AFGHANISTAN is becoming a classic case of the resource curse. Riven with factional fighting and reliant on a conflict economy, the theories of the resource curse are highly applicable to Afghanistan, presenting a gloomy prognosis of its economic and political future.
Despite the much-touted claims of $1 trillion in untapped mineral potential, Afghanistan has failed to realise that potential due to internecine conflict amongst various factions. On the one hand, there is a major division between the northern factions and the Interim Afghan Government, better known as the Afghan Taliban. On the other, there is an intense rivalry within the IAG between the Kandahari faction led by Mullah Hibatullah Akhundzada and the Haqqani faction based in Kabul. There are rich mineral deposits in the north and east of Afghanistan where Tajiks, Uzbeks and Hazaras mostly live. These groups resent any extraction of natural resources on their lands through IAG-sponsored projects.
The case of the Aynak copper mine offers interesting insights into the non-viability of the project. Problems include increased cost due to underground versus open-pit mining, lack of water for on-site smelting, high logistics cost for transportation of minerals away from the site, high cost of local power generation, and contentious royalty issues. The security cost due to attacks on Chinese workers has also been a dampener for investors. Deep down, the issue of internal jousting for control and royalty between the Kandahari and Haqqani factions is a major obstacle.
If a country lacks strong political institutions and a sound industrial base, and is not well integrated into the world economy, its susceptibility to the resource curse is a given. If Afghanistan starts mineral exports without functional banking and economic institutions, it runs the risk of contracting ‘Dutch disease’, in which inflation and the consequent high cost of imports nullify the export advantages, besides discouraging investments in non-resource sectors. Another downside of the resource economy is the risk of encouraging authoritarianism.
Infighting prevents Afghanistan from realising its mineral potential.
The worst impact of the resource curse is the prolongation of internal conflicts due to the ability of criminal gangs and militant factions to earn rents through resource exports and to use those for the continuance of conflict.
There are terrorist groups in Afghanistan, such as IS-K, Al Qaeda, ETIM, IMU and TTP, that are part of the internal and external conflict dynamics of the country. If these terrorist entities are in an ‘entente cordiale’ with the IAG, then they are also likely to stake a claim to Afghanistan’s mineral resources and use the income to consolidate their hold over the illicit Afghan economy. The internal conflict mosaic of Afghanistan also makes the actualisation of mineral resources extremely difficult as involvement in the extraction business by foreign companies might attract international censure along the lines of UNSC Resolution 1173.
The real fight over $1tr in mineral reserves is presently between the Kandahari and Haqqani factions of the IAG. Both are competing not only in a military capacity but also in resource mobilisation, as a result of which the mineral-rich provinces, largely inhabited by non-Pakhtun communities, bear the environmental, social and economic costs while deriving limited benefit from resource extraction. Major mineral resources are found in Hazarajat (Bamiyan, Daykundi — copper, coal), the north (Badakhshan — gems, lapis; Balkh/Sar-e Pol — gas, coal), and the east (Nangarhar, Logar — copper, gems, jade).
Though political power lies with the Kandahari faction, it was the business-savvy Haqqani faction based in the east that, after 2021, controlled customs, ports and the passport directorate, through which a huge share of state revenue flows. The Kandahari faction is now pushing back against that control by moving Haqqani-aligned officials out of customs and ports, replacing them with its own loyalists to wrest control of the most lucrative revenue stream in the country.
The tense stand-off between the two factions continues as Kandahar deploys troops in Badakhshan to assert the central government’s authority while the Haqqanis still manage to divert mining revenue away from mining sites in the east. As for the people, they lose either way. Mining under this system has promoted child labour, environmental destruction, and forced displacement of proximate communities. The extraction happens on their land, the profits leave the province, and neither faction is accountable to them.
Poor governance, non-existent institutions, terrorism, and a conflict economy have ensured that Afghanistan’s mineral resources have become a resource curse for that country.
The writer is a PhD from Nust.
Published in Dawn, September 8th, 2026
