By Arsla Jawaid
The
controversial Iran-Pakistan (IP) gas pipeline has become an increasingly
problematic issue in the vacillating U.S-Pakistan relationship. The United
States has strongly condemned the project, but such rhetoric seems only to have
made Pakistan more determined to continue with it. An energy agreement between
Iran and Pakistan would be detrimental to U.S efforts to isolate Iran and force
the shutdown of its nuclear program. And while it could potentially alleviate
Pakistan's energy crisis, the proponents of the project seem more interested in
defying the West than inquiring about its ‘real' benefits.
Pakistan
is crippled by an energy crisis that causes power outages for hours, daily,
leading to violent protests around the country, such as those in Lahore last
week. Many do not have gas for heating or cooking purposes, and electricity
outages affect schools, hospitals, businesses and industries, bringing an
already dwindling economy to a halt. In such a scenario, Pakistan is forced to
look elsewhere to meet its needs.
The
IP gas pipeline is one such prospect. The idea, conceptualized in 1990 with
negotiations starting in 1994, is to construct a pipeline that would pass
solely between the two countries. As the prospect developed, India entered the
game, and the Iran-Pakistan-India pipeline -- popularly known as the
"Peace Pipeline" -- came into existence. In 2008, however, India
signed a civil nuclear power deal with the U.S and pulled out of the project;
many analysts accused it of succumbing to American pressure.
On
March 16, 2010, Iran and Pakistan signed an agreement on the pipeline during a
meeting in the Turkish capital city of Ankara. The revised pipeline, with a
projected cost of $1.5 billion, would start from the South Pars gas field in
Iran's southern city of Asalouyeh and pass through Bandar-Abbas and Iranshahr,
until it reaches Khuzdar, Balochistan. At Khuzdar, a section is planned to
extend to Karachi while the rest of the pipeline would continue through Sui to
Multan.
In
July 2011, Iran claimed that it had almost completed 900 km of its construction
of the 56 inch diameter pipeline, though this assertion remains unconfirmed.
Pakistan is to lay 781 km of the pipeline in its territory, and the project is
expected to be completed by December 2014. Although completion remains two
years away, Pakistan views this project as a medium-term investment to pull it
out of a crippling energy crisis. Iran has also expressed its commitment to
alleviating Pakistan's woes, and once operations begin it will provide 750
million cubic feet of gas per day for 25 years.
Pakistan
can no longer depend on domestic resources to address its crippling energy
problems. During the third Afghanistan-Pakistan-Iran trilateral summit held on
February 16, 2012, turning to Iran, Pakistan has reiterated its commitment to
the IP gas pipeline project, a 1,000-megawatt electricity transmission line,
and a 100-megawatt power supply from Gwadar to meet Pakistan's energy woes. In
return, Iran has offered to enhance bilateral trade to $10 billion by importing
specific commodities such as rice and wheat, in the following few months. But,
it is difficult to predict whether such bold developments will ever actually be
implemented.
The
United States, meanwhile, supports an alternate gas pipeline -- known as the
TAPI pipeline because it would run through Turkmenistan, Afghanistan, Pakistan
and India. The TAPI pipeline project has, however, been rejected by Pakistan
for a number of reasons. It will take much longer to materialize, will pass
through treacherous and unreliable terrain, and involves too many regional
players -- specifically India and Afghanistan -- which Pakistan views with
suspicion.
The
TAPI pipeline would flow through war-torn Afghanistan, and until the end game
there is clear, Pakistani authorities, justifiably, are not ready to take such
a risk on their energy survival. The situation recently grew more complicated
when Afghanistan hinted at possibly withdrawing from the project. Though the
final round of the TAPI negotiations are to be held on April 19, if Afghanistan
does indeed withdraw from the project, America's proposal of a viable alternate
to the IP gas pipeline would be in grave danger.
On
February 29, U.S. Secretary of State, Hillary Clinton expressed frustration
with Pakistan's intention to push ahead with the IP pipeline at a hearing
before the House Appropriations Subcommittee on State and Foreign Operations.
She threatened sanctions that "would be particularly damaging to Pakistan
because their economy is already quite shaky," should Pakistan continue
with its commitment to build the IP gas pipeline and hence, violate the Iran
Sanctions Act. While a proposed Iran-Turkey pipeline appears to progress sans
sanctions, Pakistan could face an immediate termination of financial and
military assistance.
