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Foresight as a tool for sustainable development in natural resources: The case of mineral extraction in Afghanistan $ Umar Sheraz n Senior Policy Analyst, COMSTECH Secretariat, 33-Constitution Avenue, G-5/2, Islamabad 44000, Pakistan article info Article history: Received 5 March 2013 Received in revised form 3 January 2014 Accepted 6 January 2014 Keywords: Non-renewable resources Alternative futures Afghanistan Resource curse The Great Game JEL classication: Q28 Q32 D74 L72 abstract This subjective essay uses the six pillars approach of future studies to address the futures of mineral extraction in Afghanistan. The analysis through this methodology is directed at decision makers and stakeholders as they evaluate the role of minerals in the Afghan economy and intends to inform public policies regarding mineral extraction beyond sectoral silo focus. The future space is visualized through the six pillars approach with accompanying methods and by identifying patterns of change. There is a valid risk of greatly over-estimating the economic and strategic opportunities offered by Afghanistan 0 s newly discovered mineral wealth. Afghanistan also risks being infected with the resource curse. The essay concludes with policy recommendations to realize the potential of this gift of nature, most efciently and equitably and to also use them as a means of effective socio-economic development and prosperity. & 2014 Elsevier Ltd. All rights reserved. Introduction In 2010, vast mineral deposits were discovered in Afghanistan, including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium. With reliable estimates of $13 trillion of extractable resources, there is hope and concern sur- rounding this discovery which is being heralded to fundamentally alter the Afghan economy(Risen, 2010). Often buffeted histori- cally by external forces and actors, the Afghan mineral extraction sector implies a special concern about its exploitation and a new risk that may face the country the resource curse.How Afghanistan traces its way forward to a democratic and peaceful future will depend on how it responds to the challenge of harnessing the overall potential for natural resource wealth to meaningfully transform Afghan society and construct a viable socio-economic system. While literature abounds on mineral extraction and its socio- economic implications, there are large areas of disagreement and fragmentation within the research community (Kolstad and Wiig, 2008). This diversity takes many forms, some of which are linked to the linear-sequential mode of thinking employed from an extrac- tive economy versus mineral-utilization economy perspective. As suggested by Inayatullah (2004), predictive futures (linear-sequential mode of thinking) link theory and data and is based on the assumption that the future can be known and that those who posses such knowledge are in the position to colonize the ofcial version of the future. In effect, this means that those who are in a position to make such statements are by default creating an ofcial version of the future, and it is this version of the future that tends to be adopted. Another aspect of the divergence is related to the focus on isolated aspects (technology, environment and society, politics and economy) of mineral extraction. The policy implications from such analysis thereby ignore the global and socio-political implications of this sector leading to misplaced policy interventions (Sheraz, 2010). The contribution of this subjective essay to the body of knowl- edge is the application of six pillars approach of futures studies (developed by Inayatullah, 2008) to the Afghanistan mining scenario. The six pillars approach provides a new means to futures thinking to better understand the processes of change so that wiser preferred futures can be created. The conceptual framework of the six pillars approach with accompanying methods is based on the following questions: Contents lists available at ScienceDirect journal homepage: www.elsevier.com/locate/resourpol Resources Policy 0301-4207/$ - see front matter & 2014 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.resourpol.2014.01.001 This paper is an extension of a conference paper The Futures of Mineral Extraction in Afghanistanpresented at the 10th GLOBELICS International Confer- ence, 911 November 2012, held in Hangzhou, China. n Tel.: þ92 51 9220681-3; fax: þ92 51 9211115/9220265. E-mail addresses: [email protected], [email protected] Resources Policy 39 (2014) 92100
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Page 1: Foresight as a tool for sustainable development in natural resources: The case of mineral extraction in Afghanistan

Foresight as a tool for sustainable development in natural resources:The case of mineral extraction in Afghanistan$

Umar Sheraz n

Senior Policy Analyst, COMSTECH Secretariat, 33-Constitution Avenue, G-5/2, Islamabad 44000, Pakistan

a r t i c l e i n f o

Article history:Received 5 March 2013Received in revised form3 January 2014Accepted 6 January 2014

Keywords:Non-renewable resourcesAlternative futuresAfghanistanResource curseThe Great Game

JEL classification:Q28Q32D74L72

a b s t r a c t

This subjective essay uses the six pillars approach of future studies to address the futures of mineralextraction in Afghanistan. The analysis through this methodology is directed at decision makers andstakeholders as they evaluate the role of minerals in the Afghan economy and intends to inform publicpolicies regarding mineral extraction beyond sectoral silo focus. The future space is visualized throughthe six pillars approach with accompanying methods and by identifying patterns of change. There is avalid risk of greatly over-estimating the economic and strategic opportunities offered by Afghanistan0snewly discovered mineral wealth. Afghanistan also risks being infected with the resource curse. Theessay concludes with policy recommendations to realize the potential of this gift of nature, mostefficiently and equitably and to also use them as a means of effective socio-economic development andprosperity.

& 2014 Elsevier Ltd. All rights reserved.

Introduction

In 2010, vast mineral deposits were discovered in Afghanistan,including huge veins of iron, copper, cobalt, gold and criticalindustrial metals like lithium. With reliable estimates of $1–3trillion of extractable resources, there is hope and concern sur-rounding this discovery which is being heralded to “fundamentallyalter the Afghan economy” (Risen, 2010). Often buffeted histori-cally by external forces and actors, the Afghan mineral extractionsector implies a special concern about its exploitation and a newrisk that may face the country – the “resource curse.” HowAfghanistan traces its way forward to a democratic and peacefulfuture will depend on how it responds to the challenge ofharnessing the overall potential for natural resource wealth tomeaningfully transform Afghan society and construct a viablesocio-economic system.

