Pakistan is suffering from an acute energy shortage and the pipeline is precisely what its economy needs to kickstart it from its currently low level of GDP growth. PHOTO: AFP/FILE
The history of the gas pipeline between Iran and Pakistan — and India at one point — is long and much troubled. Iran has gas aplenty that it needs to sell to offset the damage being done by sanctions; in a world made up of level playing fields, it would readily do so. But Uncle Sam likes playing fields surfaced to his satisfaction and has made it known that were the project to go ahead, it would attract sanctions on Pakistan. Prime Minister Nawaz Sharif and the Iranian President, Hassan Rouhani, now appear to have grasped the nettle and agreed to continue with the Iran-Pakistan gas pipeline as it would be of benefit to both countries. In a further significant development, Iran has agreed to waive the penalty clause under which Pakistan is bound to pay $200 million a month for not meeting the gas pipeline deadline of December 31, 2014.
A cautious welcome to this refreshing of the accord between our two countries is appropriate. We share a number of common interests. Teams from the interior ministry, the finance ministry and the petroleum ministry are all there with a common purpose — to resolve those matters that are a hindrance to the project. However, the Iranian waiver of the swingeing penalty is only operative if our government shows ‘seriousness’ about the project, i.e. — we start building our section of the pipeline. This is going to be a difficult balancing act. The thawing of relations between the US and Iran are far from being complete. There is still a lot of luggage unclaimed in Pak-US relations, stuck on the diplomatic carousel.
Pakistan has every right to shape its own foreign policy and develop its own regional relationships to the mutual satisfaction of itself and its neighbours. After all, the country suffers from an acute energy shortage and the pipeline is precisely what its economy needs to kickstart it from its currently low level of GDP growth. The US is in the process of pivoting Pacific-wards in the coming years, while the Afghan drawdown is almost complete. The Iran-Pakistan pipeline may not suit America but America does not live here — we do. It is time for Pakistan to be a little less timorous and a little more assertive in determining its foreign policy. Do the deal, Mr Prime Minister.
Published in The Express Tribune, May 14th, 2014.
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COMMENTS (8)
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Be nice to know how much the IP will cost - how your going to protect it and what that costs - where you going to find someone to finance it and how much that's going to cost - how much Iranian gas cost and how that compares to market rates - and how do all those cost stack up to alternatives such LNG. That's pretty basic stuff but nobody has bothered to pull together all the pieces (including the Editor) Also - last time I looked you didn't have enough money to purchase gas to keep your current power plants functioning at capacity ... so how does a pipeline fix that? . Lastly - be nice if someone figured out the possible ramifications of USA imposing sanctions - being broke, unemployed and sitting in the dark may diminish the initial rush gained by a quick chest thumping emotional decision. Maybe you should ask yourselves why China and Russia are concerned about sanctions .. or better yet ask the Iranians whether sanctions hurt.
@unbelievable: "Like all Pakistani chest thumping the only thing that you get is a sore chest." +++++++++++++++++++++++++++++++++++++ I disagree with you Sir. Pakistan defeated India in all the wars including Kargil....the last one despite US opposition. Pakistan Paaendabad!
Both the Peoples Party and Muslim League have shown utter ineptness when it comes to the Iran Pak pipeline .India was smart ,it negotiated a private deal with the USA to get enriched Uranium as payment for abandoning the pipeline .
Long on chest thumping emotion and short on logic. Inviting sanctions from your largest export customer and the one country that effectively can veto loans from IMF, WB, ADB and just about every other source of funding that Pakistan needs to survive. Promoting the IP while your leverage with the USA is at an all time low makes no sense what so ever. Like all Pakistani chest thumping the only thing that you get is a sore chest.
Teams from the interior ministry, the finance ministry and the petroleum ministry are all there with a common purpose "" +++++++++++++++++++++++++++++++++++++++++ And what is missing is the FO..........but of course they are completely irrelevant.
"New life for the gas pipeline" +++++++++++++++++ But the patient is still in the ICU,
Pakistan has every right to shape its own foreign policy "" +++++++++++++++++++++++++ Yes but that can be done only if 1.5 Bn dole are not accepted from Saudi and Multi Billion handouts from US under the CSF.
Excellent article, yes tell your leadership, have some backbone, and do something for the country first for once and improve relations with Iran.