The Taliban’s Quest for Foreign Funding Starts With China
The Taliban are focusing on the countries that are most likely to be interested in investing in Afghanistan, notwithstanding its human rights record or potential for violence.
By Aarish U. Khan
DIPLOMAT
October 25, 2023
GUEST AUTHOR
Aarish U. Khan is a research analyst at the Institute of Regional Studies in Islamabad, Pakistan.
October 25, 2023
Credit: Depositphotos
While the West is adamant about isolating the Taliban regime in Afghanistan, owing to its human rights record, the latter is having some success in finding alternative avenues of economic cooperation. The most promising support seems to be coming from China.
The Taliban have for some time been looking to formally join the Chinese Belt and Road Initiative (BRI) to benefit from Chinese investment in the mining sector of Afghanistan. Taliban’s Acting Minister for Commerce and Industry Haji Nooruddin Azizi traveled to Beijing to attend the Belt and Road Forum held on October 17-18 to mark the 10th year of the multi-billion-dollar project. Azizi shared with journalists that he had made progress with his Chinese counterparts to bring Afghanistan into the BRI fold and revive investments in projects like the Mes Aynak copper mines and the Qashqari oil field.
The Mes Aynak copper mines, located in Logar province of Afghanistan, are believed to have untapped copper deposits to the tune of $50 billion. A Chinese joint venture named MCC had won a 30-year contract for the extraction of copper from the site in 2008, during the term of former Afghan President Hamid Karzai. However, the project could not kick off because of security issues and was abandoned in 2014. Since coming back into power in August 2021, the Taliban have revived efforts to reattract Chinese FDI to the project. While the two sides have been in negotiations over the mines for over a year now, differences over taxation and royalties remain to be addressed.
The Qashqari oil field, on the other hand, is already operational. Daily extraction currently stands at 300 tons per day. The Taliban government, however, is hoping to expand production to 1,000 tons per day. To that end, the Taliban are wooing the Chinese National Oil Company to invest another $162 million this year and $540 million in the next three years.
While human rights concerns remain the main hurdle to international cooperation with the Taliban, Chinese pronouncements and actions suggest that Beijing is not likely to treat them as an obstacle in establishing economic linkages with Afghanistan. In April, the Chinese Ministry of Foreign Affairs, in a position paper on Afghanistan, pledged not to interfere in Afghanistan’s internal matters, including religious beliefs and national customs. Then-Chinese Foreign Minister Qin Gang added that women’s rights weren’t the “root-cause of Afghanistan’s problems.”
Beijing backed up its statements of sympathy and support toward the Taliban by appointing a full-time ambassador to Afghanistan in September, something no other country has done.
Given the context, Afghanistan under the Taliban could soon be joining the BRI. Becoming part of the BRI will not only open avenues of international economic cooperation for the Taliban but also provide diplomatic validation by a major global power.
Like Beijing, Doha — which mediated the 2021 agreement resulting in the U.S. and NATO withdrawal from Afghanistan — is also economically engaged in Afghanistan. Earlier this month, contracts worth $200 million were signed between the Taliban’s Ministry of Mines and Petroleum, one company from Qatar, and two domestic companies for the development of the Jabal Saraj cement plant in Parwan province. The agreement was the result of 10-month-long negotiations with Afghanistan’s Ministry of Mines and Petroleum, according to the involved Qatari company.
The Taliban are also engaged in economic diplomacy with neighboring Iran and Turkmenistan. The Afghanistan Railway Authority recently signed a contract with the Iranian Railway Consortium for the operation of the Khaf-Herat railway line. The Taliban have also roped in a domestic company to finance the remaining portion of the 500kv transmission line from Turkmenistan to Kabul at a cost of $75 million to import energy from Turkmenistan. The project, which was also started in 2016 with the financial support of the Asian Development Bank, was not completed during former Afghan President Ashraf Ghani’s term.
Human rights concerns, especially the treatment of women, and the Taliban’s connections with global terrorist networks are going to keep the West wary of economic engagement with the Taliban government in Afghanistan. As a result, the Taliban are starting with the countries that are most likely to be interested in engaging in economic diplomacy and actual investments in Afghanistan notwithstanding its human rights record or potential for violence. The Taliban have achieved a remarkable level of success with the Chinese, which could not only assist in bolstering the domestic and international legitimacy of the regime but could also play a role in improving the lives of Afghans at a time of international isolation.