While literature abounds on mineral extraction and its socio-economic implications, there are large areas of disagreement and

fragmentation within the research community (Kolstad and Wiig,2008). This diversity takes many forms, some of which are linkedto the linear-sequential mode of thinking employed from an extrac-tive economy versus mineral-utilization economy perspective. Assuggested by Inayatullah (2004), predictive futures (linear-sequentialmode of thinking) link theory and data and is based on theassumption that the future can be known and that those who possessuch knowledge are in the position to colonize the official version ofthe future. In effect, this means that those who are in a position tomake such statements are by default creating an official version ofthe future, and it is this version of the future that tends to beadopted. Another aspect of the divergence is related to the focus onisolated aspects (technology, environment and society, politics andeconomy) of mineral extraction. The policy implications from suchanalysis thereby ignore the global and socio-political implications ofthis sector leading to misplaced policy interventions (Sheraz, 2010).

The contribution of this subjective essay to the body of knowl-edge is the application of six pillars approach of futures studies(developed by Inayatullah, 2008) to the Afghanistan miningscenario. The six pillars approach provides a new means to futuresthinking to better understand the processes of change so thatwiser preferred futures can be created. The conceptual frameworkof the six pillars approach with accompanying methods is basedon the following questions:

Contents lists available at ScienceDirect

journal homepage: www.elsevier.com/locate/resourpol

Resources Policy

0301-4207/$ - see front matter & 2014 Elsevier Ltd. All rights reserved.http://dx.doi.org/10.1016/j.resourpol.2014.01.001

☆This paper is an extension of a conference paper “The Futures of MineralExtraction in Afghanistan”presented at the 10th GLOBELICS International Confer-ence, 9–11 November 2012, held in Hangzhou, China.

n Tel.: þ92 51 9220681-3; fax: þ92 51 9211115/9220265.E-mail addresses: [email protected], [email protected]

Resources Policy 39 (2014) 92–100

Page 2: Foresight as a tool for sustainable development in natural resources: The case of mineral extraction in Afghanistan

1. History of the issue and how we got there? History is a usefulindicator of the future and by tracking the grand trends of time,we become clearer on where we are heading.

2. What is your fear of the future? What is your prediction aboutthe future?

3. By changing some of the assumptions, what alternativesemerge which challenge your prediction or fear of the future?

4. Visualizing the future through deepening and creating alter-nate futures. This is done by identifying patterns of changebeyond the most obvious and the superficial.

5. What is the preferred future in the particular context?6. And finally how do you move to your preferred future? What

steps can you take to materialize your preferred future?

Here it is important to stress on a few aspects about futureswork. First of all, the future is about change and walking on anuntrodden path. What is acceptable or unacceptable today, couldbe different tomorrow. Change happens and it is a function of thetrends, acceptable social values, political correctness and othervariables of that time. I cannot think of a better example than theAfghan freedom fighters of yesteryear, many of whom have nowmorphed into the Taliban. Building on this trend, given that Indiaand China (the next super powers) are getting involved inAfghanistan as stakeholders; could the mutated form of theTaliban be blue-eyed boys again in 15–20 years?

Also, with regard to the term ‘futures’, Fletcher (1979) defines itas meaning more than one future, rather many futures. The use ofthe word “futures” is based on an assumption that individuals andcommunities can be empowered to create many different andalternative futures rather than simply accepting an official version.Accordingly, the use of the word ‘futures’ throughout this article,implies that there can be more than ‘one’ future for an organiza-tion/issue, rather there are many futures that can be considered.

The history of the issue

Afghan geology and geography are both consequential in termsof mineral development prospects (TFBSO, 2011); mineral extrac-tion potential remains strong for geological reasons, while thecountry0s geographic location, between the rich oil and gas fieldsof Central and Western Asia and the energy-hungry corridor ofIndia, Pakistan and China, making it a vital transit country forenergy commerce. If the past is any indicator of the future,resource extraction has a tortured history in Afghanistan andcontinues to be a source of concern in terms of physical security,environmental and social impacts and their contribution to socio-economic development (Ali and Shroder, 2011).

The Great Game

The Great Game, was a term for the strategic rivalry and conflictbetween the British Empire and the Russian Empire for supremacy inCentral Asia, with Afghanistan acting as a buffer zone. Recently usageof the expression “the Great Game” has again started making therounds (Sheraz, in press; Malik, 2011; Subramaniam, 2012) which nowhas new contestants: United States, Russia, China, Pakistan and India,and the tussle is over influence with the Central Asian republics andaccess and control over natural resources andmilitary bases. The gameonce again is being played out in the buffer zone – Afghanistan.

The British Empire maintained a comprehensive interest inresources of Afghanistan and first initiated resource assessmentsin Afghanistan in the early 19th century as they searched throughpioneering exploration and military escapades for countries todominate as markets and trading partners (Shroder, 1983). Thiswas done parallel to improve military intelligence on resourcesand topographic detail that would be needed in their Great Game

face-off against the Russian Empire. Afghanistan won its indepen-dence from diplomatic domination by the British following thethird Anglo-Afghan War in 1919, and a short while later, a Sovietpublication on mineral wealth in Afghanistan was published(Obruchev, 1927). The government of Afghanistan tried to enticethe Americans to become engaged in resource discovery and extrac-tion in Afghanistan (Clapp, 1939 as cited in Ali and Shroder, 2011),however, distance from market, economic concerns, and loomingworries about World War II caused rejection of the offer, much to theuneasiness of the government of Afghanistan.

With the US attention on resources diverted elsewhere for thenext four decades, the Soviets collaborated with the AfghanistanGeological Survey, resulting in a detailed mapping of mineralresources in Afghanistan (Abdullah et al., 1980). After the Afghaninvasion of the USSR in 1979, the Soviets were in a position toinitiate resource extraction in Afghanistan and in the mid 1980s,natural gas was pumped across the northern border of the AmuDarya into the USSR and a smelter scheduled for installation at theAynak copper deposit was planned near Kabul (Shroder andWatrel, 1992). However, the increasing resistance of the Afghanpeople and the Mujahidin disallowed any significant developmentof other resources at that time. Instead in 1988–1989, the USSRwithdrew from Afghanistan and in a twist of fate, the Bush Senioradministration closed the US Embassy in Kabul a few years later. Inthe subsequent years, the Taliban stayed away from exploiting themineral riches, although they did show interest in the Turkmeni-stan–Afghanistan–Pakistan (TAP) gas pipeline (Burleigh, 2002).The subsequent invasion of Afghanistan by the USA and its alliesin 2001 began a new phase in the history of mineral resourceexploitation in Afghanistan, as many old resource projects wereassessed again, and new ones were initiated (Shroder, 2009).

