Iran Gas Pipeline Could Ease India-Pakistan Tensions

by Ranjit Devraj

(IPS) BANGKOK -- Of the many attempted initiatives to forge lasting peace between South Asia's squabbling neighbors, none can challenge the promise of Iran's proposed natural gas pipeline to India traversing through Pakistan.

New Delhi and Tehran first signed a memorandum of understanding for the pipeline in 1993 but the intervening decade saw India's relations with Pakistan worsening over the status of Kashmir.

In 1999 the nuclear-armed neighbors fought an undeclared but nevertheless bloody war at Kargil on the Line of Control that divides the Pakistani- and Indian-controlled portions of Kashmir and 2002 saw them massing close to a million troops on their common borders ready for an all-out war.

Such events could hardly inspire the confidence needed for investing in a 2,670 kilometer pipeline, 707 kilometers of which would traverse Pakistani territory -- some of it in tough tribal areas like Baluchistan where Islamabad's writ does not quite run.

But following the rapport achieved at a regional summit in January this year, New Delhi and Islamabad have moved closer through a "composite dialogue process" which takes in contentious Kashmir as well as other long-pending bilateral issues such as improved trade, travel between the two countries and the gas pipeline.

Significantly, a joint statement issued in New York, following a meeting between Indian Prime Minister Manmohan Singh and Pakistan President Pervez Musharraf on the sidelines of the United Nations General Assembly (UNGA) in September, talked about the pipeline and how it could "contribute to the welfare and prosperity of the people of both countries."

Since then momentum has been building up on both sides of the border in favor of the pipeline with voices supporting it now distinctly louder than those against.

Last week, for example, Khalid Ahmed, executive director of the 'Daily Times' and 'The Friday Times', speaking at a gathering of Indian and Pakistan journalists in New Delhi stressed the important role that the gas pipeline could have in breaking the South Asian stalemate.

Ahmed thought that apart from the $600 million that Pakistan stands to earn annually as transit fees, the pipeline would offer the government an opportunity to more effectively administer and modernise its 'ungovernable' tribal population.

"It is not a question of how much Pakistan will earn, but the fact that a pipeline will force Pakistani authorities to impose municipal laws in tribal areas, overruling their tribal decrees," he said.

On the Indian side, a long-term supporter for the pipeline has been the distinguished energy expert R.K. Pachauri, who is director of the independent Tata Energy Research Institute (TERI) and director general of the Geneva-based Intergovernmental Panel on Climate Change (IPCC).

Pachauri recalls that soon after Ali Shams Ardekani, an Iranian economist (who also served a term as deputy foreign minister), first broached the idea of feeding energy-hungry India through a gas pipeline in 1989, many Indian politicians said the country could not mortgage its energy future to Pakistan. They then initiated a costly, time-consuming study for an alternate undersea pipeline.

"But successive governments in Iran kept up the effort, understandable because Iran's best market for its southern gas reserves is India," said Pachauri who calls the pipeline a "win-win situation" for all parties.

India would at once be able to source gas at half the cost of what it now pays for gas imported as liquefied natural gas (LNG) and Iran, the world's largest exporter of gas would find a ready market for its huge reserves. Pakistan would gain from the royalties and may even be able to export some of its own gas through the pipeline.

While India's decision-makers do have valid security concerns there was much going for the project especially when multi-lateral institutions such as the World Bank and international stakeholders were involved in it.

According to Pachauri, India could even generate power for Pakistan using the Iranian gas and create an "interlocking" measure. "The gas pipeline from the former Soviet Union to Western Europe was negotiated at the height of the cold war."

Also as Pakistan's own energy needs grow it could benefit from economies of scale with a larger pipeline configuration already in place and even end up using fifty percent of the gas.

India and Pakistan already have, since 1960, entered into a World Bank-guaranteed arrangement to share the waters of the Indus River that has weathered several wars and diplomatic storms.

Pachauri thinks that should Pakistan ever disrupt gas supplies, India always had the option of retaliating by stopping the waters of the Indus. "This is not spoken of openly," he said.

The energy expert said that all that was now needed for work to begin was a political go-ahead from the concerned parties for a firm tripartite agreement.

Meanwhile, there has been no dearth of money to build the $5 billion pipeline with international financiers like the Japanese Sumitomo Mitsui Banking Corporation (SMBC).

SMBC has indicated its readiness to fund it through a letter to the Indian government.