Islamic Republic of Afghanistan - Enhanced Integrated Framework ...

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The Afghanistan Compact Benchmark calls foran enabling regulatory environment for profitableextraction of Afghanistan's mineral andnatural resources to be created and for the investmentenvironment and infrastructure to beenhanced so as to attract significant domesticand foreign direct investment by end 2010.Current SituationWhile geological studies of Afghanistan havebeen conducted over the last 50 years, 90 percentof the territory of Afghanistan has notbeen systematically studied despite highlypromising findings. A geological map of Afghanistanhas been prepared and over 400mineral deposits have been identified includingcopper, coal and a number of small andmedium deposits including gold, silver, platinum,zinc, nickel, emerald, lapis, ruby, kuznite,tourmaline, fluorite, chromite, salt, radioactiveelements and numerous deposits suitable forconstruction materials.The availability of oil and gas fields in Afghanistanhas been well known for almost 50years. Russian equipment was used to explorethe first fields. Subsequently, gas fields inYateem Taq, Khwaja Gogerdak, Khwaja Bolan,Zigdeli and Bayan of Ghor province as well asoutskirts of Sheberghan district of Jowzjanprovince have been identified. Afghan andRussian experts identified a total of 500 structuresof which 67 were extended with exploratoryapproaches. Known gas reserves have acapacity of 180 billion cubic meters and an exploitationcapacity of 120 billion cubic meters.Sar-e-pul oil reserves have been identified(44.5) million tons with the extractable reservesof 14.5 million metric tons. During the past fewyears, five oil and gas fields have been identified.More work has been carried out in thevicinity of Amu Darya, and Afghan-Tajik basins.The first major investment has recently beenannounced for developing the Aynak copperdeposits in central Logar province, an almost$3 billion investment. The selection of thecompany was made after an extensive evaluationof tenders from nine major internationalmining companies. There will be importantindirect benefits from this investment. Thecompany will establish a power station with400 mega watt capacity at a cost of over $400million and will construct a town for the workersof the company. The company will alsoestablish a railway route from Hairatan port innorthern Afghanistan to Torkham in easternAfghanistan. Ongoing and planned activitiesinclude the: (i) fertilizer and power plants atBalkh with capacity of 110,000 tons of urea eachyear, and 48 mega watt power per hour;(ii) Ghori cement factory with capacity of100,000 tons per year; (iii) Jabal Seraj cementfactory with maximum capacity of 30,000 tonsper year; and (iv) Herat cement factory andGhori 2 with capacity reaching 200,000 annually.In July 2005 a Minerals Law was approved bythe Government. In December 2005, a HydrocarbonsLaw was also approved. Regulationsare being drafted which may be finalized during2008.Some of the most immediate needs of the sectorare being addressed as part of a $30 millionproject supporting sustainable development ofnatural resources. The main purpose of thisproject is to assist the Ministry of Mines to improveits capacity to effectively transform thesector so that it is primarily operated by theprivate sector and contributes to sustainableeconomic growth through tax revenues, employment,rural development and economicspin-offs. The major institutional strengtheningobjective of the project will be to assistMoM to make the transition from a producer ofminerals and other commodities to a policymaking institution that will facilitate the operationof private firms within the industry. It willalso strengthen financial and budgetary proceduresin the ministry, assist with the internalgeological survey work being done, assist inidentifying unlicensed mining operations, andattempt to enforce improved and safer workmining work practices.The landlocked nature of Afghanistan and thecurrent lack of rail links represent a barrier tothe movement of large bulk commodities. Securitydifficulties limit mining in some areas,principally in the south. Roads, energy andwater are all lacking. The danger of unexplodedordnance makes mining difficult. Thereis a shortage of trained labor. Most of the stateownedmining enterprises are not operating ona commercial basis. The North Coal Enterprisehas been privatized and is operating successfullywhile Mineral Exploitation Enterprise andAfghan Gas are about to be privatized.106Afghanistan National Development Strategy (ANDS)
This Sector Strategy incorporates feedback andcomments from the Sub National Consultations(SNCs). A key finding was the lack of informationavailable to local communities on mineopportunities. There is also reflected a lack ofmarket-based thinking and considerable expectationfor the Government to provide sectorsupport. It should be noted that investments inthe mining sector are primarily commercialdecisions that should be taken by the privatesector. Projects identified and prioritized duringthe SNC process include the extraction ofmarbles, precious and semi precious stonemines in Anaba and Shotol districts of Panjshirprovince. The Ministry of Mines has beenidentified as the responsible agency for enablingthis development.Policy framework: sector strategyThe sector strategy is geared to supporting developmentthrough private firms engaged in amix of large and small operations. The privatesector will operate within a legislative andregulatory framework designed to facilitateinvestment and maintain a competitive sector.While there will be some public sector activity,these will be required to operate under thesame legislative and regulatory framework asthe private sector. The focus will be on usingGovernment projects or competitive biddingfor exploration contracts to better determinethe extent of natural resources in Afghanistan;on the establishment of an improved, transparentand capable management system for theeffective extraction of mines and natural resources;and the establishment of a regulatoryenvironment that facilitates local and internationalinvestment in the mining sector.The key reform will involve the refocusing ofthe Ministry of Mines from one involved inproduction to one that is primarily concernedwith the creation of an enabling environmentthat requires mining companies to operate effectivelyand responsibly