Afghanistan0s minerals and the insurgency connection

A thriving shadow economy revolving around precious stonesand recently from minerals and ores such as chromite, coal, goldand iron, has existed in Afghanistan over the past four decades. Thesmall-scale excavation and trafficking of precious stones and othermining commodities has long played a role in organized criminalactivities and fundraising for militant groups throughout the pastfour decades of conflict in Afghanistan (Bhwagwati and Hansen,1973). The mining and extraction of emeralds and other preciousgemstones in the northern provinces of Badakhshan and thePanjshir Valley became a critical source of revenue for the Mujahi-din that fought against the Soviet occupation. In 1992, these mineswere nationalized, earning an estimated $200 million a year fromthe trade in precious gemstones (Schetter, 2002). Following theseizure of state power by the Taliban in 1996, anti-Taliban militiascame to unite under the umbrella group the United Islamic Front,which continued to engage in precious stone extraction andtrafficking in the Panjshir Valley, Takhar, and Badakhshan, allegedlyearning between $60 million to $200 million per year from thetrade (Renner, 2002). Under a barter system, these anti-Talibanmilitias acquired weapons and ammunition from black market armsdealers to fight against the Taliban – exchanging emeralds andother precious stones for weapons (Farah and Braun, 2007).

In 2001, following the collapse of the Taliban regime, illegalmining and its trafficking has surged. It was estimated in 2005 thatnearly 80% of all Afghan mines remain under control of roguecommanders or criminals, with some of these mines being con-trolled by non-state actors since 1992 (Dupee, 2012). Today theillegal mining sector finances the Tehrik-i-Taliban Pakistan (TTP)and Haqqani network, through smuggling operations and “protec-tion” fees for safe routing of illegal mineral resources. Just in theKhost area, illegal extraction of chromite, amounts to one millionAfghanis ($20,695) in lost revenue per day (Mangal, 2010), with

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tons of precious ore smuggled out of Afghanistan, every day. State,criminal and insurgent elements on both sides of the Afghanistan–Pakistan border continue to reap profits from illegal excavationsand cross-border trafficking.

Fear of the future

While evaluating the role of mining in development processes,a recurring debate has been whether the occurrence of mineralwealth represents a “blessing” or a “resource curse”. While conv-entional wisdom would suggest considering an abundance ofresources as the basis for economic growth, poverty reductionand sustainable development, a large strand of empirical researchusing different methodologies, econometric specifications andmeasures of resources supports the contrary (Sachs and Warner1995; Gylfason, 2008; Sala-i-Martin and Subramanian, 2003). Thetrack record of countries with the opportunity to convert resourceabundance into broader development goals is often disappointingand often has not translated into economic prosperity for themasses. In the past decade, the notion of the resource curse hasbeen extended and there is considerable evidence, to indicate howeconomies dependent on natural resources tend to performwoefully in several indicators of human development, such as lifeexpectancy, education, child mortality or in human welfare levels(Ross, 2001; Bulte et al., 2005).

Violence and ethnic fighting

Many resource rich countries are under the shadow of conflictand have the highest levels of poverty, corruption and conflict.Amongst the world0s most mineral dependent states, 11 areheavily indebted and five have had recent civil wars (OECD,2008). In many mineral-rich developing countries, rent-seekingand corruption tend to be widespread, and in the worst cases theappropriative struggle turns into a full-scale civil war (e.g. civilwar in Angola and Sierra Leone over control of precious stones,ironically referred to as blood diamonds). Many civil wars aredecided by the inability of one side or another to keep supplyingitself, even if it controls part of the country. But civil wars fundedby natural resources that can be sold outside the country cancontinue pretty much indefinitely. Historically, resource-richcountries, particularly those that have other characteristics asso-ciated with conflict, such as poverty and low growth, are muchmore likely to break out in civil war.

Mineral resources provoke various kinds of destructive compe-tition: from rebels within, from states without, and betweenowners and workers. As mentioned earlier, parasitic exploitationof Afghanistan0s mineral reserves by militant groups including theTaliban and opportunistic entrepreneurs is already enhancing thewar chests of the Taliban and other armed belligerents. Further-more, corrupt government officials and illicit business practices,such as paying bribes, already exacerbate the situation and willcontinue to fuel corruption for the foreseeable future. In May 2011,Afghanistan0s parliament cited security shortcomings, infrastruc-ture and technicality problems as the most serious obstacles indeveloping Afghanistan0s mining sector (ToloNews, 2011).

Given the history of illegal mining and the use of its profits tofinance the insurgency in Afghanistan, the headlines of lucrativemining contracts between Afghanistan and mining firms fromChina and India, take new meaning. In a country, which has beentorn by conflict, the development of a full-blown mining industrymight take decades, but that could easily translate into decades ofviolent competition. The elected government of Afghanistan islimited in its influence and outside the reach of the weak centralgovernment, tribal and ethnic warlords provide rough governance

and a semblance of stability. The Taliban also provide a kind ofgovernance in the areas they control. It is in their interests tomaintain some degree of stability in the areas where they are inpower, so there is a fragile balance. The excavation and exploita-tion of valuable minerals by multinational companies might wellupset that balance and set off a struggle to control the “protection”fees for safe routing of mineral resources, where the minerals arelocated.

