Pakistan and the Iran pipeline

Published: March 8, 2012

The writer is an analyst and a former ambassador to Yemen, Nigeria and Italy

Why did President Asif Ali Zardari defy the United States (by going ahead with the Iran-Pakistan pipeline deal) and claim during his speech in Larkana that he cares a toss for the US?

Consider. The Pakistan-Iran pipeline, if it ever gets off the ground, will only happen after, at best, three years because even the feasibility study that has just been commissioned by Pakistan won’t be completed till October 2013 and the pipeline construction can only commence when that is done. By that time, parts of Iran will be charred to smoking heaps and the pipeline project a part of history. Or, if that does not happen, Iran will arguably possess a nuclear weapon.

In either eventuality, maintaining US sanctions would be pointless, particularly if a nuclear Iran moves smartly to assuage international concerns by agreeing to a ‘no-first strike’ pledge and thereby eliminating, or nearly so, the danger of a nuclear conflagration with Israel.

Alternately, if there is a US-Iran war, the ‘force majeure’ exemption clause in international contracts allows one, or both parties, to withdraw without incurring any penalty, so what the heck?

Of course, if meanwhile, the US-Iran stand-off is resolved diplomatically, so much the better, as the lifting of US and UN sanctions on Iran would obviously form part of any settlement and hence, the pipeline project could proceed smoothly.

Mr Zardari also stands to benefit politically in the run-up to the general elections next year by claiming he is bravely standing up to American bullying. And just in case the PPP is wiped out by the Imran-generated tsunami, the next government, and not Zardari, will have to deal with the US and the consequences of his ‘brave’ stance.

The only risk President Zardari is taking is angering America and, of course, risking suspension of US assistance for the next 12-24 months. That, too, should not be that much of a bother since there is hardly any prospect of near term inflow of US aid even if the current gridlock is eventually removed.

Moreover, Pakistan can easily survive without US largesse for the next couple of years. Besides, it has other cards to play, including the resumption/cutting off of Nato supplies to Afghanistan and of a ‘US-friendly’/ ‘US-unfriendly’ role in the event of a US- Iran war to remind the US to tread lightly for its own good.

Moreover, if the government fails to raise the estimated $6-7 billion that Pakistan is required to incur for the completion of the project, it would have nevertheless demonstrated concern for the ‘welfare’ of the people and regard for neighbour Iran by concluding the agreement.

This was evident, too, in Ms Khar’s remark that in case the US imposed sanctions — as if that is not a foregone conclusion considering that the US is obliged to do so by law — Pakistan would weigh the pros and cons before taking a final decision on the project.

Actually, it would perhaps have been wiser for the PPP-led government, and especially President Zardari, to wait when there is so much uncertainty. Moreover, by the time the feasibility report is done, his co-signatory, Iranian Presiden Mahmoud Ahmedinijad may well be out of a job. Khamenei will likely abolish the post of president using the parliament he now dominates and Iran will be in a deeper mess, not to mention even more isolated internationally.

Why then has the president pushed ahead nonetheless, notwithstanding so much uncertainty?

Published in The Express Tribune, March 9th, 2012.

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Reader Comments (14)

  • faraz
    Mar 8, 2012 - 11:43PM

    Nothing arouses Pakistani middle class more than hollow rhetoric. Everyone idolized Rabbani for this act of ‘bravery’! Many were predicting the formation of a new alliance that would uproot US from the region! It’s just an electoral gimmick. For next century, PPP would remind how they defied the global opinion and signed a piece of paper.

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  • Marc
    Mar 8, 2012 - 11:57PM

    “US is obliged to do so by law” : Not quite. US has made no attempt to impose any sanctions on Turkish pipeline from Iran. So application of sanctions is subjective. I mean even Afghanistan is buying Iranian oil as well as India and China. Why are Paks so timid?Recommend

  • John B
    Mar 9, 2012 - 12:58AM

    After the US presidential election in Nov, PAK and Iran will be the full focus of the new US administration.

    I doubt PAK president is sincere in his Iran pipeline, given his stated desire to keep PAK out of US-Iran conflict. Iran pipeline will bring PAK squarely in the middle of the conflict, and PAK has no leverage in this deal.

    All the rhetoric is for domestic politics and all parties in PAK have to sing the tune during election time. Let us not waste any more time on this dead horse.

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  • Arindom
    Mar 9, 2012 - 1:31AM

    ONE thing I could never get is why do Oil pipelines get clothed in Politics? Oil Pipelines are meant to transport oil – so that both the seller and the buyer benefits economically. Seller – so that it can move it’s oil at a lower cost to it’s markets. Buyer – so it can buy at a cheaper rate than. If the economic benefits over the long term donot outweight the investment costs, no pipeline should be constructed and vice versa. PERIOD.
    Decisions related to construction of an Oil pipeline should involve only businessmen and economicsts. Not politicians and Diplomats. There is a great danger in being carried away by rhetoric and push for an economically un-viable multi-billion dollar project. If the costs of the project and of transporting oil through pipes turn out to be too high, and buyer is better off transporting by ships, then who will pay for the Billions of Dollars of LOSSES incurred in the project? Not the Politicians who fanned the rhetoric? Not the Bureaucrats who will continue to get their plum benefits? Yes, it’s the common man – by sacrificing even more of their welfare budget.
    So I’d advise everyone, as a humble commoner to insulate yourselves from ALL RHETORIC and make a disspassionate and objection Economic analysis of the the pipeline – whether Iran-Pakistan or it is Turkmentistan-Pakistan-India or whichever. This is about ECONOMICS and DEVELOPMENT. Not POLITICS. If you get this wrong – BILLIONS and BILLIONS will go down the DRAIN. We in this poor part of the world cannot afford this luxury.

