WASHINGTON: In northern Afghanistan, a potentially rich, US-backed oil and gas tender is under way this week. Central to hopes for a face-saving force withdrawal in two years, the competition is part of a U.S. strategy of initiating a vibrant, self-sustaining industrial base in Afghanistan that can bring jobs and stability over the long term. What the tender’s Pentagon advisers hope will not happen: another Chinese triumph in Afghanistan’s nascent oil and mining sector. Why? As a Pentagon official told me, the United States fears that China will end up “dominating Afghanistan”.
From two decades of watching and covering the country, I feel confident saying that China will not end up “dominating Afghanistan”, because the Afghans are too astute to let that happen. They do not require foreigners to inform them of the downside risks of falling under the sway of an outside power. Yet how astute are we?
By appearances, not very. We seem to have determined that because China is a great rival in many sectors, it is by definition a danger everywhere. But the logic does not hold in Central and South Asia, where a robust Chinese economic role may be what stands between the success and failure of primary U.S. and Western strategic objectives. “Without China’s assistance, almost nothing of sustainable consequence will happen in South or Central Asia — in Pakistan, in Afghanistan, or elsewhere,” Larry Wilkerson, former chief of staff to Gen Colin Powell, told me.
For two decades, the United States has sought to fashion Central Asia — and, since 9/11, Afghanistan — into a bastion of free-market democracy that respects human and civil rights. In the 1990s, the policy centred on reducing Russian influence in Central Asia through the construction of independent oil and gas pipelines. After 9/11, the policy shifted to creating a support base for the war in Afghanistan, eventually becoming what is known as the “northern distribution network”.
Now, Nato troops have plans to withdraw in 2014, and the United States is attempting to erect the foundation of a sustainable economic base on its way out. But the hour is late, and the plan runs the risk of Potemkinism — a nice try aesthetically, but lacking substance. The Chinese themselves are highly unlikely to explicitly come to America’s aid. But the United States could achieve some of its aims — a more stable Afghanistan, and a more economically independent Central Asia — with China’s implicit help by embracing some of its objectives.
The Afghan tender is for six exploratory blocks of land ranging in size from 1,200 to 2,200 square miles in and around the north-central Afghan city of Mazar-i-Sharif. According to a report last year by the U.S. Geological Service, the blocks contain an estimated one billion barrels of oil. If the estimate proves out, it is sufficient to attract attention from relatively large multinational oil companies. We won’t know who the bidders are until next week, when they must file an “expression of interest” with Afghanistan’s ministry of mines. (Complete offers are due in October, and the winner is to be announced by the end of the year.)
But a Chinese company, such as the China National Petroleum Corporation (CNPC), is expected to bid. If that Chinese company goes on to win, it will be the country’s second big hydrocarbon triumph in Afghanistan in as many years. It will also escalate an already loud fracas in the West.
In a series of policy journal articles, most recently in the current issue of Foreign Affairs, former US Ambassador Zalmay Khalilzad and his son, Alexander Benard, have protested last year’s first-round oil tender victory by CNPC. Khalilzad, who served as ambassador to Afghanistan and Iraq during the George Bush presidency, now runs Gryphon Partners along with his son. The firm helps companies seeking business in the two nations and elsewhere by, among other things, introducing them to senior officials there.
In Afghanistan, Gryphon has represented Britain-based Tethys Petroleum, which CNPC beat out in the first oil tender. The father-and-son pair has targeted the tender’s Pentagon advisers for criticism, arguing that CNPC’s triumph was a mockery of fair competition, and that the Pentagon should have carried out a policy of favouring US companies.
The argument becomes a bit overheated — Benard’s Foreign Affairs essay suggests that the good old days were when US Marines were dispatched to straighten out countries that flouted the entreaties of American businessmen. But we do come to understand that the father and son unhappily believe that they and other American businessmen need better advantages abroad to win. But that’s not how business actually gets done in this era of globalisation. In Russia, for example, President Vladimir Putin has recently let three contracts for the prized Arctic go to ExxonMobil, Italy’s ENI, and Norway’s Statoil. In Africa, the hottest new play is the eastern coastline states of Kenya, Mozambique, and Tanzania, but the boom is led by American, British, and Italian companies.
In other words, you do not have to be Chinese to win big. And there do not have to be gunboats.
In the case of Afghanistan, the Chinese are highly unlikely to win the latest tender, primarily because the Afghans will want to mix things up. But if they do win, it will not be a disaster. On the contrary, “the more economically invested China is, the more it’s a status quo actor and willing to support the future stability of the country”, Andrew Small, a scholar at the German Marshall Fund, told me. We are not talking about a Chinese security role. In terms of foreign adventurism, Beijing has no record of exercising its military might abroad. Perhaps its territorial notions will expand over time, but I found no one who suggested that China wishes to play a security role in Afghanistan or Central Asia.