THE EDITORIAL BOARD: Afghan Minerals, Another Failure - nytimes

In 2010, the Pentagon and American geologists estimated that Afghanistan has $1 trillion of untapped mineral deposits, including huge veins of iron, copper, cobalt, gold and industrial metals like lithium. Gen. David Petraeus, who was then the chief of the United States Central Command, said there was “stunning potential” for the war-ravaged country, which by now should have begun to reap much-needed revenue and equally needed jobs.

That development is lagging, and there are growing concerns that $488 million in American aid could be squandered if Washington and Kabul do not take firmer charge of the extraction projects and put regulatory and other reforms in place. America’s troubled attempts to help Afghanistan with its mineral and hydrocarbon industries were reported last month by John Sopko, the special inspector general for Afghanistan reconstruction.

His office found that even after America invested millions of dollars to develop infrastructure and technical skills, the Afghan government “still lacks the technical capacity to research, award and manage new contracts without external support.” Its ability to be self-sustaining in minerals and hydrocarbons seems a “very distant goal,” while many American-financed projects are incomplete.

It is important for Afghanistan to move forward more quickly and smartly than it has. The country depends on foreign aid, which is declining as American troops withdraw, and needs to generate its own revenue. By some estimates, mineral development could produce $2 billion annually in royalties and taxes while oil and gas reserves could be worth $220 billion more.

The American aid went through a special Defense Department Task Force for Business and Stability Operations, which administered 11 projects at a cost of $282 million before Congress shut down its operations in March, and the United States Agency for International Development, which has three programs totaling $206 million. The task force awarded contracts for ventures like mineral exploration and seismic surveys; U.S.A.I.D. is helping reform mining policy regulation and strengthen the ministry of mines and petroleum.

But the report said that there was a lack of overall strategy by the United States and that the task force failed to establish multiyear plans or written guidelines for selecting projects or evaluating them. There was little interagency coordination since the task force answered to the Pentagon rather than America’s ambassador in Kabul, who, for example, learned of a $39.6 million task force project to refurbish a natural gas pipeline only after Afghan officials thanked him for United States support. -  Read More at NYT

Afghan Minerals, Another Failure