Unrealistic expectations

On the news of the discovery of an abundant natural asset,citizens look forward to economic relief and leaders look forwardto the prospect of large increases in public spending. Based on theprevalent economic theory and similar experience in othermineral-rich countries, there is a genuine risk of greatly over-estimating the economic and strategic opportunities offered byAfghanistan0s newly discovered mineral wealth. A preliminaryanalysis indicates the value to the Afghan economy of the newlyidentified mineral deposits is likely to be a minuscule fraction ofthe generated wealth (Lipow and Melese, 2011). Mining is anexpensive and time-intensive process, which can cost hundreds ofmillions of dollars for a single mining operation. Even in a bestcase scenario, it would take more than 5 years to a decade totransform a mineral deposit to a “shovel-ready” proposition. Afterthat, even with a good mine, it takes 5–10 years to recover theinvestment. Also security will have to be provided during this timeperiod, which will only serve to increase production costs.

In terms of infrastructure and human capital investments,Afghanistan is in the “earliest” stages of any mineral development.Due to the country0s lack of physical and legal infrastructure, it isclear that there will be significant economic challenges involved inextracting Afghanistan0s mineral resources – roads and railwayinfrastructure will have to be built and equipment and humanresource brought in over a long period of time. Also as a land-lockedstate, Afghanistan is dependent on shipping through neighboringcountries that are grappling with infrastructure issues and politicalstability. This is likely to result in relatively high production costs,significantly lessening the net value of Afghanistan0s resources thanany estimates of the gross value.

The buffer zone of the new Great Game

Afghanistan0s one hope was that, eventually, foreign powerswould leave it alone and the Afghans would then be forced tomake peace among themselves. With the discovery of mineraldeposits worth hundreds of billions of dollars, that hope has beenextinguished and there is a genuine risk of Afghanistan slippinginto greater instability. As the Western powers are consideringphasing out of Afghanistan, big new players like China, India, Iran,Russia and Pakistan are having their presence felt. The nature oftheir presence is different: unexpectedly large demand for rawmaterials, energy commerce, quest for strategic depth and geo-politics. At the present, a future in Afghanistan without a con-tinuation of foreign interference does not look likely and assigningthe buffer zone, a three trillion dollar value, has certainly increasedthe stakes.

Of critical importance is the role of India and China in any futurescenario of Afghanistan mining. Both nations have played the role ofGood Samaritan in Afghanistan but their stakes have changedrecently. A Chinese consortium has procured the Aynak copperproject and an Indian consortium has been awarded the Hajigakiron ore deposit, securing the minerals for national strategicreasons. What will be the role of these two aspiring super powersin any future scenario of Afghanistan mining, especially the issuesof access and evacuation of mineral resources? China and India do

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not see eye to eye on a number of issues. Longstanding borderdisputes plague the relationship and both have different views ofPakistan and its future role in Afghanistan.

Another critically important question is that of the future role ofPakistan. Looked upon suspiciously by various stakeholders inAfghanistan; unable to dismantle the infrastructure that has pro-vided funding, training and arms for the Taliban; providing a routefor smuggling of illegal minerals from Afghanistan. Add to this thespread of radicalism coupled with a lingering socio-economic crisisin Pakistan and we have an explosive mix, which renders the futureof the region, uncertain and vulnerable.

Environmental and human impact

Mining is a hazardous and environmentally devastating exer-cise and while the footprint of mining can usually be managed tolimited spatial coverage but when it does occur, it can havesignificant and irreversible impacts (OECD, 2008). The negativeenvironmental impacts of mining include energy and waterconsumption; air, water and land pollution; subsidence; landscapealteration, etc. Impacts from small-scale mining in particularinclude the silting up of rivers, deforestation, and mercury andcyanide pollution. The consequences of polluted water, land andsoils are most visible in deteriorating health, lost agriculturalproductivity and damaged ecosystems of the mine surroundings.Already the legacy of conflict that has plagued Afghanistan and itspeople for nearly 30 years has damaged not only the country0ssociety and institutions, but also its environment (Emadi, 2011;Shroder, 2012). With the onset of mining operations, it is easy forthe Afghans to lose sight of green issues and a general sense ofpublic acceptance might prevail, that this is the price of develop-ment (Sheraz, 2011). Ore smelting will require considerable energyto melt the ore to metal and in Afghanistan the use of more easilyavailable coal may trump other energy sources such as hydroelec-tricity that is yet only weakly developed. In the new scheme ofthings, the plentiful coal in northern Afghanistan would be usedfor smelting, bringing with it a plethora of environmental issues.There is a grave danger that with the spotlight on economic growth,investments and policies will neglect systemic environmental issueslike land reclamation, species displacement, environmental degra-dation and loss in quality of life of local inhabitants.

Challenging the paradigm of a feared future

While there are serious odds and challenges ahead, the newlydeveloping role of natural resources can play a role in healing thedivided nation of Afghanistan. Natural resources can contributesignificantly to development in different ways: by generating aneconomic activity and as a source of growth; as a livelihood, byproviding much-needed jobs for people thereby reducing povertyand supporting the achievement of the Millennium DevelopmentGoals (MDGs). So while the potential for severe failure exists, theoverall potential for the vast mineral wealth of Afghanistan as asource of conflict resolution remains promising and deservesgreater attention by policy-makers.

Mineral Resources – not always a curse

The influence of natural resources on conflicts has beencritically re-examined (Fearon and Laitin, 2006; Di John, 2007;Mehlum et al., 2006) and it was found that the relationshipbetween primary commodities exports and civil war is neitherstrong nor robust. Their main results suggest that where violentconflicts occur, natural resources are not necessarily the cause,but other factors, such as weak governments, recent conflict, poor

economic performances or war in a neighboring state, tend to playan important role. The overall picture that emerges is that naturalresources do not have a direct effect on growth, rather an indirecteffect, dependent on the quality of national institutions thatrepresent the channel for the resource curse. So emphasis inpolicy priorities in Afghanistan should be on institution building,accountability and reducing corruption in the form of rent-seekingand patronage

When the benefits of mining flow to the underprivileged, theycan provide a route out of poverty. The challenge is to recognizethe potential for the resource curse and work to counter it. In theearly 20th century, mining was an important driver of growth inthe USA, Canada and Australia. More recently, Chile and Botswanahave been examples where mineral wealth exploitation haspowered successful development and reduced poverty. Botswanaprovides a striking example of evolving from one of the poorestcountries in the world to a middle-income country. This successhas been widely attributed to sound economic policies, especiallyin managing its large diamond resources, negotiation of deals withmining firms, dealing with tribal authorities and a commitment tofiscal stability (Beattie, 2009).

