The Taliban Is Capturing Afghanistan’s $1 Trillion in Mining Wealth – by Eltaf Najafizada (Bloomberg News – October 21, 2015)

http://www.bloomberg.com/

Taliban fighters aren’t just making gains on the battlefield: They’re also bleeding away a revenue source that is crucial for Afghanistan to pay for its military without U.S. help.

The Afghan government will earn about $30 million in 2015 from its mineral sector for the third straight year, far short of a previous projection of $1.5 billion, according to Mines and Petroleum Minister Daud Shah Saba. That’s also a quarter of what smugglers — mostly linked to the Taliban and local warlords — earn annually selling rubies and emeralds, he said.

“Unfortunately we have failed to well manage and well control our mining sector,” Saba said in an interview. “With the current fragile and messy situation, it’s really hard to say when Afghanistan should expect any profits from it.”

Afghanistan’s struggles to generate cash signal that it could be decades before Kabul’s leaders wean themselves off funds from the U.S. and its allies. U.S. President Barack Obama last week decided to keep 5,500 troops in the country indefinitely after 2016, underscoring the Taliban’s strength after 14 years of war.

International donors led by the U.S. are paying for about two-thirds of Afghanistan’s $7.2 billion budget this year. The country’s mineral wealth — estimated at $1 trillion to $3 trillion — is crucial to bridging that gap.

Saba, who joined President Ashraf Ghani’s cabinet after last year’s election, criticized his predecessor for saying Afghanistan would earn $1.5 billion in annual mining revenues by now and become financially self-sufficient in a decade.

“The revenue projections of the previous government weren’t realistic,” Saba said on Oct. 14 at his office in Kabul. “Afghanistan needs to continue receiving international funds — otherwise the country won’t remain functional at all.”

Shortly after taking office, Ghani said he would use Afghanistan’s mineral wealth to transform the economy, and he regularly touts the country’s potential in speeches to investors. Afghanistan holds vast amounts of copper, gold, lead, rare earths and lithium, a metal used in batteries for cell phones.

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