Pakistan says gas project offers South Asia peace hope
By Krittivas Mukherjee
June 27, 2008
Pakistan's foreign minister on Friday touted a cross-border deal bringing gas from Iran to India as a "pipeline of peace".
India and Pakistan, which have gone to war three times since independence in 1947, are trying to re-invigorate a sluggish four-year-old peace process.
Both are also desperate to tie up future energy supplies to fuel their fast-growing economies, but the United States has tried to discourage any deal with Iran because it suspects Tehran is trying to build nuclear arms.
"It can be a pipeline of peace and new bondage," Shah Mehmood Qureshi, on a three-day visit to India, told a news conference.
"The IPI (Iran-Pakistan-India) gas pipeline is to our mutual benefit. Both sides stand to gain."
India has been cautious about the $7.6 billion pipeline project, triggering a pledge from Iran and Pakistan to press ahead without Indian participation.
Analysts say New Delhi wants to reduce the risk of supplies being cut during times of tension with Pakistan and is under pressure from Washington to back down from the deal.
India had missed a meeting in September, citing issues including transit fees and transportation tariffs with Pakistan. India has disgreed over the delivery point of the gas -- the point where India takes control of supplies.
Officials from India, Pakistan and Iran will meet next month in Tehran over the pipeline.
"We are hopeful that it will be possible to resolve this issue both from technical, commercial and all aspects," India's Foreign Minister Pranab Mukherjee said.
Work on the pipeline could begin next year and is due to be finished by 2012.
It would initially transport 60 million cubic metres of gas (2.2 billion cubic feet) daily to Pakistan and India, half for each country. The pipeline's capacity would later rise to 150 million cubic metres.
Pakistan's new civilian-led government has high hopes of building better relations with India and the pipeline is seen as a platform for mending ties.
The nuclear-armed rivals began a peace process more than four years ago, having gone to the brink of a fourth war in 2002, but had been in a lull because of political turmoil in Pakistan.
"The political environment to make the peace process result-oriented is right on both sides," Qureshi said.
"We must not miss this opportunity. It would be great loss."
No reference was made to the disputed Himalayan region of Kashmir which the two countries claim in full but rule only in part.
Mukherjee said Indian and Pakistani foreign officials would meet in New Delhi on July 21-22 to try to push peace talks forward. (Editing by Alistair Scrutton)
The Ultimate Lubricant:Oil and Indo-Pak Ties
By Siddharth Srivastava
OCTOBER 2004 Volume V • Issue 10
Despite harsh rhetoric, the economic benefits of cooperation on an Iran-Pakistan-India gas pipeline could open the door to warmer India-Pakistan ties, writes Siddharth Srivastava.
The just concluded first round of the composite dialogue process between India and Pakistan witnessed a war of words stretched to the limits of inimical diplomatic exchange. The foreign ministers of India Natwar Singh and Pakistan Khurshid Mehmood Kasuri said everything that one hoped would not be said, in a public platform.
Both the sides highlighted the two issues that the other does not want to hear much about — while Pakistan talked about “human rights violations” in the Indian portion of Jammu & Kashmir, India expressed “serious concerns” over Pakistan promoting cross-border terrorism.
Yet, there is a silver lining to the exchange which could form the future bedrock against relations turning awry — a decision has been taken to involve for the first time the petroleum ministers of the countries to discuss the Iran-Pakistan-India gas line, which many observers here feel could set the course for a sustained and long-term peace between the two countries which almost went to war a couple of years ago and were involved in a low-intensity conflict at Kargil in 1999.
In the couple of days that Kasuri had been here, he covered almost every aspect of the Kashmir issue that generally does not go down well with India. For most part of his visit he was closeted with separatist Hurriyat leaders of the state to convince them to sink their differences and form a united front once more, while the Indian stand is that free, fair and popular elections have been held in the state which the Hurriyat boycotted and hence other political parties should be given equal importance; Kasuri insisted that any talks with India should involve representatives of Kashmir as well, making the discussions “tripartite,” while India’s stand is that the Indian portion of J&K is an inalienable part of India with the Indian government vested with full authority to discuss any issue concerning the state; Kasuri also mooted the proposal of a separate appointment of “high representatives” to discuss Kashmir, which India feels is not necessary given the high-level official exchanges that are already in place as part of the peace process.
In short, Kasuri ensured the centrality of Kashmir despite his later re-iteration that Kashmir is not the “unifocal” area of interest between the two countries. Natwar Singh, on his part, also did not leave any stone unturned to appeal to the hardliners in India, by concentrating quite a bit of his talk on the issue of Pakistan’s promotion of cross border terrorism and the human rights violations in the Pakistan portion of Kashmir during the joint press conference that the two ministers addressed. The one fall out of the exchange has been that the bus service from Indian Kashmir to Pakistan, which the local population is in much favor of, seems to be mired in technical difficulties.