Rules of the Great Game have changed

It is difficult to imagine a future in Afghanistan without foreigninterference, but it may prove to be a blessing in disguise. Theprevious forces at play in Afghanistan had their location of originfar from the location of interference, hence the havoc which waswrecked in Afghanistan. In the context of the new forces at play,the geography of production is in the vicinity of the geography ofconsumption and the need for a stable and prosperous Afghani-stan is a mutual necessity. The rules of the game have also changedconsiderably. Consider the role of China, the giant of the emergingmarket economies, which has entered many under-developedcountries without the baggage of colonialism; indeed, many ofthe countries of the under-developed world regard it as an ally(Collier, 2010). China has emerged as a development agent withfew strings attached for developing countries to partner with,which is clearly empowering for the developing world in terms ofpostcolonial shifts of power back to the colonized. For e.g.: theterms of the Aynak copper contract, which was awarded to China,according to most international development experts familiar withsuch contracts are very favorable to Afghanistan in terms offinancial arrangements.1 Also given its investment portfolio andfuture plans in Afghanistan, China0s strong role as a regional powerbroker and potential mediator in conflict resolution will play a bigrole in maintaining a stable playing field in Afghanistan.

It is also important to note that other regional powers0 (India,Iran, Russia and China) interests are mostly aligned with those ofAfghanistan and the international community – stemming mostlyfrom crucial national security interests. All of these regionalpowers share concern over the spread of Islamic radicalism andthe threat of radicalism growing among these countries0 ownsizeable Muslim minorities. With the prospect of a decline inWestern influence in the region in sight, China as well as Russiaare reaching out to Pakistan and Afghanistan in a bid to improveeconomic ties and to secure their southern borders against thespread of Islamic fundamentalism. The other stakeholders in

1 Additional elements in the successful Chinese bid for the Aynak Coppercontract included provision of an onsite copper smelter, a coal mine for powerproduction, a 400-megawatt, coal-fired power plant that would also augment theKabul electric supply, a ground-water system, roads, homes, schools, hospitals, thebuilding of a freight railroad from western China, through Tajikistan to Afghanistanand Pakistan, help for Kabul University, and thousands of new jobs (Synovitz, 2007).

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Afghanistan are also relocating their positions in the event ofWestern withdrawal in Afghanistan.

Perhaps the most heartening shift is the changing role ofPakistan. Pakistan0s recently retired army chief, General Kayani, inhis Independence Day speech remarked for the first time that thewar against terrorism was Pakistan0s war (Ali, 2013). In the past, itwas considered only the USA0s war. This is a major strategic shiftthat is expected to have a profound impact on the course of peacein Afghanistan. Also with a newly elected government in Pakistan,which has stressed the need for dialog with the Taliban, coupledwith the keenness of the Taliban in opening dialog with the Alliedforces; is expected to bring a positive change in the region.

Civil society 2.0

Nongovernmental organizations (NGOs) have played an impor-tant humanitarian role in Afghanistan and in support of Afghanrefugees since 1979. In a post-minerals era, pressure from civilsociety and NGO0s can play a major role in holding variousstakeholders accountable for the development and revenue-spending of national mineral assets. Afghanistan is currentlypursuing membership of the Extractive Industries TransparencyInitiative (EITI) – a policy mechanism marketed by donors andWestern governments as a key to facilitating economic improve-ment in resource-rich developing countries. The forces behind theEITI contest that impoverished institutions, the embezzlement ofmineral revenues, and a lack of transparency are the chief reasonswhy resource-rich developing countries have underperformedeconomically, and that implementation of the EITI, with itsfoundation of “good governance”, will help address these problems(Hilson and Maconachie, 2008). While the EITI is not necessarily afoolproof system for facilitating good governance in resource-richcountries, the prospect of Afghanistan being compliant with inter-national efforts at accountability and transparency, can consider-ably strengthen the “social contract” between corporations, foreigninvestors and the Afghan community. The convergence of comple-mentary international interests in mineral development thus hasthe potential to build trust rather than increasing tensions.

Beyond the most obvious: visualizing the future

The methods and tools used in visualizing the future are basedon the following conceptual framework (Inayatullah, 2008):

1. Mapping the future, using the futures triangle. Where is thefuture heading towards and how do we get there? Whichparticular histories, current trends and visions of desiredfutures are influential in this process?

2. Deepening the future using causal layered analysis. How canwe best identify grand patterns of change beyond the mostobvious and the superficial? How can we learn from theknowledge base on the grand patterns of history?

3. Creating alternative futures through scenario develop-ment. How can we best broaden our understanding of futureand go beyond ‘business as usual’/more of the sameexpectations?

Mapping the future – the futures triangle

The futures triangle maps the future by focusing on threedimensions – the pull of the future (images), the push of the future(drivers) and the weight of the future (barriers to change, asdefined by a particular image). In the case of Afghanistan miningfutures, a preferred future would witness mineral extractioncontributing to an Afghan welfare state, with equitable distribu-tion of mineral wealth and a healing effect, bridging together allthe Afghan stakeholders. Peace would finally return to Afghanistanand future Afghan generations would reap the efforts of theirelders.

This version of a preferred mining future is hampered by theweights against creating such a humanistic future (economicrationalism, diminishing global courtesy, corruption, foreign inter-ference, ethnic and social divide) are both broad and deep. Thesebarriers to a desired future are complemented by the undueexpectations of mineral discovery and lack of local debate inAfghanistan on this intrinsic and sensitive issue. Interestingly,the weights for change are clearly and more easily articulated.The push (drivers) in creating and sustaining such a future aredeep-rooted in current human psyche as the harbinger of change(a gift of nature to claw out of the conflict in Afghanistan) and theneighborhood effect between the geography of production and thegeography of consumption. Civil society and social media have abig role to play if this transformation has to take place. However, itis unclear if the drivers, the pushes of the future are heading inthat direction (Fig. 1).

