Newspaper article International New York Times

Greed, Corruption and Danger Undercut Afghanistan's Lucrative Gem Trade

Newspaper article International New York Times

Greed, Corruption and Danger Undercut Afghanistan's Lucrative Gem Trade

Article excerpt

The government's muted response to a militia's takeover of a giant lapis mine suggests an aligning of interests among insurgents and the political elite.

The local people called the militia's takeover of the giant lapis mine in the northeastern province of Badakhshan a white coup -- easy and bloodless. Perhaps, but the seizure has become a lesson in how the lack of accountability and rule of law in Afghanistan can turn bounty into ruin.

Riding waves of excitement after a 2010 report by the United States military that Afghanistan's mineral wealth could be worth as much as $1 trillion, the Lajwardeen Mining Company won a 15-year contract in 2013 to extract lapis lazuli in Badakhshan. Afghanistan has long been one of the chief sources of lapis lazuli, a prized blue gemstone associated with love and purity and admired by poets as well as jewelers.

Valued around $125 million a year in 2014, the lapis trade had the potential to be worth at least double that, and Lajwardeen, owned by an Afghan family in the import-export business for three generations, saw a great opportunity.

Yet within 21 days of beginning its work, the company lost the mine to a local militia. In the two years since, according to interviews with company employees, Afghan officials and militia commanders, the government has done little to restore the mine to the company. Lapis is still being mined, with the rent split between the militia and the Taliban, who have established a strong foothold in a province long resistant to them.

With the fall in global commodity prices deflating some of the enthusiasm for Afghanistan's mineral wealth, the initial excitement has faded into broader -- and, among Afghans, all-too-familiar -- concerns over mismanagement, impunity and corruption. The country has failed to make even the most basic legal and regulatory changes, and even President Ashraf Ghani recently expressed fear that "we are faced with the curse of natural resources."

Javed Noorani, an Afghan analyst who has written extensively about extractive industries, said: "We have to define a vision for our mines and how we go about extracting each. In the current reality, where do we have security control and can provide the most basic governance and oversight?"

But Mr. Ghani's government seems to be perpetuating the old way of doing business. The Afghan National Security Council, over which Mr. Ghani presides, ordered the termination of the Lajwardeen contract and moved to reopen the bidding. The council also proposed bringing the militia into the government framework. Such a change would set a strange precedent: failing to protect a contractor from a seizure of assets.

The decision to cancel the contract was made in November 2014, the National Security Council said in a statement, because the contractor's progress had not met the terms of the agreement and the mine was being used by "irresponsible armed men. …

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