The day Taliban soldiers fled this capital, Sabir Latifa had $9,000 in savings from his dried fruit exports and a head filled with ideas about how to do business in a changed Afghanistan.
He started small by fixing up some guesthouses for the journalists and aid workers who flocked to Kabul when the Taliban left in November 2001. Then he branched into cars and a hotel and the capital's first private Internet cafe. Fifteen months later, Latifa has a business empire he says is worth $500,000, and he hopes to build a water bottling plant, more hotels outside Kabul, a computer store and even a chain of Internet cafes around the country.
He did it all in the midst of political chaos, with frequent security concerns, without the help of a bank to lend him money, and in an investment climate that can only be described as extremely challenging.
But Latifa, a longtime Kabul resident, says that where others saw unacceptable risks, he saw the opportunity of a lifetime.
"There is so much money to be made in Afghanistan now," he said in English learned in a Pakistani refugee camp. "The country has been held back for 25 years, and now is the time to invest and do business. Afghans are very good at this -- we've been doing it since the time of the Silk Road."
Although countries around the world have promised more than $4 billion in aid to rebuild Afghanistan, there are today very few visible signs of the planned roads and schools and infrastructure projects. There are, however, signs throughout the capital, and in many provinces, of fast and dramatic change as Afghans and some intrepid foreigners open shops, businesses and even factories, quickly put up buildings to house them, and buy enough cars to create daily traffic jams.
In a city that had a handful of shopworn eating places two years ago, a new Chinese or Italian or American hamburger restaurant opens almost weekly, as well as kebab shops by the score. Small hotels have sprung up, and a $40 million Hyatt is on the way. The food bazaars are bustling and there are downtown blocks filled almost entirely with bridal shops. Rebuilt homes are rising from the ruins, and every little storefront seems to be stuffed with bathtubs or fans or with men building and carving things to be sold.
President Hamid Karzai, who will meet President Bush in Washington on Thursday, points to this mini-boom as one of the most important accomplishments of his fledgling administration, a sign that people are voting with their money. "People wouldn't start businesses and rebuild their homes here unless they believed that peace and security were coming to Afghanistan," he said in a recent interview. "This is the most positive sign of all."
Shair Bar Hakemy, the business adviser to Karzai and himself a refugee turned entrepreneur who made a fortune in Texas commercial real estate and hotels, said that the price of real estate in some parts of Kabul is now higher per square foot than in downtown Dallas. "My family and friends back in America have difficulty seeing past all the headlines about troubles here," he said. "But the truth is that Kabul and other parts of Afghanistan are changing quickly for the better."
Many of those perceived troubles are real and worrisome, and nobody would mistake Kabul for a prosperous and peaceful city. Sections are still in ruins, and many of the 600,000 returning refugees who have flooded the city live precariously on the margins. Islamic militants remain determined to destabilize and oust the Karzai government through violence, and periodic attacks continue. There is also concern that the flashier developments could offend conservative Afghan attitudes and create a dangerously wide divide between the relatively rich and the very poor.
But whatever the risks, the Kabul of today is almost unrecognizable as the austere city ruled not long ago by the Taliban -- or as the place where warring Islamic militias demolished neighborhood after neighborhood, or where Soviets presided over a rebellious socialist state.
While the current business mini-boom involves mostly small-scale projects, some see it as a harbinger of bigger investments from abroad.
"Large foreign investors look to local entrepreneurs -- the people on the ground -- for signals on the business environment in a place like this," said William B. Taylor Jr., the special representative for donor assistance at the U.S. Embassy. "And the signal now is pretty positive."
Since last summer, the embassy has held monthly round tables to bring together local and international businessmen and Afghan government leaders to discuss opportunities and problems. American diplomats say the meetings started with five firms, and now could easily draw 100 -- if there were a room large enough to hold them all. Topics include such basics as the absence of banks, the fact that property ownership is often unclear, and a bureaucracy that can be infuriating and corrupt.
"The goal is to show businessmen that while there are obvious challenges here, there is also a government committed to building a private sector," a U.S. diplomat said. As part of the outreach effort, the Afghan government will sponsor, with American assistance, a trade and investment show in Chicago this summer. The United States is also helping with some financing of projects. Before Hyatt agreed to manage a Kabul hotel, for instance, it needed assistance from the Overseas Private Investment Corp., a federal agency that specializes in making loans where other banks won't.
While much of the money being invested today is coming from Afghans here and abroad, U.S. and international military and aid programs are surely making the expansion possible. More than 4,000 foreign troops are now in Kabul and another 9,000 U.S. and allied troops are stationed in Afghanistan, many at the Bagram air base 35 miles north of the capital. Without them, the relative peace in Kabul would not likely last long.
Several thousand diplomats, aid workers and other foreigners also live in Kabul, and the most visible part of the new business caters to their needs. It remains an open question whether the new Kabul can sustain itself when some of those relief workers go home.
But the Afghan government, along with some embassies, is working to keep and expand the international presence. The first big wave of foreigners to arrive after the Taliban fled were journalists, who often paid top dollar for homes and services. Most are now gone, but more permanent businessmen are taking up the slack. According to Commerce Minister Seyyed Mustafa Kazemi, the number of foreign firms setting up shop in Afghanistan is growing fast.
He said that in the past six months, his ministry has approved 2,600 business licenses, compared with 2,045 in the 45 years before. Many were given to foreign firms, he said, or those headed by Afghans living abroad who want to return to their homeland. These licensed businesses are the large ones that will pay all taxes and other government fees; most Afghan businesses still open without registration and beyond the reach of central government tax collectors.
"The markets of the world are saturated now, but Afghanistan is a virgin market," Kazemi said. "Our resources have not been developed, our people are have been forced to buy substandard products, and there are opportunities everywhere. . . . This ministry wants to be a friend to the business community, and that has never really happened before."
Latifa, the hotel and computer pioneer, said he didn't get much help from his government, but neither did it stand in his way. And while he is eager to form joint ventures with foreign investors, the financing he has gotten so far has come the old-fashioned way, from his savings and loans from friends, family and those who worked on his projects.
"When I opened the Internet cafe, my friends thought I was crazy," said Latifa, 33. "But it's been in business about two months now, and it has already paid for itself."
"The government and [international aid organizations] won't make Afghans stand on their own feet," he said. "Businessmen will do it."