Fig. 1. The futures triangle.

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Deepening the future – causal layered analysis

Derived from theories of poststructuralist discourse, CausalLayered Analysis (CLA) provides a basis for critiquing the socialconstruct of the ‘real’ and offers a layered approach with which toanalyze the results and provide a framework for the discoursefrom the key focus areas of this research. The CLA method assumesfour levels of analysis. Inayatullah (2004) states that:

“The first level is the litany representing quantitative trendsand problems, which is the most visible and obvious level,requiring little analytic capabilities and the assumptions arerarely questioned. Litanies are hard to challenge and are oftenused by those in power for their own ends. The second level isthe systemic view, which looks behind the headlines and isconcerned with social causes, including economic, cultural,political and historical factors. Both these levels operate withinshort time-frames. The third deeper level is concerned withstructure and the discourse/worldview that supports andlegitimates it. The task is to find deeper social, linguistic,cultural structures that are actor-invariant (not dependent onwho are the actors). The fourth layer of analysis is at the levelof metaphor or myth. These are the deep stories, the collectivearchetypes – the unconscious and often emotive dimensions ofthe problem or the paradox. This level provides a gut/emotionallevel experience to the worldview under inquiry”.

The CLA method attempts to discern the irrational for thepurpose of discerning the deeper story being played out at thelitany levels. These four levels are used to find the full panoply ofstories, both from the conscious, unconscious and emotive per-spectives on the issue (Inayatullah, 2006).

The emerging map from the CLA exercise mirrors a sharedperspective on the long term effects of the Afghanistan miningsector Table 1. At the litany level the causes are multifold:concerns about the resource curse, uncertainty around viabilityand disregard by foreign powers and multinational Corporations(MNC) for problems and issues in the geography of extraction. Thesolutions at this level are emphasis on human resource develop-ment, building institutions before they develop unhealthy routinesand corporate social responsibility for MNCs.

At the systemic level, the issue is of governing resources andaffiliates responsibly and effectively and not being a pawn to theforeign powers. Another aspect of this level is of diversifyingmineral usage, from raw material export to multiple streams ofrevenue, by developing downstream industries. This could be bothin terms of less consumerism (NGO driven) as well as technologysolutions. The solutions here are partnering with industries,enhanced infrastructure and a commitment towards inclusivepolicy making and transparency of beauracratic processes.

At the worldview level, the issue assumes different proportionsfrom different view-points. The MNC0s are interested in theirprofits and empires and wish to make the best of boom times.The Afghan leadership is stuck in a quagmire of reaping what theynever had to sow (extractive minerals are a free gift of nature) andis resting on short-term goals and indicators. On the other hand ofthe resource trap are resource-hungry countries locked into aprisoner’s dilemma of inaction, as reluctant to deal with theresponsibilities that accompany power. The solution is to globallyevaluate progress on the basis of well being and equitabledistribution of wealth, and new perspectives of value, includingcultural and social benefits. It is also important to diversify theeconomy in anticipation of post-peak-minerals scenario.

At the myth level, the mining scenario in Afghanistan can bemetaphorized with which means “make

Table 1Causal layered analysis.

CLA level Problem/issue Strategies and solutions

Litany � Resource Curse – stunted growth and/or degradation and inhibition ofall non-traditional mining industries.

� Uncertainty around whether and how long, Afghanistan0s mineralindustry will account for a significant export and GDP value.

� The poor and under-privileged communities remain marginalized.

� Invest in building up skills outside of traditional mining industries.� Implement initiatives that support Afghanistan0s agriculture,

education, manufacturing and other industries that they do notdepend on finite natural resources. In this way, minerals can continueto support Afghanistan0s economic development.

� Allocation of quotas and resources to build capacity of under-privileged communities.

Systemic causes � Current governance structures do not enable long-term strategicplanning and do not support deriving long-term benefit fromAfghanistan0s minerals.

� Lack of infrastructure, education and resources to enable successfultransition to other industries.

� Afghanistan0s minerals industry is predominately driven by externaldemand.

� Current governance structures do not ensure equitable distribution ofminerals wealth.

� Address current governance structures (government, multi-nationalcompanies and donors) so that long-term benefit from Afghanistan0sminerals is prioritized and enabled.

� Prioritize and invest heavily in education and infrastructure needed tobuild up other industries.

� Expand down-stream services of the minerals industry, includingmineral processing and manufacturing, which drives domesticdemand.

� Restructure governance mechanisms, such as inclusive policy makingand transparency of beauracratic processes.

Worldview � When the focus is on short-term goals that are market driven andobsessed with GDP growth alone, long-term national benefit cannotbe achieved.

� With no other sustainable growth option, the perception that it issensible to have a rentier industry as the main economic engine ofAfghanistan0s economic growth. This is blinding the significance ofpreparing for a post-peak-minerals time frame.

� Develop new indicators of welfare to determine progress – that areholistic (encompassing well-being and other aspects of human andenvironmental interests). These indicators measure progress on thebasis of well being and equitable distribution of wealth, and newperspectives of value, including cultural and social benefits.

� Shift spotlight from the mining industry and raise awareness of therisks associated with relying on a primary industry as the maineconomic engine of a nation and invest in building up industries andservices that can be sustained.

Myth/metaphor � “Make bread while the oven is hot” – plunder it while we can; onceit’s gone, the future is bleak.

� Change the metaphor to “the golden egg laying goose”.Value andmanage Afghanistan0s minerals towards ensuring long term benefit.Prepare now for a post-peak-minerals scenario.

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bread while the oven is hot”. For all stakeholders it is aboutgrabbing the opportunities to make a quick buck while they can.The solution is to transform the opportunistic mentality to “thegolden egg laying goose” frame of mind. Natural resources are agift of nature and perhaps the only hope for this flounderingnation. The goose must not be slaughtered for momentarybenefits, it must be given the time and patience to deliver itsgolden eggs and the wealth generated needs to be spent throughmeticulous planning and action learning.

