Pakistan Iran gas pipeline politics

By Faheem Belharvi

Despite bitter opposition from the US and warnings of economic sanctions, Pakistani President Asif Ali Zardari and Iranian President Mahmoud Ahmedinijad on 11 March 2013 officially inaugurated construction work of a delayed $7.5 billion gas pipeline. The ceremony, which the President’s office described as a ‘big event’, was held in the Iranian border city of Chabahar. Both Presidents were accompanied at the ground-breaking by delegations comprising ministers, top officials as well as representatives of several Arab states.

Pak Iran gas pipeline is one of the important historic deals of the world especially in Pak and Iran horizons. The project will bring economic prosperity and opens new avenues of relationship between both the countries. Basically, Pakistan is energy stricken country and its growing economy failed to generate revenue requirements. Hence, it is need and necessity of the time to import cheap energy from neighboring country Iran in order to meet energy requirements and lessen our debt burden. The pipeline project will prove to be as the permanent energy bailout package for our energy deficiency.

The other impacts of this project could be; opening up new avenues of economic prosperity, extends business, commerce and trade activities and enhancing cultural relations with a country that has contributed so much, to our history, languages, literature, art and architecture. Meanwhile, tourism and sports activities will also increase which ultimately brings both countries closer.

Although the pipeline projects formal completion date is December 2014, a detailed feasibility plan is still being worked out and the source of funding is yet unclear. In July 2011, President Ahmadinejad has offered to fund construction of the 761 kilometers inside Pakistani territory. Iran declared at the time that it had laid the pipeline on its side to within 50 kilometers of Pakistans border. But the Iranian offer has to be taken with a good meanwhile, Irans economic difficulties are rapidly mounting. Chinas largest bank, the Industrial and Commercial Bank of China, has backed out from its earlier commitment.

In June of that year, members of the opposition benches in the Balochistan Assembly exhibited unprecedented unity and passed a resolution seeking royalty for the province in the proposed multi-billion dollar IP gas pipeline project. Further, the assembly also demanded Balochistan`s representation in the IP talks, free gas for adjacent populations, a 100 per cent job share and a major share in any royalty. It is added that, there is no constitutional or legal guarantee that royalty in any form, including security, jobs or gas, will be supplied to the people of Balochistan.

Islamabad cannot deny the fact that Balochistan represents 44 per cent of the country`s landmass and shares strategically significant coasts and border areas with the energy-rich Middle East, through Iran.

Pakistan took a firm stand on the issue. In this regard last week, Foreign Minister Hina Rabbani Khar, addressing a joint press conference with her Swedish counterpart, said that Pakistan was committed to the Iran-Pakistan gas pipeline. She also laid to rest any doubts that a Chinese bank’s decision to back off from funding the project would affect plans to import gas from Iran. She said: “There are multiple sources available and this is a very viable project.”

For Pakistan the IP gas pipeline project is its energy lifeline for the future as it will provide the cheapest and most suitable fuel for power generation. According to an estimate that, the gas to be supplied by Iran would help generate around 4,000MW of electricity, besides providing job opportunities in the backward areas of Baluchistan and Sindh.

Anyhow, US factor again mounted pressure on Islamabad to forego with the project, otherwise sanctions could be imposed on Pakistan. In this connection, Hillary Clinton said that the Turkmenistan pipeline was a better alternative, predictable and would avoid business with Iran and added that embarking on the construction of a Pak-Iran pipeline is in violation of the Iran Sanctions Act. She said, “We all know what the consequences of that law are.” Else the U.S shall isolate itself away from a goal that is truly important, the fight against global terrorism.

On March 7, another US Departments spokesperson, Victoria Nuland, spoke on the subject and said: The proposed deal will violate UN sanctions laws. She acknowledged that Pakistan has a lot of unmet energy requirements. The US, she added, was aware of these requirements and has been working in close partnership to find better ways to meet these needs.

But Pakistan totally rejected American stance since Iran-Pakistan pipeline project is vital to her flourishing economic and meeting future energy requirement.

Another factor which need serious attention that fast friend of Pakistan Saudi Arabia is not very pleased over the Pak-Iran project. The Saudi attempt to create divisions and distrust with a neighboring country is plainly insidious and deserved a response from Pakistans leaders one no less firm than the one delivered to the Americans. The Saudi plan is just as unworkable as the TAPI pipeline, which the US is pushing as an alternative to the IP pipeline. TAPI would run through Turkmenistan, Afghanistan, Pakistan and India. But with Afghanistan likely to be embroiled indefinitely in civil war after 2014, only a wild idealist can believe that a pipeline traversing its hostile and intractable terrain could provide secure oil supplies.

Let us hope the next elected national government would have to complete this Peace Pipeline Project with vision, will and capability to make up for the last decades and move fast to lift the society and the state to higher levels and scrupulously work for the development of the country development and welfare of the people. Iran-Pakistan gas pipeline can prove to be the starting point of a new era of peace and prosperity for the entire region. US and others opposing western countries should stop playing power politics with the developing and under developing countries in the name of nuclear proliferation . They should not forget US-India nuclear deal before yelling against Pak-Iran Gas Pipeline Project.

