The Afghan economy is paralyzed because of a large-scale drug production. It is known that poppy cultivation does not require much physical effort and complex irrigation processes. The determining factor of its seeding is incomparably high price as compared to other crops, availability of demand and opportunities to effectively realize it in external markets. It is believed that the opium is a non-alternative source of income for Afghan farmers. Nevertheless, the fight against this threat remains a top priority, given the fact that the core funding of the “Taliban” movement and other armed groups comes from drug trafficking.

A non-military solution of the Afghan problem primarily means the creation of alternative peaceful forms of economic activity. In this respect, Afghanistan has the essential capacity and resources. There are two strategic tasks, accomplishment of which may contribute to the economic growth of this country – development of the mining industry and national cross-border transport infrastructure.

Year by year, it becomes increasingly evident that the Afghan land is rich in a variety of useful natural resources. There are significant reserves of copper, iron, aluminum, natural gas and other types of minerals. According to the Ministry of Mining of Afghanistan, the total value of mineral resources of the country is at least trillion[1]. In particular, the “Aynak” field near Kabul has the world’s largest reserves of copper – about 13 million tons. As estimated by British and Chinese geologists, the development of this field can bring up to billion to the economy of Afghanistan. In May 2008, the Afghan government has approved agreement on the transfer of the “Aynak” deposit for exploration to Chinese mining company ‘China Metallurgical Group’ for 30 years. The deal amounted billion[2]. Under the agreement, the Chinese company will build the necessary infrastructure, including mine, power stations, railways, school, hospital and mosque. As observers note, field development will create up to 5,000 jobs for mine and power plant employees and another 15,000-20,000 for the staff of other objects of created infrastructure. In addition, about 4,000 people will be involved in building a railroad and a few thousand in ensuring security of objects[3].

Iron deposits represent investment attractiveness too. Thus, the reserves of the “Hajigak” deposit in Bamyan province are estimated at 2 billion tons. For the time being, the government is preparing to conduct a tender on developing this deposit, which has already attracted interests of some major companies from India, Iran, UK, USA and Canada[4].

Meanwhile, a number of promising gold deposits are being developed in the country. According to official sources, three gold deposits are already explored – mines in the provinces of Takhar, Ghazni and Badakhshan. According to the results of a tender carried out in November 2010, international company West Land General Trading will work on a field in the Takhar province[5]. In addition, at the end of September of the last year, the U.S. gold producer Newmont Mining, the world’s largest company in this sphere, announced about its intention to participate in the development of gold deposits in Afghanistan[6].

A particular interest of foreign investors is attracted by oil and gas resources of Afghanistan. A few medium-sized reserves of gas and gas condensate fields are opened in the country. According to the estimates of American experts, total gas reserves of Afghanistan amounted at least 137 billion cu m[7]. The largest deposits are “Hodge-Gugerdag” (67 billion cu m) and “Dzharkuduk” (32 billion cu m.) in the north of the country[8].

Along with this, in August, 2010, Afghanistan for the first time began to extract oil at 800 barrels per day. The government plans to open a tender to develop a field in the province of Sari Pul in the north with estimated reserves of 1.8 billion barrels of oil[9].

In general, the Ministry of Mining of Afghanistan expects that in the next 5-7 years the country’s annual income from production of steel, copper, gold, oil and gas will be newscat="analytics_and_publications" newspage="/analytics_and_publications/analytics/" number="5" showpages="true".2 billion and in 10-15 years – from to .5 billion[10].

The development of the mining industry in Afghanistan is inseparably linked with the creation of appropriate transport infrastructure, including road, rail and other communications networks capable of providing the movement of products both domestically and abroad. Afghanistan’s geographical location allows exporting goods in all directions, including to such potential markets as Iran, China and India. The same “Aynak” includes the construction of a railway “Aynak-Xinjiang” to export the copper to China.

The implementation of large-scale transportation and infrastructure projects in Afghanistan is carried out under the economic assistance of world community. Among the largest donors of Afghanistan are USA, Japan, EU, Saudi Arabia, Iran, India, South Korea, as well as the World Bank and Asian Development Bank. Practical assistance, in particular, is provided by Uzbekistan. In recent years Uzbekistan has constructed 10 bridges on the section of the road Mazar-e-Sharif-Kabul. From October 2003 to June 2009, the volume of shipments of humanitarian and other goods through the territory of Uzbekistan has made more than 6 million tons[11]. Besides, in the end of 2010 a new railway Hairatan-Mazar-e-Sharif was put into operation, which was built by “Uzbekistan Railways” with a financial support from ADB. A 75-km branch connected the border station Hairaton with Mazar-e-Sharif – the largest industrial center of the country. Another active participant in the railway projects in Afghanistan is Iran, which constructed the Mashhad-Herat branch. In the future it is expected to connect this branch with Mazar-e-Sharif. Herat-Islamkala and Herat-Meimena roads were also built with the assistance of Iran. In 2005, the Dogarun-Herat highway, which connected the Iranian province of Khorasan with Herat[12]was opened.

Creation of an extensive transport network will enable Afghanistan to participate as an effective transit zone at the crossroads of trade routes North-South and East-West.

In particular, in the near future it is expected to sign a tripartite agreement between Afghanistan, Pakistan and Uzbekistan on transit trade and transportation in order to promote trade between countries. The agreement is aimed at promoting trade between the parties by facilitating the transit of goods at borders and through Afghanistan. A similar agreement between Afghanistan and Pakistan was signed in July 2010, which along with the development of bilateral trade relations provides support for Afghan goods in accessing markets, bordering with Pakistan[13].

Thus, the implementing efforts to create the necessary industrial base and transportation network are able to put Afghanistan on the path of healthy and peaceful economic development. Such measures lead to a significant reduction of unemployment in the country and at the same time to elimination of motives for the further poppy cultivation as the only means of survival. Economic revival of Afghanistan will enable to successfully integrate into trade and economic network in the region and will make a significant contribution to strengthening regional stability and security.