Welcome change or more of the same?

Published: March 20, 2012

The writer was Pakistan’s ambassador to the EU from 2002-2004 and to the US in 1999 tariq.fatemi@tribune.com.pk

An alarming fall-out from the enhanced US-Iran tension, is the renewed pressure on Pakistan to abandon the gas pipeline project with Iran, which could kill the prospect of an early end to the nation’s worsening energy crisis.

While it is essential to invest in further gas and oil exploration and also exploit other sources of energy, the most economic and secure way for the foreseeable future, is to import gas from neighbouring Iran –– the world’s second largest gas producer. It sounds simple and do-able, but inability to appreciate the enormity of the challenge and advantages of this project, has stymied any meaningful progress on it, ever since Iran and Pakistan came to a preliminary agreement in 1995.

Regrettably, the Musharraf regime had no interest in the energy sector, as evident from its refusal to go either for the IP pipeline project or to heed the advice of experts who advocated construction of small and medium-sized dams, especially after Kalabagh Dam, became a contentious issue. When India pulled out of the project in wake of the Bush administration’s offer of civilian nuclear reactors in 2005, the national consensus favoured seeking a similar concession, or failing that, to obtain assurances that the US would not oppose the Iran-Pakistan pipeline project. Sadly, the government did neither.

However, if recent statements are to be believed, the current government appears to have woken up to the critical importance of this project. Foreign Minister Hina Rabbani Khar’s declaration that “these projects are in Pakistan’s national interest and will be pursued and completed, irrespective of any extraneous considerations” –– made in response to US Sectary of State Hillary Clinton’s thinly-veiled warning, that Pakistan should stay away from it –– represents a welcome change, provided that it is not meant merely to garner public approbation.

Secretary Clinton had added that, “as we are ratcheting up pressure on Iran, it seems somewhat inexplicable that Pakistan would be trying to negotiate a pipeline”. To Pakistanis, however, what is ‘inexplicable’ is the Obama Administration’s failure to appreciate the desperate economic needs of an ally, with whom it sought to establish strategic relations. Pakistanis recall the repeated assurances by both, Clinton and Ambassador Richard C Holbrooke that the administration would provide meaningful assistance to overcome our energy needs. Sadly, all that the US did was to keep pushing the Turkmenistan-Afghanistan-Pakistan-India pipeline, which experts agree will remain a pipe dream till our neighbour stabilises, and the Turkmen are able to convince the world that the gas they want to sell is theirs and not owned by Russia’s energy giant, Gasprom.

Of course, it is no secret that ever since the Islamic Revolution in Iran in 1979 overthrew America’s regional policeman, Washington has been engaged — both overtly and covertly — in destabilising that country. In more recent times, criticism of Iran has shifted away from allegations of involvement in terrorism to pursuing nuclear weapons, though acknowledging that these are all meant to promote the strategic goal of a regime change. While we have neither the will nor the capacity to dissuade the US from pursuing this adventurous policy, we have every right to question why a country that claims to be our friend would try to dissuade us from exercising the only serious option available for overcoming an energy shortfall, which has crippled the economy and thrown a huge number of people out of their jobs.

This is highly regrettable, as the US had no hesitation in modifying its domestic laws, violating the Nuclear Non-Proliferation Treaty provisions and arm-twisting Nuclear Suppliers Group members to offer the civilian nuclear deal to India in its desire to build a strategic partnership with her. While we do not grudge what the US wishes to give India –– a country described by then under secretary Nicholas Burns as “unique” for which a “unique agreement” had been crafted, Pakistanis are within their rights to expect that the US will show understanding of our legitimate needs, which incidentally will not mean investment in Iran’s economy, but in our own infrastructure.

Published in The Express Tribune, March 21st, 2012.

Reader Comments (19)

  • Falcon
    Mar 21, 2012 - 12:00AM

    I have another idea. Rather than trying to convince them so hard, why don’t we bring just 10 of US senators to our country and let them stay as guests with us for just a month in the midst of severe heat and load-shedding spanning more than 10 hours/day, that would be more than enough to change their mind that strategic deterrence of foes should not be pursued at the cost of suffering of allies.

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  • Cautious
    Mar 21, 2012 - 1:02AM

    which could kill the prospect of an
    early end to the nation’s worsening
    energy crisis.

