Sunday, November 23, 2014

Minister of Economy Abdul Hadi Arghandehwal Addresses UN Commission on Sustainable Development Roundtables on Mining and Transportation

H.E.,  the Minister of Economy of the Islamic Republic of Afghanistan Mr. Abdul Hadi Arghandehwal has addressed the 19th Session of the United Nations Commission on Sustainable Development, which brings together ministers as well as government high officials and representatives of international organizations and civil society to discuss the way forward in national and international development.

During his address on mining, Minister Arghandehwal emphasized the significant production potential of Afghanistan’s mineral resources.  He explained how Afghanistan’s mineral deposits remain largely untapped, and that a recent United States Geological Survey (USGS) study estimated Afghanistan’s mineral reserves to be worth up to 3 trillion dollars.   He shared that “Most of these deposits include significant reserves of iron ore, copper, cobalt, gold and industrial production metals such as lithium. Studies also suggest that Afghanistan has large deposits of niobium and other rare earth elements. The deposits are large enough to make Afghanistan a major global producer of these minerals.”

Focusing on the production potential of these mineral reserves, Minister Arghandehwal told of the significant foreign direct investment flows Afghanistan has already attracted, particularly with the MCC company for the exploration and processing of Aynak copper deposits.  Of note, he shared that this MCC investment will include the construction of more than 600 km of railroad and a 400 MW power plant.

The Minister of Economy went on to highlight current contributions to the Government of Afghanistan from mining revenues.  He noted that the Government currently receives US$20-25 million annually in mining revenues.  Further, he explained that according to IMF projections, the mining sector is expected to contribute an average of $11 billion per annum over the five years between 2014/15 to 2019/20, and that this is expected to rise to a projected average of $17 billion per annum in the 10 years between 2020/21 to 2029/30.

In addition, he addressed the challenges that lie ahead, including higher capital investments and operating costs required for the development of Afghanistan’s mining sector, the development of infrastructure for support operations, capacity building, establishing a connected transportation system to enable trade, and the establishment of effective policies for revenue management, benefit sharing, and public-private partnerships for infrastructure development.

The Minister also shared Afghanistan’s long-term vision, “To develop an economically vibrant mineral sector which creates jobs, develops infrastructure, generates domestic revenue and ensures inclusive economic growth for the benefit of all Afghans.” He added that “Mining in Afghanistan has the potential to be a driver of a poverty reduction and sustained growth, if managed properly.” Further, Minister Arghandehwal acknowledged that these developments will require strategic action and vision in order to create an enabling environment for private sector investments, including field security, good governance, and overall transparency.

During his address on transportation, Minister Arghandehwal highlighted the impact of prolonged conflict on Afghanistan’s transportation sector, noting the challenges that lie ahead in construction and restoration efforts alongside the opportunities for economic development and for the improved living standards of the Afghan people.

Focusing on the specific challenges for Afghanistan, he underscored the impact of turmoil on transportation, which has left behind damaged roads and structures and has turned away international air carriers and other sectors from investing in and servicing Afghanistan’s transportation needs.

The Minister of Economy also specified that “The government of the Islamic Republic of Afghanistan’s strategic vision and goal for the transport sector is to have a safe, integrated transportation network that ensures connectivity and that enables low-cost and reliable movement of people and goods domestically as well as to and from foreign destinations. This will give impetus to economic growth and employment generation and help integrate Afghanistan into the global economy. A high priority is to have in place an efficient and viable road transportation network for achieving economic growth and poverty reduction, particularly in rural areas.”  To this end, Minister Arghandehwal spoke of the many gains Afghanistan has made in building and restoring transportation infrastructure in the country.  He explained the progress that had been made with roads, railways, and civil aviation as well as the legal and regulatory gains that have been made for effective governance and for the facilitation of trade.

Further, Minister Arghandehwal drew attention to the fundamental role of transportation for economic growth, stability, and peacebuilding in Afghanistan, and that this relationship necessitates the strategic development of the Afghan transportation sector.  He noted that Afghanistan is currently “…working to develop and complete a network of regional roads to connect to neighboring countries, the coordination of funding for the implementation of projects, quality control and the development of a sustained operation and maintenance of roads, organizational strengthening and capacity building of technical staff, and strengthening the role and relation of private sector in road construction and maintenance.”

During his addresses on both mining and transportation, Minister Arghandehwal expressed Afghanistan’s appreciation for the organization of CSD 19 and for the continued support and commitment of the international community for stabilization and security in Afghanistan.