in accordance withthe law. Mining legislation will be passed andimplemented. Planned actions include explorationand exploitation of mineral resources bythe private sector or MoM; capacity buildingprograms; successful implementation of theAynak project; development of long term geoscienceprojects; and a reconstruction programincluding equipping the laboratory and technicalsections of the ministry. Steps will also betaken to raise the production level of gas andincrease utilization of mineral and gas resources;encourage expansion of the cementindustry and increase power supplies by raisingthe production of mineral resources, oil, gasand underground water; and increase the productionof urea. The main programs of the sectorare (i) Implementing PRR (ii) Legislativeaffairs completion (iii) A comprehensive geologicalstudy follow- up program in the country(iv) Exploration and exploitation of mineralresources by private sector or geology surveyof MoM (v) Exploration, extraction and exploitationprogram of gas and oil fields in the countryby the government or private sector (vi)Capacity building (vii) Long term geo scienceresearch (viii) Reconstruction program, equippingof laboratory and technical section of theministry (for detail refer to ANDS Volume II).Priority Projects: Top priority projects, in orderof priority are:• completing and implementing the hydrocarbonsregulations by Ministry of Justice;• finalizing of Afghanistan gas law (downstream);• completing the second round of PRR in theMoM;• providing background information andinvite bidding for three blocks of oil andgas in the northern provinces aimed at explorationand exploitation.Expected outcomesGiven the known mining resources that areavailable, implementation of this strategy willlead to considerable investment in small andlarge projects. Mining will play a major role inachieving the high rates of economic growthenvisioned in the ANDS and increased governmentrevenues. Increased revenues will bederived from mining royalties, taxes and customsrevenues on largely private operations aswell as through licenses, permits and othertaxes charged as part of the bidding process.Mining projects will generate employment opportunitiesfor thousands of citizens, in remoteareas where alternative legal productive opportunitiesare few. Mining firms will increasinglyenter into the formal part of the economy.They will operate within a legislative frameworkthat is accepted and impartially administeredby MoM. Mining will bring with it accessEconomical and Social Development 107
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In the name of Allah, the most Merc
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Executive SummaryI. INTRODUCTIONAfg
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Executive Summarydeveloping capacit
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2. The Afghan National Police (ANP)
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Afghanistan National Development St
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Afghanistan National Development St
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Executive SummaryWater Resources Ma
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Executive Summarystrengthen the ref
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Executive Summaryfor Capacity Devel
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Executive SummaryOver the past five
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Executive SummaryA key priority of
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Executive SummarySustaining the nas
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Islamic Republic of AfghanistanAfgh
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Map of AfghanistaniiiAfghanistan Na
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Map of Afghanistan ................
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Current situation: assessment of ai
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ACACBARADBADCAfCERTAFMISAGOAIHRCAIS
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Glossary of Afghan TermsAmu DaryaBa
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percent of the seats in the Nationa
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capacity limitations throughout the
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dress the security, governance, and
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PART IPROCESS, GOALSAND POLICYDIREC
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of the country’s 34 provinces are
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pertise, ability to manage risk and
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A Transport Sector Inter-Ministeria
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sion of service coverage and monito
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The regional cooperation initiative
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CHAPTER 2THE PARTICIPATORY PROCESS
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Figure 2.2. ANDS timeline 1385 - 13
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tation of projects. The PDPs develo
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Figure 2.3. Proportional representa
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• In the North East and Central H
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season being covered. To overcome t
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Consumption DisparityConsumption in
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correlated with higher involvement
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• Improving donor coordination an
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sickness or loss of a working famil
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CHAPTER 4MACROECONOMIC FRAMEWORKHig
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age points - from 42 percent of the
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Figure 4.4. Size of foreign assista
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ooooIncrease interdiction efforts a
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Consistent with the growth strategy
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policy, it will remain vigilant aga
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In the short term, the Government w