Secretary
Clinton's remarks have raised serious objections, and have only made Pakistan
more adamant about continuing with the project. The "threat" prompted
brave words from Foreign Minister Hina Rabbani Khar: "We are a sovereign
country and we will do whatever is in the interest of Pakistan. All of these
projects are in Pakistan's national interest, and will be pursued and completed
irrespective of any extraneous considerations."
In
November 2010, similar defensive posturing was prompted when Ambassador Munter
stated that "the plan to get gas from Turkmenistan is a better idea"
than the IP pipeline. Pakistani Information Minister Firdous Ashiq Awan slammed
the comment, stating, "Islamabad will not accept any dictation regarding
its internal affairs from any foreign country. Gas from Iran is in the
country's best interest."
However,
it is still unclear whether the IP gas pipeline is indeed in the best interests
of the country. The pre-feasibility study that will determine whether the
pipeline should be built by estimating the finances needed and the expected
timeframe of the project has only just begun. The most pressing issue Pakistan
will face if it decides to construct the IP gas pipeline, is that of raising
finances. The issue has gained geo-political attention, and a consortium led by
the Industrial and Commercial Bank of China (ICBC) has recently pulled out of
the project, prompting the Pakistani government to look elsewhere for finances.
The federal government is currently negotiating a deal with Russian giant gas
monopoly, Gazprom, for financial and technical assistance. While no agreement
has currently been reached, senior level discussions are underway. With a
crippled economy and diminished finances, Pakistan may very well be unable to
embark on the project due to lack of funds from international investors.
With
Pakistan still grappling for funds, and the feasibility study commissioned by
Pakistan not expected to be completed before October 2013, vehement U.S
opposition and rhetoric is premature at this moment. Sanctions would severely
affect the economy, and Pakistan is unlikely to be ready to take that risk.
Most recently, Pakistan hired experts to study the consequences of the
sanctions, should it move ahead with constructing the pipeline. While the
country can benefit immensely from an energy pipeline with Iran, being closely
associated with a nation receiving so much negative international attention may
do it more harm than good.
Without
a clear argument and only an unclear picture of the project itself, Pakistan's
determination to construct the pipeline is simply a political move in response
to foreign interference in internal matters, and nothing more than that at this
moment.
Armed
with this realization and an awareness of the rampant anti-Americanism in
Pakistan, the United States needs to adopt a more sensitive and informed
approach to tackle the equally sensitive issue of the IP pipeline. The United
States must differentiate between nuclear development and regional cooperation.
By encouraging trade and energy agreements, it could illustrate a genuine
concern for peace and stability in the region, as well as repair America's
image abroad. The United States must show a serious commitment to alleviating
the energy crisis in Pakistan, and hold talks with key players in the private
sector. The private sector will not only serve as a wealth of information and a
vehicle of action but also as a prime interlocutor.
The
State Department is currently helping Pakistan with thermal energy generation,
and investing in dams, but it must also consider working jointly with Pakistan
on stand-alone power projects that utilize wind and water, contain leakages
that remain a prime reason of energy wastage, suggest mechanisms to avoid
energy theft, and foster dialogue between experts in the field.
Finding
support for a conciliatory approach may not be easy. The Obama administration
is facing tough questions at home on its continued engagement with the Af-Pak
region, having achieved the objective of killing former al-Qaeda leader Osama
bin Laden. Defending the war in Afghanistan and securing a $2.2 billion budget
in economic and security assistance for Pakistan will be difficult.
Additionally, pressuring South Asian countries to ostracize Iran will only lead
to more animosity. The need of the hour is cooperation, not sanctions.
Illustrating a true commitment to addressing Pakistan's greatest handicap,
instead of condemning regional policy decisions, will open up a world of
opportunities for both sides.
-This commentary was published in Foreign Policy on 05/04/2012
-Arsla Jawaid is Assistant Editor at the monthly foreign policy magazine, SouthAsia. Arsla holds a BA in International Relations from Boston University, with a focus on foreign policy and security studies
-Arsla Jawaid is Assistant Editor at the monthly foreign policy magazine, SouthAsia. Arsla holds a BA in International Relations from Boston University, with a focus on foreign policy and security studies