Editor in Chief: Moh. Reza Huwaida Friday, November 16th, 2018

Mining and Construction, Two Important Industries to Drive Economic Development of Afghanistan

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Mining and Construction, Two Important Industries to  Drive Economic Development of Afghanistan

Economic prosperity and political stability are inextricable for a country to become prosperous and rich. It has been more than one and half decade that international community and United Nations are assisting Afghanistan in her struggling to stabilize. Hundreds of billions of US dollars were invested in the country during this time for this purpose. Fortunately, the struggle and sacrifices of Afghans have shown major improvement in areas of nation building, relative economic development, reduction in child mortality rate, increased literacy rate and the building of strong defense apparatus i.e. a well-trained and equipped army and police organizations. In order for this process to self-sustain, and to break free from donor and grant relied economy, the President of Islamic Republic of Afghanistan, Mr. Mohammad Ashraf Ghani, has suggested to exploit Afghanistan’s huge minerals, mines, precious stones and petroleum reserves. He proposed to the President of United States, Mr. Donald Trump in January last year to partner in development of extractive industry of the country.
Afghanistan is sitting on important minerals, iron ores, copper mines, precious stones, gold, uranium, lithium, petroleum, gas reservoirs and immense water resources. The iron ore is second in size in the world, and has the best quality. Copper mine is one of the largest in the world. Lithium mines were discovered by United States geological survey team in 2008 and was estimated to worth more than three trillion US Dollar. Compared to population density and geographical land mass of the country, these resources can turn Afghanistan as one of the richest countries in the world. In order to exploit these resources economically, Afghan government should put in place a comprehensive and all-inclusive strategy and plans for development of extractive industry in the country. The strategy should include building infrastructure, such as tunnels, bridges, roads, electricity, rail tracks and residential townships in areas where these underground resources are sitting. In addition, the government should direct Universities to train young students in the fields of mines and extractive industries. One of the ways to do so is to take advantage of the scholarships offered by friendly countries and encourage students to go for mining and extractive industries training. Security is vital for building viable business environment for investors. 
Construction is the second most important industry when it comes to building economically viable extractive industry. It is unfortunate to mention that construction industry in Afghanistan is in dire state. A lot of efforts are needed to bring about standing and strong construction companies which can take on the potential work opportunities presented by mine/extractive industry in the country. In order to address this problem, government of Afghanistan should encourage existing construction companies to join venture with specialized construction companies from friendly countries and take on works as joint ventures. This can bring in skills, knowledge and training for local companies, which can enable them to stand alone and take on existing infrastructure work. Government should take heed of this problem at early stages so that technical and knowledge base is in place by the time major mining and extractive operations begin. It is a shame to see Afghan construction companies failing despite more than one and half decade of construction works opportunities presented by international community since the year 2002. Though it is understandable that a leveled playing field was not provided for business by previous government, still the blame is on construction companies’ owners as they lacked long term planning and missed opportunities to gain and store skills and knowledge, which were available for by the presence of large number of foreign companies and engineers as part of huge international aid and ongoing reconstruction program for Afghanistan.
Keeping in view the challenges before government of Afghanistan to attract large international corporations to develop and economically exploit extractive industry in the country, it is inevitable for government to present profitable plans for investors. Most of the mines, minerals, petroleum, precious stones and gas reserves are located in mountainous, highland regions in the country where there is no infrastructure, electricity, energy, transport root or life support facilities. This would translate into a plan that makes it parts and parcels of any contract for investment on the part of investing companies to build required infrastructure that include roads, tunnels, electricity production plants, and large processing plants in the country in order to make these resources economically viable and build access to neighboring countries ports to commercially export it. This is huge investment and hard for international corporations to swallow if they don’t see attractive offer by government to invest. Therefore, it is advisable for government of Afghanistan to take these points in mind, and offer attractive terms – better than other countries do. But in longer term, Afghanistan can profit from the infrastructure built by these investors, and to use the same connecting roads, tunnels, bridges, rail tracks and plants for other mines located in the same region.
Indian investors have started to invest in the largest iron ore in central highland regions of the country. They plan to invest in building roads, bridges, tunnels, rail tracks to connect to border points for exporting the metal. They also plan to build large processing plants. Also, China has agreed to invest in developing the largest copper mine in the country. They also plan to build large processing plants, bridges, tunnels, roads and electricity production plants. Since Afghanistan is a landlocked country, India has already built a new commercial port in the Chabahar area of Iran, which connects to Nimroz province of Afghanistan and will be used for exporting the proceeds from these mines out of the country. But it has been more than ten years that no major breakthrough in starting to build the required infrastructure has happened. But an ambitious plan to connect the entire country with rail tracks stretching from North to South, East to West and running through mountainous central highland is already in place. Construction of this rail track has already been started at major border points between Uzbekistan-Afghanistan, Turkmenistan-Afghanistan, Iran-Afghanistan and a future construction of road and rail track at China-Afghanistan border.
By putting a strong management process and a viable, multi-dimensional strategy in place for building mine/extractive industry; and to bring about a strong construction industry to partner in the process, government of Afghanistan can take advantages and benefits from its huge mines, minerals and petroleum resources to support ongoing nation building and improve quality of lives of its citizens. Also, by bringing about a centralized extractive sector in the country, government can easily get rid of the present illegal mining, extraction and exploitation of these important national resources by warlords and terrorists in the country. Peace will ensue when economic development takes place.

The author is the emerging writer of the Daily Outlook Afghanistan. He can be reached at mg.sahibbzada.ceo@kainaatgroup.af

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