It is yet to be seen, however, whether China’s economic cooperation with the Taliban is going to save the Afghans from human rights violations and the region and the world from terrorism emanating from Afghanistan – or make matters worse on both counts.
The Taliban have for some time been looking to formally join the Chinese Belt and Road Initiative (BRI) to benefit from Chinese investment in the mining sector of Afghanistan. Taliban’s Acting Minister for Commerce and Industry Haji Nooruddin Azizi traveled to Beijing to attend the Belt and Road Forum held on October 17-18 to mark the 10th year of the multi-billion-dollar project. Azizi shared with journalists that he had made progress with his Chinese counterparts to bring Afghanistan into the BRI fold and revive investments in projects like the Mes Aynak copper mines and the Qashqari oil field.
The Mes Aynak copper mines, located in Logar province of Afghanistan, are believed to have untapped copper deposits to the tune of $50 billion. A Chinese joint venture named MCC had won a 30-year contract for the extraction of copper from the site in 2008, during the term of former Afghan President Hamid Karzai. However, the project could not kick off because of security issues and was abandoned in 2014. Since coming back into power in August 2021, the Taliban have revived efforts to reattract Chinese FDI to the project. While the two sides have been in negotiations over the mines for over a year now, differences over taxation and royalties remain to be addressed.
The Qashqari oil field, on the other hand, is already operational. Daily extraction currently stands at 300 tons per day. The Taliban government, however, is hoping to expand production to 1,000 tons per day. To that end, the Taliban are wooing the Chinese National Oil Company to invest another $162 million this year and $540 million in the next three years.
While human rights concerns remain the main hurdle to international cooperation with the Taliban, Chinese pronouncements and actions suggest that Beijing is not likely to treat them as an obstacle in establishing economic linkages with Afghanistan. In April, the Chinese Ministry of Foreign Affairs, in a position paper on Afghanistan, pledged not to interfere in Afghanistan’s internal matters, including religious beliefs and national customs. Then-Chinese Foreign Minister Qin Gang added that women’s rights weren’t the “root-cause of Afghanistan’s problems.”
Beijing backed up its statements of sympathy and support toward the Taliban by appointing a full-time ambassador to Afghanistan in September, something no other country has done.
Given the context, Afghanistan under the Taliban could soon be joining the BRI. Becoming part of the BRI will not only open avenues of international economic cooperation for the Taliban but also provide diplomatic validation by a major global power.
Like Beijing, Doha — which mediated the 2021 agreement resulting in the U.S. and NATO withdrawal from Afghanistan — is also economically engaged in Afghanistan. Earlier this month, contracts worth $200 million were signed between the Taliban’s Ministry of Mines and Petroleum, one company from Qatar, and two domestic companies for the development of the Jabal Saraj cement plant in Parwan province. The agreement was the result of 10-month-long negotiations with Afghanistan’s Ministry of Mines and Petroleum, according to the involved Qatari company.
The Taliban are also engaged in economic diplomacy with neighboring Iran and Turkmenistan. The Afghanistan Railway Authority recently signed a contract with the Iranian Railway Consortium for the operation of the Khaf-Herat railway line. The Taliban have also roped in a domestic company to finance the remaining portion of the 500kv transmission line from Turkmenistan to Kabul at a cost of $75 million to import energy from Turkmenistan. The project, which was also started in 2016 with the financial support of the Asian Development Bank, was not completed during former Afghan President Ashraf Ghani’s term.
Human rights concerns, especially the treatment of women, and the Taliban’s connections with global terrorist networks are going to keep the West wary of economic engagement with the Taliban government in Afghanistan. As a result, the Taliban are starting with the countries that are most likely to be interested in engaging in economic diplomacy and actual investments in Afghanistan notwithstanding its human rights record or potential for violence. The Taliban have achieved a remarkable level of success with the Chinese, which could not only assist in bolstering the domestic and international legitimacy of the regime but could also play a role in improving the lives of Afghans at a time of international isolation.
It is yet to be seen, however, whether China’s economic cooperation with the Taliban is going to save the Afghans from human rights violations and the region and the world from terrorism emanating from Afghanistan – or make matters worse on both counts.
GUEST AUTHOR
Aarish U. Khan is a research analyst at the Institute of Regional Studies in Islamabad, Pakistan.
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