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THE Iran-Pakistan pipeline is back in the headlines for all the wrong reasons. Islamabad and Tehran have signed an agreement to press ahead with the project and Tadbir Energy has offered a $500m loan to help Pakistan manage the cost of construction.
But with this agreement have come renewed threats of sanctions from the US, which opposes an injection of foreign exchange into the Iranian economy at a time when the West is squeezing Iran to choke its nuclear weapons programme.
In a perfect world, Pakistan would forge ahead with this pipeline. The country’s devastating energy shortages cause an annual loss of three to four per cent of GDP and, by some estimates, have increased unemployment by 10 per cent. The pipeline could help address Pakistan’s 5,000 megawatts per day energy shortfall by supporting about 4,000MW of daily power generation. Moreover, the construction and running of the pipeline could boost employment opportunities in Balochistan and in the long run help generate more revenues for the chronically underdeveloped province.
The pipeline would also help Pakistan pursue an independent foreign policy, rather than base all decisions around the contours of its relationships with China and the US. The ability to prioritise domestic concerns is a strong sign of political maturity and stability.
For all its flaws, the IP pipeline project is also more feasible than the proposed Tapi pipeline, which the US is pushing as the preferred alternative despite the poor security situation in Afghanistan. And like Tapi, the IP pipeline has the potential to boost regional integration via energy sharing at some future point.
India withdrew from the project in 2008 following an agreement with the US aimed at keeping Iran out of Asia’s energy markets. But if the US ends its programme of sanctions against Iran, Delhi may yet agree to the construction of another leg of the pipeline from Multan to the Indian capital.
Given that Western opinion is turning against sanctioning rogue nations — the argument is that sanctions induce paranoia and anti-West sentiment within populations, thereby reinforcing commitments to obtain weapons of mass destruction — such a shift is not inconceivable. At a time of soaring sectarian strife within the country, Pakistan should also maintain good diplomatic and trade ties with Iran. Islamabad cannot let the country become a proxy battleground in the sectarian showdown across the Muslim world.
Pakistan needs a multi-pronged strategy to stem sectarian violence, which includes strengthening secular education, cutting off funds from the Middle East for Sunni extremist groups and welfare organisations, dismantling militant groups, and launching a communications strategy to promote tolerance. But one prong of that strategy is maintaining close relations with Iran so that there is no danger of Pakistan being seen as taking sides in the sectarian power tussle. Islamabad will also have to work with Tehran to prevent the radicalisation of Pakistan’s Shia population in the face of increasing persecution and violence.
Lastly, in this perfect world, US sanctions against Pakistan for constructing the pipeline would not be too severe. The Foreign Office claims the pipeline would not violate UN sanctions against Iran. Islamabad is also gambling that the US won’t come down too hard on Pakistan because of its growing cooperation in the Afghanistan endgame. And seeing as China and India continue to purchase Iranian oil, Pakistan could wiggle through the same loopholes.
But this is not a perfect world. Many believe the pipeline will never actually come into existence: it is simply part of a pre-election stunt that allows the PPP government to seem as if it’s being proactive in terms of addressing the energy crisis, on which its record thus far has been appalling. The deal with Iran also allows the PPP to seem defiant in the face of US heavy-handedness, a clever move given the rabidly anti-American sentiments of the electorate, and especially after five years of the party being accused of pandering to Washington’s whims.
The problem with pre-election stunts is that they are often shelved the moment elections are successfully contested. And that is especially true in this case since Pakistan can’t afford to build the pipeline. Sadly, this counterproductive stunt will distract from more viable domestic measures to address the energy crisis, including reducing energy theft, improving infrastructure to prevent inefficiencies and developing Pakistan’s local gas fields.
In light of the worsening security situation in Balochistan, the IP pipeline seems unfeasible for the same reasons as Tapi. Sunni extremist groups have become entrenched in the province, which analysts suggest is emerging as the main Iran-Saudi battleground within Pakistan. If that’s true, Sunni militant groups might seek to undermine a project that would emerge as the mainstay of bilateral relations between Iran and Pakistan by targeting anyone involved (this would be in addition to Baloch separatist groups that target state infrastructure, including energy installations).
The state’s response to the targeting of Hazaras has demonstrated what little writ the government still has in Balochistan and highlighted the levels of incompetence or fear within the intelligence agencies and security forces tasked with maintaining security in the province. Such an environment is not conducive to a major construction project, and that too one with geopolitical and sectarian dimensions.
Finally, Pakistan can’t be sure that the US won’t impose tough sanctions, which could lead to a reorientation of US-Pakistan relations from engagement to isolation, with Washington simultaneously taking a zero-tolerance stance against Pakistani militancy.
In response, Pakistan would likely take on a spoiler role in Afghanistan. Such policy shifts would undermine regional stability and forever snuff out the possibility of Islamabad and Washington having anything more than a transactional relationship. In this context, the pipeline is likely to remain a pipe dream.
The writer is a freelance journalist.