    And why should anyone believe that the IP would result in an early end to the energy crisis? There is ample energy available on the Worldwide market – you just don’t have the money to buy it. The Iranians aren’t going to give you energy for free so where are you going to get the money to buy that energy. The implicit answer is that you expect to switch suppliers and hopefully gain enough savings to buy some incremental energy – how much depends on an economic analysis which Pakistan is reluctant to finish +/or publicize. In short — it might help or it might not — but it’s illogical to expect that it will result in an “early end” to anything.

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  • Ali Tanoli
    Mar 21, 2012 - 2:02AM

    @Falcon,
    Why not vacation resort in Jackobabad or sibi its gonna be real fun for senators hahahahah

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  • Meekal Ahmed
    Mar 21, 2012 - 2:06AM

    Sir,

    All I hear is plans to import, import, import and how this is going to solve all our problems.

    We have exploited so far some 26% of the potential of the mighty Indus. That is God’s gift to us that we have cast aside because just four provinces cannot sit together and figure out what needs to be done in the name of that much-abused phrase: “national interest”. Not even the last dictator could pull it off; but then he did not pull off much else either.

    Has anyone, including you, Sir, looked at the chronic disequilibrium in our external trade, now in its 64th year and going strong which we cannot finance? If all we are going to do is import, who and how will we pay for it since there is not much stress on exports or FDI?

    Perhaps it is little known that in national accounting terms a trade deficit actually subtracts from GDP growth. Given the size of our external deficit, I would guess an annual loss of about 1.5-2.0% in terms of annual GDP growth. That is a colossal loss to the economy.

    When was the last time one heard that OGDC has made a new find? What are they doing and who is their Minister? Could you, perhaps, write about that next time?

    Thank you.

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  • Falcon
    Mar 21, 2012 - 11:09AM

    @Meekal Ahmed:
    First of all, thanks for highlighting an alternate solution. Secondly, don’t you think considering the deepening divisions around ethnic and regional politics, it would be even more difficult now than it was in Musharraf’s time to push for the solution you proposed? Thirdly, 1.5% – 2% impact on GDP that you have mentioned would be fully attributable to this IP pipeline alone or that is the overall value of our current / projected trade deficit post IP project related imports?

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  • Mar 21, 2012 - 1:52PM

    Pakistani authors never compare themselves with China, but always India.

    They have to remember that you are comparing Pakistan with a Country that is in the G20, that has an economy 10 times the size, houses 1/6th of the World population and is a world renowned Democracy. It is also currently the 4th largest economy(PPP) in the World!; and, it will be the biggest or the second biggest in the World in about 3 decades.

    Pakistan, at best, is a middle level power and like other failed states like North Korea, possesses Nuclear Weapons.

    You might be thinking you are arguing something nice but its sheer idiocy to compare an ant with an elephant!

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  • Falcon
    Mar 21, 2012 - 6:57PM

    @BruteForce:
    Arrogance much? Please feel free to quote the source that cites India is projected to be the biggest economy in 3 decades. Don’t get me wrong. All greatness to India. But let’s keep things in perspective. You started out like us as well. If calling us a failed state makes your day, I suggest you find better things to do in life.

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  • fahim
    Mar 21, 2012 - 7:45PM

    @Falcon,

    Dude, please visit IMF website that updated 2011 data last month. India has already overtaken Japan and is now the 3rd LARGEST ECONOMY by PPP. And greatness lies when others call you great, not beating drums yourself. If the entire world, including our mountain/sea friend China calls us a troubled, failed, broken state, then there is concern. India is eons ahead of us in every aspect, so its better we learn to live according to our size and focus on our problems.

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  • Mar 21, 2012 - 7:56PM

    @Falcon:

    I am not surprised such findings are hidden away from Pakistan. But, this is the truth.

    “According to a study by US banking group Citi, India will be the world’s largest economy within 39 years. Indian GDP in 2050, measured by purchasing power parity (PPP), will be $85.97 trillion. China, in second place, will have a GDP of $ 80.02 trillion and the US $ 39.07 trillion”

    http://articles.economictimes.indiatimes.com/2011-11-12/news/303912681largest-economy-demographic-dividend-indian-economy

    Goldman Sachs predicts that “from 2007 to 2020, India’s GDP per capita in US$ terms will quadruple”, and that the Indian economy will surpass the United States (in US$) by 2043.

    http://en.wikipedia.org/wiki/EconomyofIndia

    Learn to read more International Reports. Your biased media, with a exception of few, is very bad for you.

