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susan sachs

Globe and Mail correspondent Susan Sachs reports from Afghanistan on a sprawling housing development on the outskirts of Kandahar.Fred Lum/The Globe and Mail/The Globe and Mail

The broad streets are paved. Tidy two-storey houses are tucked behind pastel walls and flower beds. Families picnic in the park and the strip mall boasts a pizza place, an Internet café and a bank.

If not for the 11 interior police checkpoints, the 180 armed guards and the passing military vehicles bristling with weapons, the sprawling housing development of Aino Mina on the outskirts of Kandahar would not look out of place in any Canadian suburb.

"This," said Tooryalai Wesa, the provincial governor, "is what the future looks like."

Utopian visions do not survive long in Afghanistan, particularly in the ramshackle and dangerous city of Kandahar where Taliban hit squads are assassinating local officials, most recently the provincial police chief. Security is precarious. Investment is scarce. Infrastructure, where it exists, is decaying.

But for the first time in years, a few sparks of hope for economic development are visible.

After dithering and debate among foreign donors, the American military stepped late last year to provide two powerful new generators for Kandahar. The second unit was installed just this month. Now the boost in the electricity output is helping fuel an improbable housing bubble and boom in property speculation.

Aino Mina is a prime example of the pent-up potential for economic growth, according to its developers and bullish Kandahar officials.

Sales of plots, going for $22 a square metre, have soared in the past two years and spawned a lively real-estate futures market, said Mohammed Gul Basha, the project's sales manager.

About 2,500 people have built homes and another 1,000 people have purchased contracts to build, putting down about 50 per cent of the sale price of the land. Many are now selling their contracts for major profits, he said.

The development, built on 9,000 hectares of land that once belonged to the Afghan Ministry of Defence, is owned by a company that includes two of President Hamid Karzai's brothers. The deal was controversial and called an illegal land grab by critics. But Kandahar's mayor, like the provincial governor, now raves about its economic benefits.

"There are hundreds of people working there building houses, roads, markets, everything," said Mayor Ghulam Haider Hamidi. Property taxes from Aino Mina homeowners, he added, essentially bankroll city services, providing $6-million of the city's $16-million budget.

The people who bought land in the first years of the five-year-old project were Afghans living abroad who wanted to help their Kandahar relatives. More recently, Mr. Bacha said, they are the local middle class.

They made money in the past few years selling equipment and services to the NATO air base. But they had no place to invest, since the lack of reliable electricity in the city has choked off any new business investment.

The American military, already the biggest generator of jobs and revenue in the province, is also largely responsible for the nascent housing bubble. In late December, the U.S. Army Corps of Engineers flew in a new diesel generator and installed it on the east side of the city at the site of a lifeless industrial park filled with shuttered factories. Last week, the military delivered a second one for the city's western end.

The generators' combined output of 20 megawatts of power effectively increases the city's electrical capacity by 42 per cent.

Promises and plans for bringing power to southern Afghanistan, the Taliban heartland and the scene of the big NATO military surge of the last year, have been discussed by various donor countries for nearly nine years.

Development agencies argued against spending money on quick fixes like generators. Instead, they pushed for big-ticket projects like hydroelectric dams, new transmission lines and power substations to build a modern electricity grid.

But the centrepiece of those plans, the rehabilitation of the 1950s-era Kajaki dam in Helmand province, has been stalled by fierce fighting. A new effort, funded by the U.S. Agency for International Development, is now under way to refurbish Kajaki and its frayed transmission lines to Kandahar. But the area remains a hotbed of Taliban activity, and security problems could still push back the project's three-year timeline.

The new generators for Kandahar are seen as a quick but necessary fix to the city's chronic energy shortage. They were bought with money from the Commanders Emergency Response Program, the discretionary funds that American officers in the field can use for small "hearts and minds" projects to win over Afghans. CERP funds were also promised to cover the cost of fuel for the generators for the next three years.

The new generators will not solve the city's chronic power deficit. But their arrival, representing a $300-million investment in kick-starting Kandahar's moribund economy, has already encouraged some factory owners to reopen.

The lack of reliable electricity has been driving investment out of Kandahar.

Al-Haj Raheemdin, deputy director of the local Chamber of Commerce, said he invested $40,000 in equipment in hopes of starting a small factory a few years ago to produce cosmetics and pharmaceutical products. But the city's erratic electricity changed his mind. He ended up establishing the company in Kabul where the power supply is more reliable.

"We have about 130 factories in Kandahar and very few were working because of the electricity problems," Mr. Raheemdin said. "Now they might start again. And if each one has 20 or 30 people working, they would be all day working and at night sleeping. No fighting. No stealing. No robbing."

Aino Mina is hooked into the city's power grid, but most homeowners who live there have installed their own generators, Mr. Basha said. As the development grows, though, so does his vision of a purring self-sufficient suburban lifestyle for down-at-the-heels Kandahar.

"We're going to build generators," he said, as he drove around Aino Mina in his white Lexus, pointing out armies of labourers already laying the foundations for a multi-storey shopping centre and a sports complex. "And we have plans to build our own hydroelectric dams in the future."

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