Sectarian bias is a blight on a rare Afghan good news story

In Asia's poorest capital city, which has no sewage system, no piped water, only a handful of hospitals, and a population of 60,000 street children, it might seem frivolous to spend more than a million pounds on creating a garden. Do a series of terraces and several rows of trees fulfil an urgent need? Isn't this another example of foreign aid being wasted? Not a bit of it, insists Jolyon Leslie, a Dari-speaking architect who has dedicated two decades of his life to this hauntingly magnetic country, first with the UN and now with the Aga Khan Development Network, which is funding the garden's restoration and playing host to my visit to the Afghan capital. "On a Friday we get up to 2,000 people in here, picnicking on the lawns, or enjoying the shade," he says.

A Wimbledon-style downpour was turning the garden's central watercourse into a raging torrent the afternoon I visited. The lawns were sodden and empty. But as we sheltered under the arches of the almost completed visitors' centre and bookshop, and hurried up the terraces during a break in the rain, I saw no reason to doubt him.

A quarter of a century ago, when I first saw this ancient sloping garden, it was in a miserable state. The main attractions were an open-air swimming pool at the top and a commanding view of the craggy hills that ring Kabul, their khaki colour contrasting with the intense blue of the sky. Trees had been cut down for firewood and the grass was patchy. Even in that condition, the garden provided weekend relief for families to lay carpets on the ground, turn on the radio and get out their raisins and pomegranates. It was the largest park in Kabul.

When the western-supported Islamists captured the city from its communist modernisers in 1992 and started the internecine artillery battles that flattened several districts, the garden suffered badly. Irrigation pumps were destroyed and the remaining trees died.

The place has been transformed over the last three years. Work started with consulting the community that lives in mud-brick homes on the steep hillside above the garden. Many had fled to Pakistan but came home when they thought the war was over. Others are peasants who moved to Kabul in the hope of work, bringing the city's population from 700,000 in the 1980s to almost 4 million today.

With co-funding from the German government, the Aga Khan paid for water pumps, storm drains and steps up the hillside. Thousands of local men were employed to build a wall round the garden, as well as its terraces. They are still completing restoration of the Haremserai, or Queen's Palace, which dates from the 1890s and will be used for exhibitions and conferences as a money earner.

This place is not just a garden. "People are proud of it. It is part of their national identity," says Leslie. After all, its founder was the emperor Babur, who launched the Mughal dynasty. Even as he swept through northern India funding the designers who devised the stately arches that have become the subcontinent's best-known building style, Babur dreamed of this hillside in Kabul. He wanted a garden to relax and eventually be buried in. Nowhere in India could match it.

Working from Babur's original notes, the restorers have planted walnuts and plane trees on the outer edges of the site and denser groups of mulberries, apricots, figs and almonds near the central axis. The headstone on Babur's grave is scarred with mujahideen bullets, but the walls which once enclosed it have been rebuilt according to 19th-century travellers' sketches, creating a tranquil precinct. The garden's treasure is the white marble mosque built by Shah Jahan during a visit to his ancestor's grave. It is tiny but just as beautifully formed as the Mughal ruler's Taj Mahal.

On a dry day this resurrected garden gives Afghans an escape from the present, as well as a reminder of their once proud past. There is little else, after their national museum was ransacked by the mujahideen, and the Bamiyan buddhas were blown up by the Taliban.

The Aga Khan, the spiritual head of the world's Ismaili Shia community, has poured money into other Afghan cultural projects, including the restoration of houses in Kabul's old city and the mausoleum of Timur Shah, one of the founders of modern Afghanistan. His network funds health facilities across the country, including hospitals, schools and teacher training colleges.

Like other international philanthropists, he is a sharp businessman. He is the major shareholder in the Serena, Kabul's only luxury hotel, and Roshan, the country's biggest mobile phone network. It is a sign of Afghanistan's lack of development that Roshan, with a staff of fewer than 1,000, is the largest employer and largest taxpayer, supplying 6% of the Afghan budget.

When Roshan started, the country had only 20,000 landlines, most of them in government offices. It may never get many more. The mobile's advance makes them redundant. Roshan already has 1.3 million subscribers and gains another 60,000 a month. Putting up phone masts in some of the world's most rugged countryside is not just a physical challenge. Local mullahs have to be convinced that the masts will not bring evil - a concern they tend to reject when they get a free handset.

But there is a problem with the Aga Khan's Afghan businesses. Staff say there is heavy favouritism towards Ismaili Shias. "Almost all of my colleagues are Ismaili Shias. It's pretty much the same with the receptionists," an Ismaili Shia waiter at the Serena hotel told me. Asked for statistics, Christopher Newbery, the hotel's general manager, said: "We do not seek ethnic or sectarian information from our staff on principle."

At Roshan, Shamsia Mitha, the public relations manager who is an Ismaili Shia of French origin, was embarrassed by a question about the company's sectarian makeup in Kabul. Altaf Ladak, the chief operating officer and another Ismaili Shia expat, rejected a request for figures to support his statement that "we have seven regional offices and make sure we hire people from each of the ethnic groups and try to be consistent with the ethnic mix of that region".

Less than 5% of Afghans are Ismaili Shias. A network that does so much to help the country to progress should surely be spreading its benefits impartially. After decades of religious tension and conflict, Afghanistan needs a few models of fairness at last.

Jonathan Steele