18 Nov

Introduction :

The Interim Afghan Government's ((AG) financial constraints and the confiscation of Afghan Central Bank reserves have had a direct impact on the nation's economy. Economic instability has made it possible for adversarial forces to use the populace as a tool to further their nefarious goals. With the right infrastructure and trade relationships, Afghanistan's untapped natural resources can be used to generate significant economic growth. Regional connectivity projects can play in supporting Afghanistan's economic development, while also emphasizing the need for a stable political environment to attract foreign investment.

Economic Potential of Afghanistan :

i. Leveraging its geo-economic location

The Afghan Government can utilize its resources and location for economic growth and reduce reliance on outside aid, limiting space for hostile groups. Economic cooperation between Central and South Asia, rooted in centuries of trade, is crucial for future development. Connecting energy markets between the two regions has gained global attention.

ii. Securing FDI from Energy Projects :

The CASA-1000 energy project and TAPI gas pipeline are ongoing initiatives in the region. The $10 billion project will provide a large portion of the funding to Afghanistan, creating many local jobs and generating foreign direct investment.

iii.  Potential to expand its mineral exports :

Afghanistan boasts abundant resources, including uranium, zinc, copper, iron, marble, and gem stones. In 2019, major partners for mineral exports included Pakistan, Turkey, China, Iran, and Jordan. Iron ore, with a value of over USD 350 billion, was estimated at more than 2.2 billion tonnes. With appropriate laws and memorandums of understanding, Afghanistan has potential to expand its mineral exports globally.

iv. Untapped Lithium and Gold Resources: 

Afghanistan's gold resources are valued at over $170 million, with projected 2,700 kg. The country is dubbed the "Saudi Arabia of lithium" by an internal US Department of Defence report, estimating its resources at approximately $l trillion. However, the potential remains untapped without an investor-friendly environment created by the lAG.

Regional Connectivity of Afghanistan

China and Pakistan are looking to extend the China-Pakistan Economic Corridor (CPEC) to Afghanistan, recognizing the importance of regional connectivity and Afghan economic success.

  • China sees Afghanistan's strategic geographic location as critical for integration with regional nations.
  • CPEC may help strengthen relations between Kabul and Islamabad and reduce Afghanistan's reliance on outside aid.
  • Pakistan has started constructing roads to increase connectivity, which can provide Afghanistan with opportunities to expand its trading options.

In addition to its abundant mineral resources, Afghanistan's principal exports include carpets, rugs, dried fruit, and medicinal plants. Bilateral commerce between Pakistan and Afghanistan has seen significant growth, with Pakistan's ports providing crucial access to global markets for Afghanistan's exports.


Afghanistan's economic potential is largely untapped due to ongoing conflicts, lack of infrastructure, and investor-friendly policies. However, initiatives such as the CASA-1O00 energy project, TAPI gas pipeline, and the extension of the CPEC to Afghanistan offer promising opportunities for economic growth and stability. To fully realize its potential, Afghanistan needs to prioritize peace and security, develop infrastructure, and establish investor-friendly policies. With the right strategies and support from regional partners, Afghanistan can become an important hub for trade and commerce in South and Central Asia.

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