A $1 trillion business in Afghanistan’s future?

Afghanistan is an unfortunate nation that has been in a state of war for decades. It is a largely lawless and very dangerous country ruled by militants, criminals and tribal leaders (who are often also criminal). The former Soviet army could not tame this country and the U.S. military and their allies are finding it to be a tough task as well. Most of the people in Afghanistan are not well educated and do not possess many marketable or trade skills (perhaps other than cultivating opium, used to make heroin). Add to this, perhaps their biggest problem which is corruption in all facets of the country, including but limited to, the government.

However, recently there has been perhaps the most positive news to ever come out of the war-torn country. Experts from the U.S. have looked at some old Soviet data and surveyed the Afghan land with sophisticated equipment and now believe that Afghanistan holds important mineral reserves worth an estimated $1 trillion. That’s right; I said trillion, with a “T”. To look at this in perspective, the Afghan economy pumps out about $13 billion annually and a lot of that comes from the opium trade.

Early tests show that Afghanistan may have enough Lithium reserves to be the world’s top producer of the important metal. Their reserves also appear to be quite diverse with enough iron and copper to make Afghanistan among the world’s top producers of both elements. There are also gold reserves in the country, as well as, other important minerals. Obviously, Afghans know close to nothing about mining and the infrastructure needed to extract these minerals are likely decades away, but the potential is real and very large.

The key to utilizing the potential of this country has little to do with business forces or technology and all to do with politics. There are many parties that would be interested in controlling these reserves such as: the Taliban, China, various tribal leaders and obviously, the U.S. The absolute best case scenario for Afghanistan would be if the United States was able to effectively control the development and operations of these mines. They would be the only ones that would bother to build the Afghan economy more than just the reserves like educating the population and aiding the development of the entire country. They would also be the only ones that would even think about developing the mines in a relatively eco-friendly way.

China, on the other hand, would likely not even harbor a thought about the environmental or socio-economic factors that the Afghans would end up facing as a result of all this. By having China control these mines, it would also make Afghanistan tied exclusively to one country that is still developing and not nearly as stable or proven as the United States. The U.S. would also be able to export to other countries from these reserves to China and other countries, allowing Afghanistan to diversify its customer base- a very important business strategy.

The worst case scenario is the Taliban fighting even harder now due to this revelation and gaining control of the future mines. I won’t get in to why this would be bad because it should be painfully obvious to everyone. The tribal leaders controlling the mines would also be a terrible situation for many of the same obvious reasons as the Taliban. If the U.S. and everyone else involved plays their cards right, the war in Afghanistan and the future of the economy of Afghanistan can be a huge success story that no one in the their wildest dreams could have imagined. For this to happen however, the Afghans need a lot more of the luck they had when these reserves were discovered.