As Washington discusses the dismissal of General Stanley McChrystalas the top military commander in Afghanistan and his replacement by General David Petraeus, one investor said there is at last hope for the war-torn country.
Douglas Hansen-Luke, the CEO of Robeco Middle East, just returned from Kabul where he met with members of Afghanistan’s mining and banking industries and said there is now a genuine alternative to war and the potential for a legitimate income.
“Opium is currently the major industry in the country and worth about $5 billion a year," Hansen-Luke said. "The violence in Helmand province is a battle between those in control of the opium trade, the Taliban, and the US led forces. What is needed is an alternative, legitimate income and mining offers that hope.”
There were reports earlier in June that the US government believes there is $1 trillion worth of mineral wealth in the mountains of Afghanistan. The Afghan government believes the figure could be three-times as high as that, while others put the figure well below even the US estimate.
His Excellency Wahidullah Shahrani, the Minister of Mines in Afghanistan, told CNBC that while mining capacity is currently very small, his government hopes to see significant production of copper within three years and of iron ore within five years.
“We are upgrading our knowledge of the mineral wealth of our country and tenders will be undertaken to the highest international standards,” Shahrani said.
The key to getting these resources out of the ground and onto international markets are threefold, Hansen-Luke said.
“Firstly soft infrastructure like the rule of law is needed," he said. "The chance of a legitimate income for Afghanistan could help end the violence. The country needs a credible alternative to violence and any investment needs to be seen to benefit Afghanistan, not the West or US.”
“There are examples of mineral wealth taking a poor country and leading it towards prosperity," he added. "Take Ghana versus Nigeria. Ghana has huge hopes for its oil and gas wealth and the government plans to use the revenue to invest in the infrastructure and park some money oversees. In Nigeria the people see their oil wealth being wasted and believe the Western oil companies are benefiting at the expense of the people.”