PEW terms pipeline development greatest achievement of the Government

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Wednesday said inauguration of Pakistani portion of Iran gas pipeline, economically and strategically crucial for the future of our country, is the greatest achievement of the incumbent Government.

This historic decision, taken after a long delay, will help attract investment, provide jobs, and revive sliding economy while it has renewed hopes among dejected masses and business community reeling under severe energy crisis, it said.

The decision shows that Pakistan has decided to put its own interests ahead of the interests of all other nations and it is unwilling to sacrifice economy for the sake of the sole super power which has helped government gain global admiration, said Dr. Murtaza Mughal, President PEW.

President Zardaris bold step will result in enhanced regional connectivity while balancing Pakistans relations with Iran and the Arab world to enhance our dignity among comity of nations, he added.

Dr. Murtaza Mughal said that slapping sanctions on Pakistan is against US interests, as it will have negative impact on war on terror and make US withdrawal from Afghanistan difficult.

He said that that American apathy towards Islamabads economic compulsions resulted in rapid developments related to the project, which have surprised many independent observers.

US continued to offer costly and unviable solutions to Pakistans energy problems including TAPI but it refused to sign a Civil Nuclear Agreement as she did with India which was discrimination with an important ally, Dr. Murtaza Mughal noted.

The decision will go a long way in ensuring energy security for Pakistan and improve our energy mix heavily tilted towards oil.

He warned that Iranian gas will of little use if government failed to introduce power sector reforms, attracted investment in exploration and cull circular debt.

Call for national debate on risks associated with pipeline project

Islamabad, MTT News Desk: The Islamabad Women’s Chamber of Commerce and Industry (IWCCI) on Friday called for a national debate on risks associated with the Iran pipeline project.

We doubt will and ability of the government to ensure import of natural gas from Iran through a controversial pipeline, said Farida Rashid, President IWCCI.

Government claims to relieve country of energy crisis by importing natural gas from Iran, the quickest and cheapest way to fulfil our energy needs, remained confined to statements over the years, she said.

Speaking to women entrepreneurs, she said that in December 2012, President Zardari unexpectedly cancelled a trip to Iran due to US opposition to the project but now government has been issuing statements of rejecting US pressure days before dissolution of assemblies.

She said that all the statements of politicians claiming to reject US pressure on pipeline from gas surplus Iran are aimed at gaining popularity as country remained ill prepared to face US confrontation.

What took government to become aware of the political and economic risks posed by chronic power and gas shortages after five years of rule, asked Farida Rashid.

Why government did not initiate the project soon after coming to power which would have disallowed energy issue to undermine the countrys stability, helped revive economy and saved millions of jobs, she questioned.

Farida Rashid said that US would never allow Iran to increase its presence and influence and boost foreign exchange reserves at a time when west has imposed tighter sanctions on Tehran even if it means crumbling Pakistans economy, a long-time American ally.

Government should clarify how it would deal with tough US sanctions when country is heading towards a default due to mismanagement and corruption, she said.

We are facing a highly unstable balance of payment situation, forex reserves are at unsatisfactory level and government is unable to pay for imports for over sixty days which necessitates entering into a stand-by agreement with IMF, she added.

President of the IWCCI called upon a national debate on pros and cons of the project at a time Pakistan needs an IMF loan of 9-10 billion dollar loan from the IMF which will be impossible without US nod, she said.

Farida Rashid said that we will never have reliable energy supply from Iran unless US stop looking at the project from a political angle and start considering it imperative for survival of Pakistan.

Govt’s will, ability to import Iran gas questioned

Islamabad, MTT News Desk: The Islamabad Women’s Chamber of Commerce and Industry (IWCCI) on Thursday voiced doubt over governments determination and ability to ensure import of Iranian gas through multi-billion-dollar pipeline.

Governments tall claims to relieve country of energy crisis by importing natural gas from Iran remained confined to statements for public consumption and they woke up to the issue days before assemblies are scheduled to be dissolved which has raised doubts among many, said Farida Rashid, President IWCCI.

She said that all the statements of leading politicians claiming to reject US pressure on pipeline are aimed at gaining popularity and add to the problems of the next government as Pakistan is ill prepared to afford US confrontation.

Why government did not initiate the project soon after coming to power which would have helped revive economy and why now everything is being done with an amazing speed, she questioned.

Farida Rashid said that US would never allow Iran to increase its presences, income and influence in the region. She do not want to see a stable Pakistan too, the president of the womens chamber added.

Many experts have rejected the tall claims of the government at a time when country is heading towards a default.

Pakistans balance of payment situation has become highly unstable, forex reserves are at unsatisfactory level while country cannot pay for imports for more than two months.

In such a situation when almost every sector of the economy is limping how can Pakistan avoid a minimum of 9-10 billion dollar loan from the IMF which can be provided only on the behest of US, said Farida Rashid.

Pakistan can never have reliable energy supply from Iran unless US stop looking at the project from a political angle and start considering it imperative for survival of Pakistan.

Farida said that handing over Gwadar port to China was a laudable decision that may have something to do with fresh wave of terror across the country.

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