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By Katrina Manson
LASHKAR GAH, Afghanistan (Reuters) - After the Taliban made nine threatening phone calls and fired a Kalashnikov outside his house, Shah Mohammad Mir left his hometown for months before returning with a new car and a new telephone number.
His crime was lending tiny amounts of money to farmers with as few as five sheep or to women who embroider traditional fabric for a few dollars a month.
Mir is director of the Helmand Islamic Investment and Finance Corporation, an Islamic credit union funded by Britain which is part of a larger civilian effort to turn the population in Helmand away from the Taliban and into work.
Patrolled by armed men who guard its Lashkar Gah head office, the corporation already has three branches in Helmand -- one of Afghanistan's most dangerous provinces, where thousands of foreign troops are struggling to turn the tide on a rising insurgency.
Since the end of 2007, the credit union in Helmand has in total lent $1 million (589,600 pounds) to 1,441 people, from farmers to flower sellers, from tailors to tradesmen.
"I'm just competing with the Taliban," said Mir, sporting a long wavy beard and grey turban. "It is our country, our Afghanistan, and we're prepared to work for it. The Taliban intimidated me into leaving my job but I'm not scared - I'm a young man and a young man is never scared at any point."
The loans are given in kind, in keeping with Islamic Sharia law and paid back with a 2 percent "administration charge" rather than interest repayments, which are forbidden under Islam.
The money, usually less than $2,000 each loan, means that farmers who would have grown poppy -- whose inputs are provided by the Taliban and repaid with their harvest -- can grow wheat and other crops independently and sell their own produce.
More than 30 men have abandoned the Taliban as a result, said Mir, who was standing in a pretty courtyard garden landscaped by one of the scheme's beneficiaries -- a gardener whose legs and left arm were blown off in an explosion during the Russian invasion of the 1980s.
JOBS FOR AFGHANS
In Afghanistan, an estimated 65 percent of young people are unemployed, illegal opium is worth about half the country's GDP, and the informal sector accounts for about 80 percent of the economy, according to a British-led study earlier this year.
Some believe the battle for hearts and minds should really be framed in terms of a battle for stomachs.
"We call unemployment and hunger the underside of the insurgency, but in fact it is the elephant in the room," said Ralph Lopez, co-founder of Jobs for Afghans, a lobby group that believes cash-for-works programs can end the fighting.
"It is clear that a large-scale jobs program would slow or reverse the insurgency."
U.S. Army General Stanley McChrystal, commander of all foreign forces in Afghanistan, has urged a shift in strategy which places strong emphasis on the need to protect the population, whom he says make-up 70 percent of the Taliban.
Western military forces hope to improve Afghanistan's economy in an attempt to woo people away from the drug trade and the Taliban who they say pay fighters $10-a-day to pick up arms or place bombs.
"People do want to be in legitimate work," said Kim Kim Yee at USAID, which is funding the country's largest cash-for-work program with a $250 million budget, employing 100,000 people over the next year in the provinces of Helmand and Kandahar.
Afghan workers will clear canals of reeds, build shop stalls for bazaars and undertake maintenance for $5 a day, matching the provincial government's labour day rate.
The UK has also backed an employment scheme, worth $36 million over four years nationwide to create 20,000 jobs and boost incomes by 10 percent for 200,000 people, as well as longer term efforts to boost agricultural processing and farming, on which up to 80 percent of the population relies.
For some, efforts concentrating on job creation rather than fighting can't come soon enough.
"The international troops are in Afghanistan but even they can't bring security," said Mir. "Giving jobs for the people is what's going to make things more positive. If we can get rid of the unemployment that should also bring the security."
(Editing by Golnar Motevalli and Megan Goldin)