Scenarios

Scenarios are stories about possible futures, about what couldhappen, not what will or should happen. Unlike predictions orforecasts, scenarios are rich, multi faceted stories that capture theunpredictability as well as possibilities of the future. The scenariosfor mineral extraction futures in Afghanistan have been developedthrough divergent futures approach as categorized by “best case”and “worst case” scenario.2 Of special significance to the Afghanmineral quandary is prevention of the worst case scenario. Even ifin the context of present conditions, a desired future might seemremote; at least efforts can be made to prevent a worst casescenario.

Descent into the abyssThis is a worst-case scenario depicting all that could go wrong:

chaos, conflict and corruption form the canvas of this scenario.Afghanistan has become a poster case for what (De Oliveira, 2007)famously referred to as “successful failed states”. Amplified by thenew mineral wealth, corruption has taken a new turn with ahandful of well-connected oligarchs, with personal ties to topgovernment officials, gaining control of the resources. Hardly acent has been invested where it was most needed – in schools,hospitals and infrastructure; instead it has been spent on weaponsand sustaining armies. Civil war is rampant over the control ofmineral wealth and has been “sustain ably” continued fromvirtually limitless revenue that raw materials generate.

The foreign, resource hungry countries, involved in Afghani-stan, have been locked in a prisoner0s dilemma of inaction bybecoming intimately involved in the resource paradox as itspaymasters. Westernized NGOs with no sense of connection withground realities, have served an even greater injustice to Afghani-stan by not emphasizing on issues that were of core importance.With hardly any good news ever coming out of Afghanistan, theworld has turned a deaf ear to murmurs of catastrophic pollution,lost agricultural productivity, damaged ecosystems and greedymining corporations. The mining companies attracted to Afghani-stan have been those that are least bothered about poor govern-ance and welfare and have no interest in helping to avoid theproblems of the resource paradox. The final twist in this jinx is theachievement of peak mineral status, due to accelerated mineralextraction, far beyond all historical rates.

Light at the end of the tunnelA general consensus has been built in Afghanistan that mineral

extraction offered Afghanistan a once-in-a-generation opportunityto rise frommisery and there was a conscious effort to learn and toavoid the mistakes of other resource-curse nations. The Afghanstrategy was built around two main postulates. First, multiplerevenue generation by not just restricting Afghanistan to a quarryfor global mineral needs. Success in maximizing revenue streamswould automatically link to the second rule: ensuring impacts

from mining are balanced by equity based distribution of reven-ues. In thirty years Afghanistan has achieved middle-incomestatus, with a reasonable social development but not beyond.

Multinational companies have started feeling the heat of publicmovements like the Arab Spring and Occupy Wall Street and havestarted taking social responsibility seriously. Communities, urgedby their youth, were becoming much more agile and sophisticatedin harnessing the tools of technology to communicate and mobi-lize both locally and internationally. This strongly impacted theway multinational companies, local governments and institutionsoperated. NGOs and civil societies started to focus on issues as wellas solution directions, beyond those dictated by Western NGOsand closer to local problems and solutions. In particular thecapacity of grassroots organizations is greater and more deeplyrooted in indigenous societies and there have been numeroussuccesses in grassroots organizations holding extractive industriesto international standards.

The Taliban have been brought into the mainstream politicsand they have played a major role in enabling economic andpolitical power to indigenous communities and representation atstate and global level. A Mineral Development Fund has beenestablished for equitable distribution of mineral wealth and thereis an Audit Committee comprised of Nobel Laureates and theTaliban, which oversees it. Civil society organizations and NGO0shave both played a crucial part in mass upheaval and publicawareness on their rights, duties and how to hold institutionsaccountable.

The preferred future – the way you want the future to look like

In the author0s view, a preferred future for Afghanistan, in themineral context would materialize around at least the followingtwo themes:

The future should not mirror the past

The topic in itself represents a quandary and by assigning athree trillion dollar to the battlefield, the stakes for conflict andchaos have been raised. While a general trend has been to viewthe traumatic events of the last three decades as attentiondeflectors from the pursuit of systematic policies to improvesocio-economic well-being; the situation could actually providea compelling case for reform. While the harmful consequences ofcontinuous conflict and foreign interference are hard to dismiss,global examples suggest they are not a sufficient explanation forpessimism – too often countries in other regions have turnedconflict to an advantage. Japan during World War II and SouthKorea, during the Korean War, suffered huge physical damage, notto mention the psychological consequences of war on theirpopulations. To this day, both South Korea and Taiwan facecredible threats from heavily armed adversaries, whose intentionsare not benign. Some of the previously stagnant nations of EasternEurope that experienced the presence of the Soviet army for morethan 40 years also changed their focus. The lesson to be extractedis that political and military shocks actually provided the basisfor an effort to improve living standards, through reform. Inhis influential book, “The Rise and Decline of Nations: EconomicGrowth, Stagflation, and Social Rigidities”, Mancur Olson sug-gested that in a number of countries, particularly Germany andJapan, postwar growth had been facilitated by the destruction ofearlier institutions (Olson, 1982) and it can be similarly argued forsome Asian countries. The past is an indicator of the future but it isby no means destiny.

2 The scenarios are based on work done by the author for the Institute ofAlternative Futures (Sheraz, 2011).

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Justified and equity based distribution of mining profits

The ills associated with the “curse of mineral resources” are notinevitable, and can be addressed through good global governance.Mining was an important driver of growth in the USA, Canada andAustralia in the early 20th century and recently, Botswana andChile have achieved economic development powered throughmineral exploitation. To realize the economic potential forpro-poor growth and ensure more equitable distribution of ben-efits, good governance, and corporate social responsibility byMNC0s, effective legal frameworks, and meticulous environmentaland social regulations will be needed.

