Southwest Asia

After two years of protracted deliberations in parliament, the Lower House (“Wolesi Jirga”) has finally adopted a series of new mining laws to provide a stronger legal framework for investment in Afghanistan’s mining sector. Among other provisions, the law enables corporate businesses, already investing in the exploration of Afghanistan’s natural resources, to bid for extraction. A subsequent addendum to the legislation requires 5 percent of mining revenues to be allocated for development projects in mining areas.  

The EastWest Institute welcomes the adoption of these laws as a significant achievement. The new legislation could not come at a more critical time—just a few weeks before the second round of presidential elections—as Afghanistan  prepares for a historical political transition, with potential consequences to regional security. In this time of uncertainty, EWI is about to release a new report, Afghanistan Reconnected: Regional Economic Security Beyond 2014—focusing on the country’s regional economic potential. This work has engaged leading private sector leaders, parliamentarians and governmental officials from Asia and beyond. EWI plans to launch the report officially on June 11, 2014, at the institute’s Brussels Center.

Ramazan Jumazada, MP from Afghanistan and member of EWI’s Parliamentarians Network for Conflict Prevention, says: “We do believe this will have a very significant impact on attracting domestic and foreign investment in Afghanistan. The mining sector is a very good alternative for Afghanistan’s sustainability and will help Afghanistan to reduce its dependency on foreign aid.”

The mining sector is Afghanistan’s largest medium and long term economic asset. Official sources have estimated $1 trillion in proven mineral resources and the potential for an additional $3 trillion. 

With the withdrawal of most foreign troops by the end of 2014 and the reduction of foreign aid, Afghanistan’s economy will have to become more self-sustaining and generate sufficient state revenue. To ensure this transition, Afghanistan must increase domestic and foreign investment in key industries, such as the mining sector. Developing Afghanistan’s mineral resources—including copper, iron ore, gold, oil and natural gas—will increase the potential for prosperity and economic growth. 

Speaking to an audience of foreign policy and intelligence professionals, as well as global investors, Major General (MG) Davis addressed NATO’s response to the Ukraine crisis and the changing dynamic of NATO-Russia relations in recent months. MG Davis stressed the importance of fulfilling commitments to NATO partners such as Ukraine, in addition to its formal members, and in distinguishing the difference between “security partnerships versus a defense alliance.” Recent developments confirm Russia’s role as a competitor or challenger to NATO, rather than a strategic partner, and as such, the Trans-Atlantic community must conduct a joint threat assessment to re-think the implications of Russian actions and policy with respect to deterrence and defense. 

NATO members must also revisit the assumption that eastern and southeastern expansion is a stabilizing force for international security, MG Davis explained. As reflected in Putin’s Kremlin speech on March 18, Russia’s worldview is fundamentally divergent from U.S. and European interests and deeply influenced by its historical context. With this in mind, MG Davis assessed that Russian grand actions—such as its annexation of Crimea—may not necessarily reflect a grand strategy. These actions could just as likely be driven by perceptions of opportunity or even narrow interests.

Both the U.S. and NATO must also face the reality of budgetary constraints and reduced defense spending. A review of threats to NATO’s collective defense may very well lead to capability adjustments in key areas, and in the near term, has already lead to a need to review defense plans, force posture and exercises. Looking forward, MG Davis expressed measured optimism, recognizing the need to execute well-prepared plans that reflect a new security environment and emerging challenges NATO faces in 21st century geopolitics.