An Afghanistan the World Must Know

Afghanistan Series VII

Amidst all the turbulence and uncertainty (read scaling down of US military's operations and eventual withdrawal in 2016) that looms large over Afghanistan, there lies tremendous business and investment potential.

Amidst all the turbulence and uncertainty (read scaling down of US military’s operations and eventual withdrawal in 2016) that looms large over Afghanistan, there lies tremendous business and investment potential.

There have been huge gains over the last 12 years, which must be publicised so that the rest of the world and Afghanistan make the most of it. The emergence of a free and independent press is the highlight of the turnaround that the country is witnessing. Over 2.5 million girls are in school, and the recently held presidential elections saw impressive voter turnout.

Demographic dividend can work to the advantage of Afghanistan. The country boasts of a young, robust workforce and they are desperate to create a secure and prosperous nation.

After the removal of Taliban in late 2001, there has been a slow and steady progress in Afghanistan under the leadership of former President Hamid Karzai, who played a crucial role in bringing stability. With a robust institutional framework in place, the future of Afghanistan looks bright.

The strategic location of Afghanistan is catching the world’s imagination. It is located between the resource-rich nations of Central Asia and international trade hubs in Southeast Asia, thereby serving as a link between North and South, East and West.

Apart from its key geographical location, Afghanistan has huge natural resources. The country has rich deposits of copper, iron, cobalt, gold, lithium, fluorite, natural gas, and oil. Some estimates even suggest that the mineral reserves are worth $3 trillion or more! There have been massive investments in the extractive industries. With such a solid base, Afghanistan can very well emerge as one of the leading mining centres in the world. The infrastructure in Afghanistan leaves a lot to be desired and it offers investment opportunities that the world must tap into.

Today, the new government in Afghanistan is in a position to leave behind the legacy of instability and destruction and usher in peace, prosperity and growth, which the Afghans badly need. Several countries have shown their intent in lending support to Afghanistan in this endeavour. Since 2001, America has spent more than $650 billion in Afghanistan.

Peace must get a chance in Afghanistan, and the new government must implement a reform agenda for the benefit of its citizens who have suffered a lot. A better life is what Afghans crave for, wherein they have access to decent jobs, education and health services.

The key lies in proper management of the vast mineral deposits, which if done can lift a generation out of poverty. Let’s take a look at the rich resources that Afghanistan has at its disposal:

Natural Resources

As stated earlier, Afghanistan could become the next big thing when it comes to the mining industry. The huge deposits of iron, copper, cobalt, gold, lithium, etc are crucial in the turnaround of the country’s economy.

Lithium is a key raw material used in the manufacture of batteries for laptops and BlackBerrys. According to an internal Pentagon memo, Afghanistan could become the ‘Saudi Arabia of lithium’. The stunning possibility in the mining sector can attract investments from across the world. The mineral deposits are scattered throughout the country, including in the southern and eastern regions along the border with Pakistan. The sector will become the backbone of the Afghan economy. It can generate significant revenue and create large number of jobs in exploration, extraction, processing, and other supporting industries such as construction, power, and logistics. Similarly, the development of oil and gas deposits could create more than $2 billion in annual royalty and tax revenues for the government.

Agriculture

Agriculture contributes more than 50 percent of its Gross Domestic Product (GDP). There exists ample opportunity for investment in the packaging and processing of agricultural products. Revitalising the agricultural sector is important for strengthening the country’s infrastructure. Demand for machinery in agro-business, grain cleaning, and ploughs will see an upward trend in the days to come.

Manufacturing

Many firms in Afghanistan are involved in light manufacturing. Medical equipment, advanced electrical distribution equipment, etc are also produced by some Afghan companies. Home to a large pool of youth looking for employment, it only makes sense to invest heavily in labour-intensive manufacturing sector. Companies from other countries can set up their manufacturing bases in Afghanistan, and reap rich dividends.

Construction Equipment

The reconstruction of the war-torn Afghanistan has been going on a war footing. Several local and state construction companies are engaged in the country, as a result of which there has been a spike in demand for procurement of construction equipment. Construction equipment, can, therefore, play its part in the restructuring of the Afghan economy.

Telecommunications

This is another important sector with the potential to alter the economic landscape of the Afghan economy. There has been a quantum jump in the mobile subscribers over the past decade. Currently, four major service providers cover over 75 percent of the Afghanistan population.

The road ahead is promising, but with full of challenges. The Afghanistan government and the global community must get their act together and ensure a stable, secure and prosperous nation for Afghans.

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Author

Alankar Srivastava
Alankar Srivastava is Editor-at-Large of L.B. Associates (Pvt) Ltd. He may be approached for all queries at editor@lbassociates.com

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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