Karzai Commits to Contract Transparency, But the Devil Is in the Details

Afghan President Karzai at the signing of the Strategic Partnership Agreement (Flickr/WH)
Country: Afghanistan
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In the face of growing public skepticism, Afghan President Hamid Karzai is taking new steps to ensure the country's natural resource wealth benefits its citizens. Following a 26 June speech to the national assembly, Karzai has recently issued a decree outlining the role of government ministries in ensuring a transparent and accountable system for mineral sector development.

Included in this decree is an administration commitment to “publish all contracts with details” with national and international companies from the past three years, and to finalize a contract transparency plan based on “agreed international principles and with considerations of the future of the country.” The Ministry of Mines must also complete and present to the cabinet a new mining law within two months of the presidential decree.

If well-implemented, the decree will be a first step in addressing criticism from international sources and increasingly from within Karzai’s own administration. On 26 July, The New York Times reported objections by senior cabinet officials to the mining law drafted by the Ministry of Mines because it appeared to appease foreign interests. Among cabinet officials' objections: the revolving door of former administration advisors leaving government service to work for  private companies seemed to reflect a too-cozy relationship between foreign interests and those responsible for the stewardship of the country's natural resources.

Karzai's decree follows similar commitments made by the Afghan government in its statement following the Afghanistan Cooperation Conference in Tokyo last month and in the Strategic Partnership Agreement with the U.S. signed in May.

At the Tokyo conference, donor countries including the U.S., Japan and Germany committed $16 billion in aid over the next four years; but Afghanistan will continue to be aid dependent unless a sustainable source of public financial revenue can be attained. With abundant potential for oil, gold, copper, gemstones and other riches, Afghanistan is poised to become a significant exporting country, but only if it can secure the best deal for these valuable commodities.

With mineral deals facing scrutiny by senior officials, it is imperative the Afghan government disclose all past and future contracts, both to reduce the potential for corruption and to enable public review and debate over whether the country is in fact getting the best possible deal. The new mining law must include strong contract transparency provisions if the country is to realize its greatest national asset: peace and prosperity.

Katarina Kuai is RWI Training and Capacity Development Program Officer. Suzanne Ito blogs for RWI.

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