Who owns the mineral resources of Afghanistan?


By Farman Nawaz (Daily Outlook Afghanistan)

The mineral resources in Afghanistan if on one side created a hope for Afghans to get rid of waiting for foreign funding, on the other side it also created fears of constant struggle among foreign powers for domination over the region. Soon after the discovery of mineral wealth, the western media is speculating different threats to it.

Some thinkers are of the opinion that Afghanistan, a country full of crisis, will not be able to properly utilize the mineral resources. It will lead to “resource curse”. According to wikipedia “the resource curse (also known as the paradox of plenty) refers to the paradox that countries and regions with an abundance of natural resources, specifically point-source non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources. This is hypothesized to happen for many different reasons, including a decline in the competitiveness of other economic sectors (caused by appreciation of the real exchange rate as resource revenues enter an economy), volatility of revenues from the natural resource sector due to exposure to global commodity market swings, government mismanagement of resources, or weak, ineffectual, unstable or corrupt institutions (possibly due to the easily diverted actual or anticipated revenue stream from extractive activities).” It affects taxation and education sectors specially because the country has enough to spend on its people and on the other hand government does not need to concentrate on education for development.

Some writers suggested Afghanistan government to create Sovereign Wealth Fund (SWF). According to wikipedia a sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. SWFs are typically created when governments have budgetary surpluses and have little or no international debt. This excess liquidity is not always possible or desirable to hold as money or to channel into immediate consumption. This is especially the case when a nation depends on raw material exports like oil, copper or diamonds. In such countries the main reason for creating a SWF is because of the properties of resource revenue: high volatility of resource prices, unpredictability of extraction and exhaustibility of resources.

Western media also expressed fears about the presence of regional players in Afghanistan. Western thinkers are divided over the Chinese presence in Afghanistan. Some consider China a threat to the western interests in Afghanistan while some are seeing China as a careful partner. Some thinkers believe that China will not be sincere in the restoration of peace in Afghanistan. They think that China is also exploiting mineral resources in African countries but it could not change the economical and political crisis over there, while some thinkers consider China a potential partner that can help in changing the destiny of Afghanistan.

But besides all these complexities I think the foremost responsibility of afghan government is to legislate about the ownership, lease, and royalty of the mineral resources. Who will dig out these minerals, when these resources will become a “resource curse”, and when Afghanistan will have plenty of funds and to make Sovereign Wealth Fund, must be secondary priorities for afghan government.  According to the constitution of the Afghanistan the resources are owned by the state. In 2006 some policies were made about the mineral resources in Afghanistan but it can be again reviewed.

The ownership, lease, and royalty of resources will create a very sensitive problem for Afghanistan in the future because here in Pakistan we have experience of this. Today our Baloch brothers are angry and in the same way Khyber Pakhtunkhwa had always complaints about its share in electricity revenue. Sindh also sometimes protests about water resources. In Pakistan in different periods various policies are made about the ownership and distribution of the resources. These policies actually represented the mindset of different politicians and bureaucrats.  What are resources? Who will own it? Where are resources found? These questions are hot topics of our politics and not only hot topics but rather these problems affected our politics. In a way the breakup of Pakistan in 1971, was also caused by such questions.

Today Afghanistan is now a resource rich country but the question is that whether Afghan political system and society is able to utilize these resources. If Afghans will plan in such a way that provinces and districts are given shares in these resources so it can change the scenario of today’s Afghanistan. In this way common people will be aware of the resources allocation and shares and they can easily make their political leaders, tribal leaders, and bureaucrats accountable for that. To get rid of monopolization and illegal profitability, it is necessary to take profit and legislation to lower level. When on lower level people will unite together for their democratic rights so it will solve the problems.

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