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EDITORIAL: How real is the Iranian pipeline?

Mr Praful Patel, a vice-president of the World Bank, said in Islamabad the other day that the World Bank is ready to fund the proposed $7.2 billion Iran-Pakistan-India (IPI) gas pipeline project. Although Pakistan has not approached the Bank for any such project loan, he said, the Bank would seriously consider any such request. He regretted that Pakistan has missed out on water conservation and hydroelectricity and now has to rely on imported gas for energy needs. Mr Patel also referred to another pipeline about which Pakistan started dreaming in the 1990s — the Turkmenistan-Afghanistan-Pakistan (TAP) — and expressed the Bank’s willingness to finance it too. Mr Patel said that in the event of the materialisation of the IPI gas pipeline, Pakistan would also get an annual transit fee from India, which would play a pivotal role in strengthening its economy, and that the “IPI gas pipeline project is a win-win situation for Pakistan and India”.

This is a very upbeat message from the World Bank. We know that the United States has placed sanctions on Iran, with a ceiling of $40 million for any company investing there. But Pakistan expects that the US will not include any investment in Pakistan on the Iranian pipeline as being within the ambit of its sanctions and therefore not sanction companies willing to work here. The US Congress is already hearing cases against American companies that trade “indirectly” with Iran despite the sanctions. If the US vetoes it at the Board of Directors’ meeting, the World Bank may not fund the Pakistani part of the IPI.

India, too, has had its bouts of uncertainty about the IPI. It fired its first minister for oil and gas, Mani Shankar Ayer, because he was too enthusiastic about the pipeline and did not pay much heed to the US-India nuclear deal which was in the offing. The nuclear deal with the US went into the doldrums for a while, which probably allowed India to sound enthusiastic about the pipeline again. But India’s negotiating tactics with Pakistan over the transit fee have sometimes pointed to possible delaying tactics. Now the news is that the US and India may break the deadlock over their nuclear treaty.

There have been missteps in the tripartite contacts over the project. Pakistan, which sells its domestic gas at one-third the international price, was daunted by the price quoted by Iran for its Pars gas. The world was already on notice on the rising price of gas, but the news got to Pakistan and India. Late in the day. India characteristically sought to drive a tough bargain and Pakistan went along. After years of bargaining, now both agree that the BTU price of Iranian gas would be equivalent to the price of oil, at $60 per barrel. The same sort of battle was fought by India and Pakistan over the transit fee.

When President Pervez Musharraf first talked publicly about the “fee” that will accrue to Pakistan, someone in Islamabad had fed him an exaggerated figure. He spoke of $700 million annually, almost equal to the assistance Pakistan gets from the United States these days. Realism dawned only after listening to the Indian response. After many months of wrangling and tough Indian bargaining, it is now not even $150 million. The pipeline through Pakistan will be almost a thousand km long and will require constant security and maintenance.

The latest news is that Pakistan has given ground on its earlier proposed rent on the pipeline. It has climbed down from $1.57 per million British thermal units (BTU) to $0.70-0.75 per million BTU as transportation tariff. But India wants the three-quarters of a dollar rent reduced to just half a dollar. It is obvious that India drives the bargain keeping in mind Pakistan’s own need for the pipeline. On the other hand, Pakistan is aware of the real cost of laying the pipeline (which will have to be underground, and therefore very expensive, if it is to be secured against the Baloch nationalists) and then looking after it with at least three new cantonments along the route.

Still, there is many a slip. The TAP project, which was to run through Afghanistan, looked even more feasible than IPI. Among all the parties which de-linked themselves from it, Pakistan stuck to it the longest and gave up only when its pursuit of “strategic depth” came to grief in 2001. As long as the war in Afghanistan continues, reference to TAP is misguided. Will the Iranian pipeline meet the same fate? There are three risky factors that might scuttle it. There is Iran under Mr Ahmadinejad which might be attacked by the US; there is the age-old lack of trust between India and Pakistan, who might not accept becoming interdependent; and there is the Baloch nationalist who will keep blowing up the pipeline until he is given a stake in the fruits of its development.

Let us be honest. Pakistan needs to have the pipeline most. It is only later that it becomes important for Iran and India. Once built, it will provide for the economic development and transformation of South Asia as well as give a new identity to the isolated state of Iran. *

SECOND EDITORIAL: Pakistan’s untamed militias

The US State Department’s annual country report says Pakistan “remains a major source of Islamic extremism and a safe haven for some top terrorist leaders”, despite being a frontline ally of the United States in the “war on terror”. The report names all the “Islamic groups” that survive in Pakistan under assumed names after they were banned under their original names. President Pervez Musharraf made efforts to tame these groups but for reasons not very clear to most Pakistanis he has not been able to put the militias to rest.

Militias are created when deniable covert wars are fought. Pakistan spawned them under the approving eye of the United States when it was helping defeat the Soviet Union in Afghanistan. Then Pakistan used them against India in Kashmir. Over time it so got used to its militias — named nicely in Urdu — that it forgot that they are the source of other things like terrorism and sectarian massacres too. Now they are embedded in civil society and rule through intimidation. Who is subject to this intimidation? The judiciary, clearly, but all the other institutions of the state, including the political parties and the media, are liable to attack. How can any state function like this? *

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