Getting there – policy recommendations

Afghanistan finds itself at a crucial juncture and the effect of anyaction will reverberate with future generations. So it is importantthat various stakeholders be brought to the table and anticipatoryaction learning (asking questions of desired and probable futuresthrough iterative cycles) be employed as a policy research meth-odology. This means ensuring that mineral extractive economieslike Afghanistan are not just the object of research but are part of amutual dialog on desired mining futures. The Afghan governmentshould ensure representation and meaningful participation by localcommunities, in any decision-making or oversight mechanisms forevery mining project. Communities also need to be empoweredwith accessible means to redress complaints against miningorganizations or security forces in a credible and timely manner.

There is now a broad consensus among development policy-makers that institutions matter and that they are a key determi-nant of the wealth and poverty of nations (Hoff, 2003; Woolcocket al., 2011). Collier and Goderis (2007) have provide empiricalevidence that avoiding the resource curse is predominantly amatter of institutions curbing patronage and rent-seeking. Coun-tries with bad institutions experience a resource curse; those withgood institutions do not. So it is imperative that institution buildingand their strengthening be top priority for Afghanistan and itsstakeholders. This includes institutions that govern the allocationof public resources and institutions which hold wrong-doersaccountable for their deeds. Given the status of illegal miningand its cross-border smuggling, emphasis needs to be on clampingdown on this bleeding pipeline. This could involve action in regardsto (1) revamping the security and governance systems in areas ofillegal mining, (2) clamping down on networks of criminals andmiscreants who are involved in the cross-border illegal trade, and(3) improvement in the patrolling and policing of porous borders.News about the illegal mining trade has not made headlinesoutside Afghanistan and it is time that the global community issensitized on this issue. The issue of smuggling of minerals alsoneeds to be brought up in official Pakistan-Afghanistan talks so thatthe other side of the border can also be secured.

It is also important to shift the spotlight from the miningindustry as a primary industry and the main economic engine ofAfghanistan. It is highly unrealistic to raise expectations of Afgha-nistan becoming the next mineral-based success story in theleague of “Botswana” or “Saudi Arabia”; but what it needs to guardagainst is that it doesn’t become the next poster case of resourcecurse like Sierra Leone or Angola. It is imperative that great care betaken to ensure the development of Afghanistan0s naturalresources are a blessing, and not a curse that exacerbates economicand security challenges already faced by the Afghan people. This isthe time to invest in building up industries and services that can besustained, when the natural resources are gone.

Similar to Norway, Alaska, Botswana and Chile, mineral rev-enue above a certain level can be kept in a Mineral Fund, a giant

state savings account, intended to benefit future generations. Sucha fund could be managed by an advisory of international experts aswell as members of different ethnic and tribal groups. Includingmoderate elements of the Taliban in this panel could be a greatconfidence boosting measure and also contribute to proper mon-itoring and evaluation of the Fund. In Norway, any politicalinterference in the management of the Fund is strictly prohibitedand any investments in the arms industry are forbidden. Afghani-stan could do well to follow this example.

Here a hint of caution is required. Collier (2007) has talkedabout the aid trap which inflicts the bottom billion. It will be agreat disservice to the people of Afghanistan if they are transferredfrom the yoke of international aid to handouts from mineralearnings, as suggested by some Western commentators (Lipowand Melese, 2012). No place has on the planet where Phil Bobbit0sinsightful comment that “the realist school is increasingly unrea-listic” applied more to than distribution of mineral earnings toAfghanistan’s citizens. Even in rich, stable democracies wheremineral revenue is collected honestly, the distribution of mineraldividends can cause tension. The best example can be given ofAlaska, which is sufficiently rich in oil and gas. It has no incometax and in fact hands out a mineral dividend to each citizen, whichover the past decade has averaged around $1500 a year. It isperhaps fortunate that to get the handout you have to move to acold, remote state where it is dark for more than twenty hours aday in winter, which in all probability, deters a large number offreeloaders. If oil was discovered in the sunny beaches of WesternUSA, and the petroleum payouts were started, the seaboard mightstart to crumble into the Pacific from the weight of Americansflooding into the area in pursuit of free dollars (Beattie, 2009). TheAfghans have been bogged down with the international aid trapfor the past three decades; it is time that they break free of theshackles of free handouts.

It is also important that the environment is not irreparablydamaged in the process of extraction of the mineral resources.With a severely stressed environment, Afghanistan cannot affordeconomic development at the cost of further diminution ofenvironmental quality produced by the extraction of resources.Given the common corruption in a very poorly paid governmentbureaucracy, NGO0s, civil society movements and social mediaagain have a big role to play in security, environmental, humanrights, local economic and cultural impacts of mineral explorationand exploitation. A regional or community-based natural resourcemanagement approach from the bottom upwards, could beanother step in the right direction (Shroder, 2007).

The developed world as well as civil society has a big role inensuring that international standards of transparency and goodgovernance get adopted, through peer pressure. The last decadewitnessed a huge victory on blood diamonds and its financing ofwars in Africa. Can the war on crimson copper and red iron, becontested with the same zeal? An important part of the equation ismultinational corporations, who have reputations to protect in thedeveloped world. It will also matter greatly what ordinary peoplein the developing world think about these resource-extractingcorporations. It will be the accumulated effects of teenagers in thebackseat of the family car, saying, “No, Mom and Dad, not thatpetrol pump/jewelry shop – did you hear what ABC corporation isdoing in Kabul/Kandahar?”, that brand names and corporationswill try to clean up their acts. Similarly legislation on supply chaindiligence in Western countries, will ensure that companiesimporting minerals are part of the solution to the nexus ofminerals and violence, rather than being party to conflict, instabil-ity and human rights abuses.

NGO0s and civil society movements could play an importantrole by emphasizing on transparency and good governance inAfghan bureaucracy. This will enable Afghanistan’s civil society as

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well as its institutions to hold its government accountable for thedevelopment and revenue-spending of national mineral assets.Where corrupt and autocratic governments rule, pressure fromcivil society and shareholder groups can play a major role. Underinitiatives like the Extractive Industries Transparency Initiativeand organizations like International Council on Mining and Metals(ICMM), the mining sector0s contribution to sustainable develop-ment in Afghanistan can make several advances.

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