Corruption for All: Afghan Minerals and Anbar Oil
As Steve Hynd noted earlier today, the big story about new-found Afghan mineral wealth is really not a new story. It is an information operation, or a propaganda piece aimed at the US public and portions of the Washington D.C. think-tank universe.
Afghanistan’s mineral riches were well known to the Soviets in 1985 and a US government Country Study in 2002 went into detail about their knowledge. By 2005 the US Geological Service was being publicly exuberant in its assessment of Afghanistan’s mineral resources (PDF). It published other public reports about the “Significant Potential for Undiscovered Resources in Afghanistan” in 2007, one of whichfocussed on non-fuel minerals. In 2008, it was Afghan reserves of oil and gas that was making the news and in 2009, as Reuters was reporting on Afghanistan’s vast mineral wealth and McLatchy was noting China’s interest, rights to the vast iron deposits were already up for tender.
My first thought when I saw this story last night while watching the Celtics beat the Lakers, was that this sounded amazingly like the mini-boom in stories from 2007 that said Anbar Province in Iraq had massive and newly discovered oil reserves. April 2007, Time Magazine reported that there were over 100 billion barrels of unexploited oil reserves in Anbar.
The report says about 100 billion barrels of oil and a large amount of gas lie in the Sunni-dominated Al-Anbar province. Until now, Sunni politicians have feared economic devastation if Iraq divided into a federation or imploded into disparate ethnic states, since the territory dominated by their ethnic group was thought to be the only one without large reserves of oil.
100 billion barrels of potential reserves would give Anbar province reserves greater than the rest of Iraq, and place Anbar in the top tier of oil production sites in the world. 100 billion barrels of oil would have a spot market price of $6 to $7.5 trillion dollars. That is a lot of money in a very corrupt region.
I thought of the Anbar oil story as it emerged at a time when domestic political support for an unpopular war collapsing, the military was asking for more time, and the strategy was to buy off significant factions of the insurgency by promising arms, money, and implicitly future smuggling/corruption cash flows for the local elites.
Large scale mineral based development strategies are fraught with peril if they occur in already corrupt nations or regions. If the Afghan minerals are easily accessible and relatively cheap to extract and ship to Karachi or Chabahar, then that produces rentier politics where the money pools at the top of society and corruption ensues. This is what we see in most extraction based economies. And this could be “fine” from a US perspective as local stakeholders would be assured of their cash flows and have some minimal incentives to maintain some decent connections with the outside world.
Announcing a trillion dollar find is a way to dangle mass corruption opportunities and cash flows to local elites that don’t need to be backed up by US government dollars. It is a way to buy a solution.
Crossposted at Newshoggers
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The timing of this (re)announcement seems so cynical it’s like a slap in the face.
i have a great idea. we can send guys from massey, peabody and anaconda over there. they can entice all the taliban guys to become miners.
with the track records of those companies when it comes to killing workers i figure it will be at least as efficient as drone strikes.
problem. solved.
I nearly plotzed when I read “new” discovery; that immediately told me this was a spin shot from the government.
This “news” is more like 40 years old; at least to some of us.
Did anyone see this, per Marc Ambinder:
Per Yahoo’s John Cook, “NYT’s Jim Risen just told me bloggers criticizing his Afghan minerals story are ‘jerking off in their pajamas.’”
Sounds like Mr. Risen is pissed that people are calling him on his bullshit.
Ok, ignoring the timing and content of the message that Afghanistan may or may not have that much mineral wealth—let’s just assume that the report is accurate, and I’ve heard the correction it could be as great as 3 trillion dollars US. It doesn’t buy a solution, it shifts the object, and sometimes nature, of the fighting between disputants.
There is not a single war where the discovery of valuable resources has either
1) shifted the focus in a positive direction, or in the alternative,
2) increased participation by state actors (either 1st world nations or their developing partners).
Examples—you can pretty much throw a dart at a board and hit any nation in sub-Saharan Africa to find where long term resource wars, i.e. conflicts lasting over 3 decades, have only exacerbated whatever underlying issues there may be engendering hostility–say ethnic identity (*see minerals in Congo, oil in Niger Delta, etc.). Also, if this mineral wealth were a viable revenue stream–someone in Afghanistan, such as a transnational corp or wealthier ally, would have already been extracting it for funding purposes (see Charles Taylor’s trial at the Hague for war crimes in Liberia).
Demosthenes 2010 June 17
Also, if this mineral wealth were a viable revenue stream–someone in Afghanistan, such as a transnational corp or wealthier ally, would have already been extracting it for funding purposes
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Curious statement given the realities on the ground; this is well documented for more than 30 years (closer to 40 actually) . This is my own personal knowledge.
Or as As Mother Jones magazine’s James Ridgeway said, after recalling past public accounts of the ore deposits, “This ‘discovery’ in fact is ancient history tracing back to the times of Marco Polo.”
So, who, besides China, is willing to go into Afghanistan, battle the Taliban, invest vast sums of money, and build the infrastructure to begin the extraction process?
There are many treasures in many places; just what are they really worth?
What would it be worth to China – which is a lot closer to the area with a lot more manpower. Plus they have been busy securing rare earth elements so as to tie up computer manufacturing ‘in house.’ You’d never find an Indian ignoring a Great Power on the doorstep like that : which is why decades of ‘artillery duels’ have provided diversion at the border.
Sorry, but this is important;
Happy Birthday Aung San Suu Kyi; June 19, 2010