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groups and neutralizing armed eleme
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Page 116 and 117: Significant steps have been taken s
Page 118 and 119: Table 5.1. Integration of the Cross
Page 120 and 121: Current Situation in the SectorAfgh
Page 122 and 123: Justice system between government a
Page 124 and 125: Table 6.2. Key Objectives of the Na
Page 126 and 127: Current Situation in the SectorAchi
Page 128 and 129: Table 6.1. Cross cutting issues in
Page 131 and 132: CHAPTER 7ECONOMIC AND SOCIAL DEVELO
Page 133 and 134: commitments to increase the goods a
Page 135 and 136: investment opportunities cannot be
Page 137 and 138: Despite progress and efforts to dat
Page 139 and 140: tor regulator, which will adopt a t
Page 141 and 142: percent of households in Kabul and
Page 143 and 144: icy priorities and decisions pertai
Page 145 and 146: at the same time rehabilitating and
Page 147 and 148: Further, the unstable security situ
Page 149 and 150: ilitation that will provide all wea
Page 151 and 152: • Increased Agricultural Producti
Page 153 and 154: the poverty reduction goals. Carefu
Page 155 and 156: separate policies - one for basic t
Page 157 and 158: tions designed to promote Governmen
Page 159 and 160: • Urban Development: By the end o
Page 161 and 162: financing or co-production with use
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Page 167 and 168: high baseline level of 165 infant d
Page 169 and 170: temporary or permanent disabilities
Page 171 and 172: • the proposals that are consider
Page 173 and 174: In Higher Education, universities h
Page 175 and 176: the primary level. In rural areas,
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Page 181 and 182: covery, and peaceful development of
Page 183 and 184: • By end-2012/13 the Government w
Page 185 and 186: to re-forest Afghanistan (i.e., “
Page 187 and 188: policy making. However, lack of the
Page 189 and 190: countries through policy negotiatio
Page 191 and 192: Provide housing, facilities and soc
Page 193 and 194: Table 13.0.1. Cross Cutting Issues
Page 195 and 196: SectorAnti-CorruptionGendering fina
Page 197 and 198: SectorAnti-CorruptionGenderCounter-
Page 199 and 200: SectorSocialProtectionAnti‐Corrup
Page 202 and 203: CHAPTER 8CROSS-CUTTING ISSUESThe AN
Page 204 and 205: COUNTER NARCOTICSBackground and con
Page 206 and 207: inforcing the integrity of public a
Page 208 and 209: activities on gender. The Governmen
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Page 212: PART IIIAID EFFECTIVENESSANDCOORDIN
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children have enrolled in primary a
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crease donor support for preventive
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Increasing the volume and concessio
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tation of the PRGF. Moreover, the s
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CHAPTER 10IMPLEMENTATION FRAMEWORKT
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lation and execution capacities to
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By committing themselves to funding
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ROLE OF THE MTFFThe three year Medi
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Consultative Groups (CGs) will cont
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CHAPTER 11MONITORING FRAMEWORKThe A
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(for ISAF), Afghanistan Information
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Figure 11.2. ANDS Poverty Monitorin
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Table 13.1. Monitoring and Evaluati
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ANDS Monitoring and Evaluation Indi
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CHAPTER 12CONCLUSIONWhile significa
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larger and more efficient private s
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APPENDICES
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PILLAR : SECURITYSECTOR : SECURITYE
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PILLAR : GOOD GOVERNANCESECTOR : GO
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PILLAR : GOOD GOVERNANCESECTOR : GO
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PILLAR : GOOD GOVERNANCESECTOR : JU
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PILLAR : ECONOMIC GOVERNANCE AND PR
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PILLAR : INFRASTRUCTURESECTOR : ENE
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PILLAR : INFRASTRUCTURESECTOR : ENE
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PILLAR : INFRASTRUCTURESECTOR : TRA
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PILLAR : INFRASTRUCTURESECTOR : URB
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PILLAR : INFRASTRUCTURESECTOR : MIN
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PILLAR : INFRASTRUCTURESECTOR : WAT
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PILLAR : INFRASTRUCTURESECTOR : INF
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PILLAR : EDUCATION AND CULTURESECTO
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PILLAR : AGRICULTURE AND RURAL DEVE
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PILLAR: SOCIAL PROTECTION & REFUGEE
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APPENDIX IIMonitoring MatrixPILLAR:
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PILLAR: GOVERNANCE, RULE OF LAW AND
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PILLAR: GOVERNANCE, RULE OF LAW AND
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PILLAR: INFRASTRUCTURESECTOR: TRANS
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PILLAR: INFRASTRUCTURESECTOR: TRANS
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vincial capitalsImproved ICT covera
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PILLAR: EDUCATIONSECTOR: EDUCATION
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services able throughout Afghanista
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PILLAR: AGRICULTURE & RURAL DEVELOP
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PILLAR: SOCIAL PROTECTIONSECTOR: RE
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G:Islamic Republic of AfghanistanAf
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