Afghanistan’s Economy Blooms

Afghanistan’s Economy Blooms


Except for the clothes, Amiri Park could be any park in the United States: kids jostling for positions on swings and seesaws or chasing each other over the grass and gravel paths. One boy makes long arcs with his inline skates; teenage girls parade new clothes. Families picnic on the grass, and others dine al fresco at a Turkish restaurant. The air is fresh and cool, while in the city, it’s dusty and hot.

This is Mazar-i-Sharif, the capital of Balkh Province in northern Afghanistan. Mazar is an eight-hour drive from Kabul and a different cultural region, dominated by Tajiks, Uzbeks, Turkmen and Hazaras. Amiri Park occupies one-sixth of a “new town” of 648 acres planned to accommodate 30,000 people. It’s an Afghan version of a gated community, though anyone well off enough to own a car or hire a taxi to get here can use the park without charge.

Its creator, Khaled Amiri, an unassuming man of 49, has never lived outside Afghanistan and speaks no foreign languages. But through private enterprise, he is showing Afghans a new way to live, which represents just about everything the U.S. would like to see in Afghanistan.

Mr. Amiri was enrolled in the economics faculty of Kabul University when the Soviets invaded in 1979. Eventually he became the logistics chief for Northern Alliance leader Ahmad Shah Massoud. “We learned from Massoud, if you have a vision, make it big, but start small,” he says.

Now he is building upscale housing in Mazar. The park and amenities are designed to persuade well-heeled Mazaris to fork out $20,000 or more for housing sites. So far 60 large houses have been built; they are privately financed but must conform to plans provided by the developers. Eventually, each of the six sections will have its own schools, clinic, park, market and mosque. House sites come with water and electricity (an on-again, off-again affair in Mazar), as well as an unheard-of amenity here, trash collection.

Mr. Amiri says about his town planning, “I am thinking all the time, how can I create a place where from infancy to old age a person can be busy?” In a country where sitting in a stifling room drinking tea with the same people you saw the last 100 days is the national pastime, his thinking is revolutionary. Mr. Amiri is also starting a commercial dairy, beginning by selecting the best cows to breed for his herd.

Like much of the business growth here, Amiri Park is linked with Balkh’s governor, Mohammed Atta, who was also an associate of Mr. Massoud. After helping the U.S. defeat the Taliban here in the fall of 2001, Mr. Atta nudged out his longtime rival, Abdulrashid Dostum, for local prominence. A veteran of years of fighting, Mr. Atta didn’t seem a likely choice to lead Mazar into the modern era. But today he is admired for his energetic pro-business attitude and efficiency. On the downside, questions are raised about the separation of his own businesses from government, and he favors his own Tajik ethnic group.

Call it robber-baron capitalism or Russian-style oligopoly, but it’s making Mazar probably the richest city in Afghanistan. In the spring of 2002, Mazar had a population of perhaps 500,000. (There has been no census in Afghanistan in decades.) No building was taller than the medieval tiled shrine at the center of town that gave the town its name, “the honored shrine.” Private cars were few. Fearful women in chadori, the local word for burqas, piled six and eight into decrepit taxis to visit the bazaar, where only the shops ringing the shrine had glass windows.

Now Mazar may hold as many as 1.2 million people, six-story buildings are common, and the town has filled in much of the nine-kilometer length depicted in its master plan. Private automobiles are common, as are traffic jams and multistoried bazaars. Women increasingly wear only the headscarf, second only to the women of Kabul in their freedom.

Mobile phones and banking are two of the main forces bringing Mazar and the rest of Afghanistan into the modern world. Roshan, the country’s largest mobile phone service by market share, adds 250,000 customers monthly. It now has 3.4 million subscribers and expects to reach five million by the end of 2010 before growth levels off. The nation’s third largest bank, Azizi Bank, opened its first Mazar branch in July 2006. A year later, the branch had 13,400 kismet, or chance accounts, and 522 interest-bearing accounts, served by eight employees.

Kismet accounts are intended as Shariah-compliant products that reward customers with gifts from quarterly lottery drawings. The customer gets one ticket for every $100 on deposit. Azizi’s Mazar manager, Abdullah Shafaq, says, “We pay interest two ways, one with gifts and one with money,” but kismet accounts ignore the time value of money. At the 7% that Azizi pays on afghani-denominated accounts, money should double in a little less than 10 years. But Afghans are gradually realizing that interest is better than chance. Between January and August this year, the Mazar branch added 2,500 new kismet accounts and 1,300 new interest-bearing accounts.

Most of the growth here is a purely Afghan development. Mazar has received almost no infrastructure help from the U.S. Army, which has jumpstarted the eastern border provinces by building asphalt roads and installing solar-powered street lights in the bazaars. Mazar has received some international aid. Japan built attractive schools, though population growth and an influx of people from drought-stricken villages fills them to capacity as soon as they are finished. Various donors, including the U.S. Agency for International Development, have paved Balkh’s main roads.

Still, a feeling that Balkh is a neglected stepchild persists locally. “We are victims of our success,” Farhad Azimi, the articulate young chairman of the Balkh Provincial Council, an elected advisory body, complained to me last November. He meant that Americans reward the Pashtun belt in the south for bad behavior while ignoring the more peaceful and prosperous northern region.

Governor Atta notes that the massive customs duties collected in Balkh Province from its border crossings were sent to the central government in Kabul. In the year ended March 2007, this revenue amounted to $100 million; the finance ministry declines to provide an updated figure. The money sent back from the central government is only for the provincial operating budget, not development. In theory, provinces with lucrative customs posts like Balkh subsidize the dirt-poor central provinces much as New York subsidizes Arkansas. But in President Hamid Karzai’s Afghanistan, much of the tax money is stolen in Kabul, and the central provinces still have scarcely any paved roads.

Electricity is the biggest drag on further growth here. Mazar has an unfortunate climate with cold, short winters and long, scorching summers. At peak times ,residential areas are without electricity as often as every other day. USAID funded an industrial park, but it is unusable due to lack of power.

Bribery, or rishwat, is the second-biggest problem. Azizi’s Mazar manager, Mr. Shafaq, gives the example of an advertising billboard, for which the advertiser pays a government tax of 3,000 afghanis ($60) per month. The bribe on top of this is another 50%. An energetic local building contractor complains that 10 or 15 people, mainly former commanders during the civil war years, control most of the business of Mazar. “They are not working, they are not businessing, why they have money?” he says, declining to be named.

A few kilometers from Amiri Park are two other novelties. The first is the “For You” supermarket, just 20 days old. It is enormous by Afghan standards, the size of a small-town supermarket in the U.S. And it has an entire lane of haircare products alone. The supermarket employs 12 Afghan women, a rarity in the bazaar areas here.

The supermarket belongs to Dr. Mohammed Naseem Kazimi, originally of nearby Andkoie, who also owns the factory that produces the toilet tissue, paper towels and some of the bottled water “For You” sells. The factory is one of only two in Afghanistan producing toilet paper, and it only makes 1,000 boxes of 30 rolls daily.

Here the 42-person workforce also includes women. They theoretically work separate eight-hour shifts, but men file in and out of the factory floor while women stuff tissues in boxes. It’s cleaner and more comfortable than most Afghan homes. Workers are paid 5,000 afghanis or $100 monthly, double a teacher’s salary and the same as a basic policeman’s.

Afghanistan will always be an agricultural country, but these businesses, like Amiri Park, are more important than their economic value suggests. They signal the beginnings of a consumer society, based on material desires rather than tradition. And they are slowly building the civil society that will allow Afghans to govern and protect themselves.

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