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3 fears emerged when Kabul fell. A year later, none of them have come true

Like the US and Soviet Union before it, China is discovering the grand plans of Great Powers don’t survive contact with the realities in Afghanistan.

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Eyes closed, it’s possible to imagine the inelegantly designed ten-storeyed towers clustered on Sar-e-Sabzi in Kabul as the kernels of Shanghai’s Lujiazui business district, rising from a great river of light. True, the bright red sign on the buildings invoking President Xi Jinping’s Belt and Road Initiative is rarely illuminated—but ChinaTown’s plans to build a dedicated power station were derailed by war. The plant, it is being promised, will come up soon, together with an industrial park, factories and offices.

One year ago this week—as the Islamic Emirate’s flag rose over Kabul, and the last American evacuation flights left the city—many feared the new Taliban regime would unleash terror across the region, by providing safe havens to its transnational jihadist partners.

Foreign ministry officials in Beijing exulted as the United States was evicted from Afghanistan. To them, the rise of China as the regional hegemon in central Asia—with no competing Great Power to contain its ambitions—now seemed certain. Islamabad, they believed, would work with the Taliban to end the violence. Then, a tidal wave of mining and infrastructure projects would be unleashed, locking Afghanistan into a new, Chinese-led order.

Yu Minghui, ChinaTown’s founder, had refused to leave Kabul when the city fell to the Taliban. “We don’t want to give local people the impression that us Chinese are unreliable and will escape at the first sight of trouble,” he said in an interview.

Things aren’t quite running to plan, though. Afghanistan remains awash in violence, inflicted by competing jihadist groups.

Also read: Is Pakistan the bad boy of South Asia? Its military Deep State hurts neighbours

In the bowels of Afghanistan

Lithium—the soft, silvery-white metal that is powering the transformation of the world’s transport sector out of hydrocarbon dependence—was supposed to help write the new Afghanistan story. The Pentagon, in 2010, announced that Afghanistan had a staggering $1 trillion in locked-up mineral resources. Ghazni was predicted to become the Saudi Arabia of lithium, ahead of Bolivia. Elsewhere lay enormous veins of rare earths, and great mountains of iron, copper, cobalt and gold.

Frik Els was among experts sceptical of the hype. For one, the purportedly new discoveries had in fact been made—and published—by Soviet geologists three decades earlier. The new United States Geological Survey studies, moreover, estimated “quantitative probabilistic estimates of undiscovered deposits”—not actual extractable resources.

Like in the Soviet era, years of on-ground prospecting, and the development of infrastructure like roads and railway lines to carry resources to markets, were needed before the hype could be realised. In troubled Afghanistan, these were not small things.

India drew up plans centred around iron oxide deposits in Hajigak, which it hoped to link through a $150 million railway network to bauxite and urea industries in Iran, and on to an $85 million port at Chabahar. The realities of conflict in Afghanistan, and sanctions directed at Iran’s nuclear programme, killed the project.

Fraud allegations surfaced as the United States unleashed a $500 million push to exploit mineral resources. Funds for some attractive projects were simply embezzled. Centar, which promised 13,000 jobs and $1 billion in revenues from its planned gold operations in Badakhshan, could never begin work.

China’s grand plans also went nowhere. In 2007, state-owned China Metallurgical Group won the right to extract copper from Mes Aynak, in Logar. China Metallurgical was to have invested $3 billion, including the construction of a railway to Torkham in Pakistan and a dedicated power plant. Even though $371 million is estimated to have been spent, there’s nothing to mark the Mes Aynak site except some barbed wire.

Also read: Can’t return to Taliban, can’t stay in uncertainty in India—Afghan students’ woes only rise

The hard earth

Fabled as Afghanistan’s mineral wealth might be, mining corporations know there are other, safer places where similar treasure is to be found. China has already made large investments in Argentina, Bolivia and Chile, which are home to more than half of the world’s exploitable lithium reserves. Gangfeng Lithium is the largest stakeholder in Argentina’s Caucharí-Olaroz, the largest new lithium brine in decades. Tianqi Lithium owns a quarter of Sociedad Química y Minera, the world’s largest lithium producer.

Even though Afghanistan is closer to China than Latin America, expensive road and rail infrastructure will have to be built to make operations workable. “Chinese companies can more easily acquire critical minerals from alternative sources,” scholars Matthew Funaiole and Brian Hart write, “and they know well the risks and headaches that come with doing business in Afghanistan.

The Bayan Obo mining complex in Inner Mongolia, notably, holds more than 48 million metric tons (mmt) of rare earths—a vastly larger reserve than Khan Nashen in Afghanistan, where there is just an estimated 1.3 mmt.

Islamic Emirate leaders—having ruptured their relationship with the Western donors who provided the equivalent of 43% of the country’s GDP and funded 75% of its public expenditure—know they desperately need cash.

In the build up to 2020, scholar Kate Clark has noted, the Taliban raised revenue by taxing residents in areas under their control, as well as illegal mining and narcotics operations. Finance for the government, though, was paid by the Afghan state—and now that’s dried up.

The Islamic Emirate, then, needs cash, fast. To get it, though, it’ll have to first build a credible state structure—and that seems a distant reach.

Also read: ‘What’s there to celebrate,’ Afghans ask as Taliban mark one year in power in Kabul

A tightening BRI

Elsewhere in the region, China has shown willingness to pump in money to stabilise strategically important neighbours. Eximbank, China’s state-owned giant, loaned some $70 million to build Tajikistan’s Vandat-Yovan railway in 2014, and another $290 to construct a high-altitude road from Chanak to the capital, Dushanbe. The work was undertaken by Chinese engineering funds, using Chinese workers. This meant that while a large part of finance went back to that country, a thoughtful EurasiaNet analysis noted, the debt stayed in Tajikistan.

Tajikistan—which was torn apart by a savage civil war from 1992-1997—continues to be at threat from jihadist groups. For China, the jihadist threat to Tajikistan—coming in the main from insurgents linked to the Islamic State—holds out the risk of spilling eastwards into its borders. Tying a volatile neighbour to itself through BRI projects makes strategic sense.

Like in Sri Lanka, though, the price of not repaying has been high. In 2017, when it failed to repay a $330 million loan for the construction of a power plant in Dushanbe, Tajikistan was forced to hand over concessions to its Upper Kumarg and Eastern Duoba gold mines to the Chinese company. Kashgar Xinyu Dadi Mining Investment, another Chinese mining firm, has been given a long-term exemption from taxes and customs duties.

In addition, Tajikistan has been forced to cede significant territories to China in controversial border deals, which critics argue are one-sided.

An estimated 60% of the $3.3 billion that Tajikistan owes foreign creditors came from China’s state-run Export-Import Bank—roughly three times the ratio in Sri Lanka.

Likely, China would look to lock the Afghan emirate into similar arrangements, but the case of the mining sector shows there’s one key catch: the Afghan state remains in a state of endemic lawlessness, where delivering on projects is near impossible.

Islamabad was to have delivered the keys to the new Afghanistan, by pushing its Taliban clients into power-sharing agreements that would stabilise the polity. Instead, the two main Taliban factions—led by the jihadists of Kandahar and their competitors, the Haqqani Network—remain in conflict. The large pool of young, prospect-less jihadists who fought with the Taliban are seeking new opportunities with groups like the Islamic State. Inside Pakistan itself, the factional struggles of the Afghan Taliban are facilitating the Tehreek-e-Taliban Pakistan.

Like the United States and Soviet Union before it, China is discovering the grand plans of Great Powers don’t survive contact with the realities in Afghanistan.

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