Indeed, analysts here believe that any short-term diplomatic breakthroughs have reached a cul-de-sac, with Kashmir and terrorism as the main stumbling blocks that show no immediate sign of resolution. The fundamentalist and jihadi elements in Pakistan are deep-rooted within the Army and sections of Pakistani society that will make it difficult for Pakistan President Pervez Musharraf to take on militants head-on even if he wants to. The clear indicators are the assassinations attempts that the general narrowly escaped around the time that former Indian prime minister Atal Behari Vajpayee and Musharraf were trying to break the ice in January this year. And as long as the militant view exists, no Pakistan leader can be seen going soft on Kashmir.
Though both the countries are committed to continue the peace talks with a meeting of Indian Prime Minister Manmohan Singh and Musharraf slated in New York, observers here are looking at economics creating the necessary momentum to propel the two nations forward. Thus, many here are attaching as much, if not more, importance to the luncheon meeting between Kasuri and India’s Petroleum Minister Mani Shankar Aiyer, who wants to push through the Iran-Pakistan-India oil pipeline, a $3.5 billion project designed to transfer gas from Iran to India through Pakistan.
Negotiations on the 1,600-kilometre pipeline began in 1994, but no headway has been made until now because of tensions between Pakistan and India and the project’s massive cost.
Officials said warming ties between India and Pakistan despite the known prejudices augurs well for the project. For Iran, which holds the world’s largest gas reserves after Russia, India is as important as the European market that it hopes access through a pipeline across Turkey. India, which imports nearly 70 percent of its annual energy needs, has been using ships to ferry liquefied natural gas from Iran because it fears a gas pipeline running through Pakistan could be targeted by militants.
There is a visible change in the approach now. “India and Pakistan have recognized the importance of available energy resources in the region,” Kasuri told reporters after meeting Aiyar. “Officials from our ministries of petroleum and gas will meet later this year to discuss issues of multifarious dimensions,” he added.
“If our security concerns are adequately addressed, this project could turn out to be the economic bedrock which could buttress many more economic cooperation proposals,” a spokesperson for the foreign ministry said. “The economic gains for Pakistan, estimated at between $600 million and $800 million annually in transit fee alone, are a reasonable guarantee against sabotage,” the official added.
In order to make the proposal viable India has offered that it could meet the entire diesel requirements of Pakistan by laying a pipeline from Jalandhar (in Punjab) to Lahore. In turn, Pakistan could help in laying the gas pipeline from Iran to the Indian state of Gujarat. Pakistan currently imports 4.5 million tons of diesel every year from Kuwait and other Middle Eastern countries. Pakistan has said that it may review its ban on imports of diesel from India to try to reduce its dependence on Middle Eastern supplies. India’s largest refiner, Indian Oil Corporation, which has pipelines running close to the Pakistan border, has submitted a proposal to export surplus diesel to Pakistan.
The oil pipeline, accompanied by revenues, will create a constituency within the Pakistan establishment as well as in India that will root for normal relations and could over time and more economic co-operation. This could be a powerful deterrent to two major institutional stumbling blocks — the vested interests in the Pakistani Army which clamors for funds and importance in order to promote anti-India militants, and the Hindu nationalist hardliners in India.
Indeed, observers detect a strong element of realpolitik even if couched by the harsh Kashmir language, among Pakistani leaders, the beginning of which was made during the South Asian Association for Regional Cooperation summit in Islamabad this year. The summit led to significant breakthroughs on the economic front, primarily in crafting the framework agreement on South Asian Free Trade Area. This will sharply boost economic cooperation over the next decade in the region, primarily between India and Pakistan. Pakistan had blocked SAFTA for as long as it could, but its economic woes have compelled it to change tack.
The most pressing factor in changing Pakistani diplomacy is the rising demand of its citizens for economic progress. Television images of an economically promising India have made an impact on the masses. Industry leaders of Karachi and Lahore, as well as people in Federally Administrated Tribal areas and the North West Frontier Province are also asking for their share of progress. Pakistan’s economy is growing at a sluggish 4 percent; India’s growth rate is double the figure. Twenty-five percent of Indians live in poverty; in Pakistan the figure is 35 percent.
From India’s point of view the Manmohan Singh government is now showing signs that it is serious about taking forward the peace process initiated by Vajpayee. The last thing it wants is to be labeled as having failed to make progress in what is considered to be Vajpayee’s biggest achievement when he was in power. Before the Kasuri visit Manmohan met Vajpayee over breakfast to glean his mind. Vajpayee advised Manmohan not to pursue the beaten path. Is oil and gas, then, the road not taken?
- Siddharth Srivastava is India correspondent for Siliconeer. He is based in New Delhi.