Countries of the World/COUNTRYS.BIN/dp/0001/00017.txt

Text File | 1991-06-24 | 20KB | 307 lines

$Unique_ID{COW00017}
$Pretitle{265}
$Title{Afghanistan
Chapter 3E.   Industry}
$Subtitle{}
$Author{Robert S. Ford}
$Affiliation{HQ, Department of the Army}
$Subject{soviet
production
gas
industrial
afghan
percent
afghanistan
output
government
reserves}
$Date{1986}
$Log{}
Country:     Afghanistan
Book:        Afghanistan, A Country Study
Author:      Robert S. Ford
Affiliation: HQ, Department of the Army
Date:        1986

Chapter 3E.   Industry

     Afghanistan's industrial sector was still at an infant stage at the time
of the Soviet invasion. The bitter fighting that ensued disrupted the emerging
industrial structure and hurt many industries. In comparison with agriculture,
industry made relatively small contributions to GDP and employment-about 21
and 10 percent, respectively, in 1982. These figures were up slightly from the
1966 levels of 20 percent and 6 percent. The public sector dominated the
industrial scene, but private enterprise still flourished in handicrafts and
small-scale concerns. Afghan industry was primarily concerned with processing
local agricultural raw  materials and mining local mineral resources. Unlike
many other less developed countries, there were few import-substitution
industries, and before 1978 there was considerable freedom to import
industrial goods, especially consumer goods. Aside from the difficult security
situation, the economy confronted substantial constraints impeding rapid
industrial growth. These related to the country's very good income level, poor
investment infrastructure, and geography. Transport remained costly and slow,
and the domestic market was still fractionated and traditional. There was
little experience in management and a serious shortage of technical skills.
Outside observers, however, felt that Afghanistan still had some comparative
industrial advantages because of its low labor costs and the potentially large
supplies of agricultural raw materials as well as mineral resources. The
Afghan government placed a very high priority on industry. Industrialization
was perceived as a means of improving the physical quality of life and also
transforming the social relationships of the country.

Mining

     In 1985 Afghanistan produced large amounts of natural gas and was
preparing to exploit further other natural resource deposits. Natural gas was
the most important mineral resource and industrial product. The country was
thought to possess 110 to 150 billion cubic meters of total reserves. With
Soviet assistance, production began in 1967 at the Kwoja Gugerdak field, 15
kilometers east of Sheberghan in Jowzjan Province. The field's reserves were
thought to be 67 billion cubic meters. The Soviets also completed in 1967 a
100-kilometer gas pipeline, 820 millimeters in diameter, linking Keleft in the
Soviet Union with Sheberghan. Other fields were discovered at Kwaja Bolan,
Yatim Taq, and Jousik, with reserves of about 2.5 billion cubic meters. Gas
production rose from 1.68 billion cubic meters in 1968 to 2.8 billion in 1980.
In 1982 a new field at Jarquduk, also in Jowzjan, started production, again
with Soviet aid. In spite of the new field, gas production slumped somewhat
after the record year in 1980. In the mid-1980s the country was producing
about 2.5 to 2.6 billion cubic meters annually. The government attributed this
decrease to reduced pressure in the gas fields (see table 8, Appendix).

     The government placed a high priority on expanding the country's natural
gas industry. In 1985 the Afghans, with Soviet assistance were trying to
restore pressure in the existing fields. In 1978 a gas desulfurization plant
was completed by the Soviets at Jarquduk with a capacity of 2 billion cubic
meters annually. The plant could also produce 15,000 tons of condensate
annually. Geologic exploration intensified in the early 1980s with the key
assistance of Soviet experts, despite hazards to their physical safety.
Satellite photos were also used. In 1984 two new gas fields were found at
Bashikor and Jangal in Jowzjan. Work on a second gas pipeline to the Soviet
Union was also under way in the mid-1980s.

     The Soviet had long exhibited interest in the natural gas deposits
across the Amu Darya in Afghanistan. They began geologic exploration in
earnest in 1957 with the conclusion of a technical assistance agreement. From
the beginning, Soviet aid was designed to promote large exports of natural
gas to the Soviet Union. Although production started in 1967, there was no
Afghan gas consumption until 1975, when about 2 percent of the output was
diverted to a thermal power plant at Mazar-e Sharif. The value of these gas
reserves jumped with the advent of the Iranian Revolution. In late 1979 a
dispute over prices caused Tehran to halt gas exports to the Soviet Union. It
was, as a result, a cold winter for many citizens of the Soviet Central Asian
republics. After their intervention in Afghanistan, the Soviets secured
control of the Afghan gas facilities, whose production aided the development
of the Turkmen, Uzbek, and Tadzhik republics. By the mid-1980s gas exports to
the Soviet Union represented 90 percent of total production and constituted a
vital element in the Afghan budgetary and trade picture. The Soviets,
however, paid Afghanistan a very low price for gas; in 1981 it was only half
the price of Soviet gas piped to Western Europe. These relatively low prices
dated back to the initial Afghan gas exports. Whereas world gas prices varied
according to calorific value, Afghanistan received prices far below those of
any major world exporter. In addition, Afghan officials were unable to verify
the actual amount of gas pumped to the Soviet Union because the meters were
on the Soviet side of the  border, and Afghan officials had no access to them.

     Afghan gas consumption was concentrated in the city of Sheberghan, where
in 1982 a local distribution network was finished. About 3,000 homes had
access to the network. In 1980 the thermal electricity plant at Mazar-e Sharif
was converted to operate on coal rather than gas. Gas still powered the
thermal plants providing electricity for Balkh and Mazar-e Sharif, and the
fertilizer plant at Mazar-e Sharif used gas as a production input.

     Petroleum exploration in Afghanistan  began before World War II when an
American firm, American Inland Oil Company, undertook field surveys. In the
late 1930s the Americans withdrew  because of the unsettled international
situation and the declining world  oil market. After World War II the Afghans
invited the French to develop potential petroleum resources in the north. The
Soviets protested operations of a North Atlantic Treaty Organization country
beside their border, and Afghanistan therefore replaced the French with a
Swedish team in 1954. In 1956 the Afghans had their first oil find, and,
with further Soviet help, the oil reserves were evaluated. The country was
estimated in 1978 to have petroleum reserves totaling some 70 to 100 million
barrels located in Faryab and Jowzjan provinces. In late 1984 there were
reports of seven new oil fields discovered with Soviet aid. By 1984, however,
Afghanistan was not producing oil, but fields in the Saripul region of
Jowzjan were being prepared. Another indication of significant petroleum
discoveries was the government's plan to build a petroleum refinery in
Jowzjan with an annual capacity of 500,000 tons after crude oil production
commenced. Until Afghanistan starts its own petroleum production, it will
remain dependent on Soviet refined  products to meet its national needs.

     In 1985 coal was Afghanistan's second major hydrocarbon resource. It was
the oldest fuel industry, dating back to shortly after World War I. All
Afghan coal production was consumed domestically, and official statistics
did not show any imports of coal. The main user of the coal was the
electric-power industry in thermal plants in the Mazar-e Sharif region. The
emphasis on natural gas exports to the Soviet Union made coal the primary fuel
for domestic industry.