sharing in governance of extractive industries

Poverty, mining and conflict in Afghanistan

Afghanistan’s decades long conflict and ensuing destruction has made many of its citizens nostalgic about relative peace under the old monarchy. Today over 39 percent of the population lives under dire poverty rendering them ineffective in many realms of life . Poverty is more prevalent in rural areas because of lack of economic opportunities and insecurity and they have complicated the security situation. The government is acutely dependent on foreign donations, despite 17 long years of international interventions. A lot of the aid money contributed by donors’ community to uplift the citizens out of poverty and enable children to attend schools and have access to health care, have been siphoned off by warlord-turned-political-elites. Now the political elite is seeking rent from the potential of the extractive industries through development of new networks which include shadow actors and characters who oppose the emergence of a strong state in Afghanistan. Fatigued donors have occupied important space to push and engineer decisions on the sector. Some of those decisions are observed to be rushed. These all make the situation complex to untangle and it has been a challenge facing the government.
Most of the contemporary elites of Afghanistan are important partners-in-rent seeking for most of those who extract or want minerals. These elites are born out of the years of anarchy and ill-designed intervention during the old and on-going conflict. In the early years of intervention most of the Afghan elite served various external actors who reciprocated through award of reconstructioncontracts without active monitoring of project implementation and their new-found riches were unprecedented, especially in the light of their survival strategies either under Taliban or fighting them.
The easy donor funding has dwindled since 2012, while the Afghan elite desire for easy cash is spiked by maddening greed. The regional market for Afghan minerals was gradually expanding beyond the traditional commodities such as precious and semi-precious stones to talc, chromite, marble, coal and gold. New actors from within and nine other countries have emerged scavenging for riches in the shadow of the current conflict in Afghanistan. Growing rural poverty has played a catalyst for those elite seeking rent from the sector. There are several thousand sites of illegal mining across the country and most of the workers are local people who carry off laborious works such as extraction, transportation of minerals down the slops or valleys to nearest transportation place. They are often exposed to occupational hazards without any protection. Their best earning is few hundred dollars per month and continue to keep them entrenched in vicious poverty.
The government which is the constitutional custodian of the natural resources of the country, hardly gets any revenues from the illegal mining and manages the smallest amount from legal ones. The state fails in performing its functions because the political elites involved in mining either scare state agents or buy them.
The marauding elite provides the vulnerable local some employment which the state fails to, and this earns them local loyalty. Those operating mines also pay money to local power brokers, local police, local governors, local insurgents shadow administrators, Custom officials, and often protection money to patrons. The rise of mining elite will increase claims over state as entity that should help or at least allow pseudo-ethnic representatives to earn out of state and this  will fragment it further and drift it from its constitutional mandate. This elite has already influenced the governance structures of the mining sector in their favor and reduced state-effectiveness.
Most of the mining sites be it under government control or not, generates revenues for insurgency, corrupt political elite while further pauperizes most citizens. After years of international military-civilian intervention to expand the writ of the state, insurgency is striking with stronger rigor because they are assured financial resources from multiple sources, mining being the second biggest. Local loyalty at mining sites remain fluctuating to people who provide them some livelihood. The ground is set for “resource conflict” and it will expand to other mining areas. Some conflicts are engineered by elite networks to reap benefits in the shadow of instability. In other places insurgent groups either take protection money, fight the state to weaken it.
International companies belonging to major donor countries have shown interest in the sector, which is a good sign, they must take prudent steps especially in the light of the emerging geopolitical aspirations, equation and internal conflict.
The government needs to reorient its thinking and set the rules for investment to be able to exercise its sovereignty over its national assets. Otherwise once big companies set foot in, the government may become dependent on extractive rent and it may not be able to set terms for their operations. The government needs to work on a long-term vision for the sector, responsive legal framework, functioning institutions and coordinated plans and activities, efficient revenue management and sustainable development. Else conflict escalation looks certain.

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