing legal economic activities that could bring local prosperity and perhaps contribute to social reforms.

The challenges of resource exploitation

However, an injection of foreign capital does not come without conditions. The experience of other developing countries has shown that large-scale resource extraction often gives disproportionate power and influence to foreign companies, sometimes at the expense of local communities and governance structures.

Such arrangements could potentially undermine Afghanistan’s self-determination and cast a shadow over its long-term well-being.

Additionally, the possibility of mining contracts being held for speculative purposes remains. For example, some companies that have acquired mining privileges may choose to postpone the actual extraction process, pending an increase in raw material prices or more advantageous circumstances. If this scenario were to occur, Afghanistan would have effectively relinquished its authority over its natural resources without obtaining immediate benefits, putting its economic stability and autonomy in a more precarious position.

But even under optimal conditions, when investors follow through on their commitments, realizing the full economic potential of large-scale mining projects requires many years due to a multitude of variables, including extensive geological testing, construction of facilities critiques and the establishment of operational standards. In other words, the expected economic benefits may not materialize in the short term.

Another challenge related to mining deals is ensuring fair distribution of benefits among Afghan citizens.

Acting Minister of Petroleum and Mines Shahabuddin Delawar said at the contract signing ceremony last month that mining contracts were fully transparent, emphasizing the prevention of illegal mining activities and smuggling.

But the involvement of senior Taliban officials in the Afghan mining sector raises multiple concerns. Skepticism reigns over whether revenues generated by mining will benefit the entire population or whether they will be concentrated in the hands of a few.

Another uncertainty remains about the real commitment to responsible mining practices, particularly those that protect the environment. Afghanistan is a water-poor country, and mining activities can exacerbate this shortage by diminishing and contaminating water resources. Such environmental degradation could have a devastating impact on local communities who depend on these resources for their livelihoods.

Furthermore, labor exploitation could occur, as the mining sector could be monopolized by high-ranking officials, who could neglect the welfare of workers without proper regulation and oversight for fair wages and safe working conditions .

As the precise terms of the mining agreements have not been disclosed, it remains to be seen whether the preservation of cultural heritage, Afghanistan’s most critical resource, has been taken into account. Afghanistan is home to a rich history and culture, much of which remains vulnerable to large-scale industrial projects.

One example is the Mes Aynak copper mining project, which has been a development priority for the current and previous governments. The site is located on what was once an ancient Buddhist city, of which some remarkable ruins remain. If extraction at the site takes place without scrupulous compliance with archaeological protocols and without concern for the preservation of cultural heritage, this unique historic site could be threatened with irreparable damage.

The question here is not whether or not Afghanistan should engage in mining, but how it should manage the complexities that accompany such a move. A more balanced approach is desperately needed – one that aligns the imperatives of economic growth with the preservation of cultural and natural resources.

Policy frameworks must be put in place to ensure that financial benefits are fairly distributed among the Afghan population and that there are strict guidelines for environmental sustainability and protection of labor rights. At the same time, concrete steps must be taken to protect the cultural heritage that gives Afghan identity its texture and depth.

The stakes are high and Afghan leaders must tread carefully to ensure that the pursuit of prosperity does not come at the expense of sovereignty, the environment and the well-being of their people.

The views expressed in this article are those of the authors and do not necessarily reflect the editorial position of Al Jazeera.