When UMD alumnus Jacob “Jack” Hautaluoma (’55) was approached to help conduct a feasibility study late last year on extracting metals, minerals, and oil from Afghanistan, he first wanted to know that the goal of the project was to improve the lives of the Afghan people and not to make a handful of foreign investors wealthy. “It had to be, not for our good, but for theirs – to do good for the Afghan people,” he said. His experiences from working on Minnesota’s Iron Range, his educational background, and his work with the Peace Corp made him a valuable team member.
The study was for a Center of Excellence for the Afghanistan Extractive Industries which hoped that the industries of mining, quarrying and oil drilling could become the basis of a sound economy for the country. He was pleased when he learned that each of his team members felt as passionately as he did about their work benefiting the people of Afghanistan. “Each member of our team had unique assets for the project, and we worked well together. We were strongly driven to propose a Center that would benefit all of the Afghan people.” The Center would be similar to an extension service and provide information, technical support, business and political facilitation, training, and expert advice from a central office in Kabul to outlying spokes where mining and other industry activities take place. A concept connected to higher education, where extension services are connected to each Land Grant University, like the University of Minnesota.
Hautaluoma was the organizational design specialist on the project. He had experience working in a steel plant. After graduating from UMD with a degree in Psychology, he was an industrial engineer at the steel plant in Morgan Park for five years. After that, he went to graduate school at the University of Colorado, Boulder, before becoming a professor at Colorado State University (CSU) in Fort Collins, Colorado.
He also brought over 40 years of experience working on many international development projects in 20 countries. He did these projects while he was a professor specializing in organizational psychology at CSU.
In addition, Hautaluoma has personal ties to Afghanistan. When he was a young professor, he worked as a trainer for the Peace Corps. For a couple of years, Afghanistan “was like a second home,” he said. His family had an Afghan student who lived with them for a year. These experiences were useful in connecting with Afghans on the recent project.
He describes Afghanistan as “a treasure trove of minerals” containing, among other things major deposits of copper, iron, gold and numerous other minerals including lithium and rare earths. In fact, Afghanistan may contain the world’s largest reserve of iron ore. “China has a major option on a copper deposit, and India recently won one for iron ore,” but he added, “so far most of these resources have not been developed.”
A concern shared by the team and their sponsors was the history of “the resource curse” in which underdeveloped countries that have raw commodities to sell did not benefit from them, and in many cases were harmed. “The commodities were sold, the land and environment were damaged, some wealthy people got richer, but not much good happened for most of the people of the country,” Hautaluoma said. It became “one of our guiding principles, that that not happen in Afghanistan,” he stated. Solutions to the curse are “to use good standards of extraction, transporting, and doing business, and building a lasting and useful infrastructure. Equally important is to have the commodities processed within the country before they are sold,” he said. This has the country’s workers doing value-adding work before the commodity is sold. Examples in Afghanistan would be to have smelters, steel mills, marble finishing plants, and gem stone cutting operations set up in the country. The team looked for ways Afghans could improve skills for mining, geology, business development, and other related areas needed by the country to develop Afghanistan’s human capital in emerging industries.
Hautaluoma found Afghanistan to be very different from when he was first there over 40 years ago. “Then it reminded me of Bible scenes, and there was no war. It was poor, but I traveled freely over the country to wherever the Peace Corps volunteers or trainees were stationed. I used public transportation and ate and stayed in local establishments. I walked around and shopped from Afghan merchants. Now Kabul is so much larger and shows the scars of many years of turmoil,” he said. On this trip, he could not go anywhere without armed guards and there were some incidents of violence close by. “I felt safe though and the Afghans I worked with were great, but,” he added, “it is sad to see the troubles that have lasted so long.”
After finishing the project in December 2011, the proposal was accepted. The Center has not yet been started, although it was scheduled to start up in January 2012. “I imagine that some of the recent sad events have deterred its initiation,” Hautaluoma said.
He believes the project is a good idea that ties into a longer term strategic plan for Afghanistan’s economic development. This includes building a railroad and other facilities. The plan would involve the Chinese, Indians, and others Afghan business partners. The country faces many constraints, including serious security issues, lack of physical infrastructure, and its landlocked physical location.
“There is a weak history of business development, and the political system is not stable. Corruption is a problem as is crime, mainly involving the drug trade. The skill level of the work force must be upgraded.” However, Hautaluoma remains optimistic. “The Afghans want peace and a good economy, just like anyone else. Developing the extractive industries could be part of the solution they need.”
Pictured: Jack Hautaluoma at the ancient Citadel in Herat, Afghanistan.