Daily Times

When India exited the Iran-Pakistan-India pipeline deal back in 2009, the two remaining parties vowed that the show would go on. Yet fast-forward to today and Tehran could well haul Islamabad before the international court of arbitration at The Hague. Where did it all go so wrong?

Back in the day, the so-called peace pipeline was hailed as a harbinger of improved bilateral relations between the two, which would, in turn, mitigate many of Pakistan’s energy shortfall woes. Yet here we are some eight years later and it has come blatantly clear that this opportunity has been wasted due to inaction; not to mention the PML-N government’s failure to think outside of its Saudi diplomatic box. As a result, it is not only Tehran that is furious with Islamabad, but also our new Chinese overlords.

While the Nawaz Sharif government had expressed eagerness about completing this project in 2013, it instead decided to shelve it in favour of the $1.6 billion Gwadar-Nawabshah LNG Terminal and Pipeline project. It had said that this 700-kilometre pipeline would be funded by Beijing and that once sanctions on Iran were lifted it would extended all the way to that country before being renamed the Iran-Pakistan (IP) gas pipeline. It was this proposal that had initially stopped Tehran from squeezing $1 million a day from this country from January 1, 2015.

By September 2017, Tehran had started to express irritation over the fact that no delegation had arrived in Iran from Islamabad to review the Gas Sales and Purchase Agreement (GSPA). China had also become vexed by then, as it had already finalised an agreement with Pakistan to build the Gwadar-Nawabshah pipeline. This, along with allegations of CPEC corruption, does not bode well for the Sino-Pak relationship.

The political set-up, for its part, has offered inconsistent explanations as to why the project has remained in limbo for so long. There have, of course, been whispers of the pipeline being shelved due to pressure from an “important Gulf country”. Naturally, the government has denied this, claiming that the delay was because of difficulties in acquiring funding stemming from the sanctions placed on Iran by the US and UN. Later, this stance was changed when the then Federal Minister for Petroleum and Natural resources — who today holds the portfolio of Prime Minister — said the venture had been postponed because the Centre wanted to encourage the private sector to invest in imported LNG.

As a result, Iran has threatened to drag Pakistan to The Hague so it can extract $1.2 billion from Pakistan under the 2009 agreement’s penalty clause. This has happened at a time when this country is already under pressure to repay $6 billion in debt.

Despite all this, the Foreign Office continues to claim that the IP pipeline project is still on. Reportedly, the government plans to appease Iran with a new gas venture. However, it is doubtful that we will be able to woo our regional allies now.

Going forward, Islamabad must remember that no alliances in the global arena are permanent. While Saudi Arabia, Iran’s arch rival, may have been a natural partner for Pakistan due to the large diaspora residing in that country, this will not last forever. Indeed, the Kingdom has already realised that its economy cannot rely on immigrants forever; as evidenced by the deportation of 39,000 Pakistanis between October 2017 and February 2018. As such, our foreign policy must adapt to meet the needs of the future. Perhaps those that the helm should look to India, which has managed to cultivate relations with both Iran and long-time nemesis, Israel.  *

Published in Daily Times, March 3^rd 2018.