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  • Amir chaudhry
    Mar 21, 2012 - 8:22PM

    @Meekal Ahmed: Can you please also tell us how much addition in GDP can happen when the factories in faisalabad, Lahore,karachi, Gujranwala and Sialkot etc will produce with uninterrupted supply of gas and electricity. Get yourself a short course in economics please.

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  • Falcon
    Mar 21, 2012 - 9:11PM

    @BruteForce:
    First of all, there are conflicting reports published by different financial institutions for the projected growth rates of markets that use different assumptions. But many economists agree that based on our prior experience with Asian Tigers and Japan, sustained high growth rates are usually not possible because of over-heating of economies, declining savings rates and investment costs, and challenges in shifting in gears from export based economy to consumption based economy.
    Despite that, honestly I have bad wishes for my Indian brethren. My only concern was regarding your original comment. If you look at it closely, there is a strong condescending tone which is unfair. If you guys treat other nations like this on the on the initial rungs of success ladder, how will you treat nations like us (even if failed in your own terms) 50 years from now when you will be hopefully at the top of the world?

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  • Falcon
    Mar 21, 2012 - 9:29PM

    @Amir chaudhry:
    Sir Ji. I think you are being slightly unfair to Meekal Ahmed. What he has implied is that full-capacity can be achieved both ways, using import based energy or domestic energy generation. However, its costs will be different from national perspective. Furthermore, import based energy will be more expensive leading to higher input costs and would depress exports competitiveness vis-a-vis internal cheaper source.

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  • Mar 21, 2012 - 9:35PM

    @Falcon:

    They are not conflicting reports. The trend is unmistakable.

    India has the potential to be the BIGGEST economy in the World. Thats a fact. Pakistan doesn’t. Thats a fact too. How is that condescending?

    Does that mean all smaller economies are meaningless and have I ever suggested that?

    Stop reading too much into what I said. I merely said on a global ladder India and Pakistan are at different levels owing to their Economic potential. The End.

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  • A Tanoli
    Mar 22, 2012 - 12:37AM

    @Bruite force,
    i was reading other day the famous The Times of india and they published report which is congress govt gives to suprem court and says that indians are getting out of poverty and shows peoples who are getting out poverty are making 832 Rupees a month what u think amazing right. may be india is becoming a shooper power.

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  • Meekal Ahmed
    Mar 22, 2012 - 1:34AM

    @Amir chaudhry:

    I agree that alleviating the energy crisis will lead to more production.

    But will it lead to more exports? Will the extra imports finance itself?

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  • Amir chaudhry
    Mar 22, 2012 - 10:13AM

    @Meekal Ahmed: All countries meet their requirements through a mix of internal and external sources to keep moving the wheel of economy. If you don’t have it you just buy it as simple as Japan, Europe and USA are doing. Your comment was misplaced and could wait for an article on inefficiency in ogdc.

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  • Mar 22, 2012 - 8:58PM

    @A Tanoli:

    I’ve never quoted Govt figures. I’ve always relied upon UN ones. UN says in its MDG report that poverty in India will reduce to 22% by 2015, which is only 3 years away.

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  • Kalabairava
    Mar 23, 2012 - 4:53PM

    @bruteforce, it is meaningless to harp on future forgetting today. all those articles are based on the fact that we will get so many things right. Like our political system, corruption etc. As an Indian, i feel so pity to call pakistan or any other country a failed state. Falcon seems to be the lone pakistani that seems to have a head on his shoulders. If you want to undertand about pakistanis please read the articles of Haroon raza. It makes me laugh.

    Yes pakistan is struggling, but that is their problem. Have we got anything to help them? then we will. Otherwise we do our work. We have just 30 years left to become a superpower!!!

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  • RAHUL
    Mar 24, 2012 - 12:04AM

    @BruteForce:

    India is on the rise with great potential and may well one day become a great power. But showing arrogance to small neighbors somehow tarnishes our image.

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