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  • MarkH
    Mar 9, 2012 - 2:27AM

    “In either eventuality, maintaining US sanctions would be pointless, particularly if a nuclear Iran moves smartly to assuage international concerns by agreeing to a ‘no-first strike’ pledge and thereby eliminating, or nearly so, the danger of a nuclear conflagration with Israel.”

    If Iran’s words were trusted this situation would not exist. The whole thing you call bullying isn’t even bullying, either. We know you Muslims always want to be an exception to everything if it’s what you may desire. But, you’re not. If you were being bullied, the reaction the US has had would be much different. The wording and recommendations, like it or not, were people trying to be nicer than what many would get. Pointing it out and offering you recommendations is an action that reflects that they don’t want it to happen to you/put them on you. But, face it, you’re not special. Doing Pakistan any favors is quite a thankless job. You make millions of bad decisions based on your superhumanly contradictory inferiority complex and delusional sense of superior entitlement. What’s one more, right?

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  • Alami Musafir
    Mar 9, 2012 - 4:53AM

    Pardon me Mr Hilaly but could it be that the Iranian nuclear threat is just as much a sham as the Iraqi weapons of mass destruction was ? In other words, whether or not Iran goes nuclear is irrelevant, its simply a convenient excuse, at the present time, to attack and neutralise it. And if it does go nuclear, some other trumped up charge will be substituted to attack and destroy it. In such a climate a willingness on Mr Zardari’s part to press ahead with the pipeline is doubly commendable. On the one hand such expressions of solidarity with Iran in the face of US anger will always be remembered by our neighbour, regardless of future events. On the other hand Pakistan does desperately need Iranian gas, and the more it dawdles with this study and that analysis, the more permanent and more extensive will be the damage to our gas fueled industrial landscape. Factories which cannot produce product though lack of power cannot be sustained for very long, the investment loan interest and other the fixed overhead costs will bankrupt their owners.

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  • Naila
    Mar 9, 2012 - 4:54AM

    Well, author covered international dimension of Pak-Iran pipeline ignoring the internal Himalayan crisis of Balochistan. Out of 2100Km long pipeline 1500km will pass through Baloch-land , currently in full-fledged rebellion against Islamabad. Also there is another important issue of high price accord along with insecurity of the pipeline.

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  • ParvezM
    Mar 9, 2012 - 5:22AM

    ZH you make lot of assumptions, mostly political. First, the cost of Pakistani section is less than $7.5 is around $1.2 billion and if it is done by local contractors then it is possible to do it for $700 million. If you don’t want to do it then put the cost at $10B and then it is not feasible.
    Do you have any estimates of commissions, bribes and payoffs? With your experience you should be able to guess it off the top of your head.
    Secondly, the geo-politics is not moving in favor of Anglo combine. Even India in their heart would want the project to go thru and they can piggy-back to get additional energy.
    Third, give the construction to Russians and they would finance and build it. They are in a mood to stick it to you know who.
    Lastly, is there a carrot Washington can offer which is worthwhile.

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  • Analyst
    Mar 9, 2012 - 10:14AM

    Hypothetical article far from facts and ground realities…

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  • Shoaib Mir
    Mar 9, 2012 - 12:00PM

    Having given nearly half a dozen arguments in favour of the Iran-Pakistan gas pipeline, Zafar Hilaly has the cheek to ask, “Why then has the president pushed ahead nonetheless, notwithstanding so much uncertainty?” From a former diplomat, this is political rhetoric at best and double speak at worst. President Zardari has obviously learnt realpolitik and pragmatism much faster than these career diplomats.

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  • Saeed Irfan
    Mar 9, 2012 - 12:16PM

    Too many baseless assumptions. The article is going no where and is coming like a haphazard dream. 50% of Pakistan energy needs are met by gas and Pakistan needs this pipeline. So build it and get over with it.

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  • Alami Musafir
    Mar 9, 2012 - 4:03PM

    Naila raises a crucial point. There’s no point in building the pipeline if it gets blown up every other month. Could the Baluchis be pacified by transit fees based on the amount of gas passed through the pipeline, paid directly to the ordinary Baloch as opposed to their leaders. After all it is their land which is being used for the purpose and they ought to benefit. In my humble opinion the application of this quid pro quo principle through out our land would also take care of the Taliban and other insurgencies. To make the package even sweeter, the money could be invested in permanent infrastructure projects, schools, powerplants, railroads etc built by Baloch labour and using their materials (ie the money is entirely locked in the local Baloch economy).

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  • Sunny
    Mar 9, 2012 - 5:46PM

    When I comapre this ex diplomat with Tariq Fatimi, another ex diplomat of same era, Fatimi stands out in his view points often expressed in this news service.

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  • sajjad
    Mar 13, 2012 - 1:52AM

    don’t worry about iran. iran will remain the same the way it is now. we ll be in deeper mess if we wait any longer. we need gas to run our homes, factories, businesses. we ll see what united states will do upon completion of this gas pipeline. US always impose sanctions unless it has some interest in pakistan.

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