Unwarranted objections

THERE seems to be no change in the American opposition to the Iran-Pakistan-India gas pipeline project. The latest to voice American concerns over the proposed pipeline that will carry Iranian gas across Pakistan to India is a State Department official dealing with energy. Testifying before the Senate foreign relations committee, Mr Anthony Wayne, Assistant Secretary for Business and Economic Affairs, also expressed reservations about certain energy deals China is making. His criticism of India’s participation in the three- nation project comes within a week of the signing of an agreement on nuclear cooperation with India. Under the deal, the US would give India nuclear technology in disregard of the understanding with the Nuclear Suppliers’ Group. Mr Wayne told the Senate committee that the deal on the Iranian gas pipeline was against both the US laws and policy. Washington has been saying the same thing to Pakistan and pressuring it to cancel the project.

The four-billion dollar project is of significant benefit to all the three countries. While India will get energy for its expanding needs, Pakistan will get both gas and a hefty royalty. Until recently India disregarded American objections and seemed keen on going ahead with the pipeline project. However, the Indian prime minister’s visit to Washington earlier this month seemed to indicate a weakening of that resolve. Speaking to the Washington Post, Dr Manmohan Singh said that the project had “many risks”, because there were “uncertainties” in the Iranian situation. What those uncertainties were he did not spell out, but evidently he was referring to the implications of a hard-liner, Mr Mahmoud Ahmadinejad, coming to power in last month’s presidential election. There are fears that Mr Ahmadinejad’s victory could further harden the American attitude towards Iran and might lead to developments threatening peace and security in the region. After Dr Manmohan’s return home, there have been mixed signals from New Delhi, with Oil Minister Mani Shankar Aiyar hinting, with reservations, that India may after all decide to go ahead with the project. Pakistan’s stand on the issue is clear, for it sees Mr Ahmadinejad’s electoral victory as Iran’s internal matter that is unlikely to affect the pipeline deal.

Energy is the Bush administration’s obsession. It has a very strong energy lobby which played a key role in imposing war on Iraq and believes in maintaining America’s monopoly over world energy production and trade. During his speech to the Senate body, Mr Wayne criticized China for its energy deal with Sudan and accused Beijing of accepting terms which would not be commercially viable for western oil countries. The objection looks bizarre in these times of globalization and free market, for any two countries should be free to enter into any trade deals they want to. It is Washington that should conform to the demands of globalization rather than stick to unilateralism. Whether it is the disregarded of the Kyoto protocol, or the refusal to go with the world on land mines or the international military tribunal, the Republican administration has been on a solo flight. The biggest manifestation of its contempt for the world community was its decision to bypass the UN and attack Iraq. The gas pipeline concerns three countries, all of which hope to benefit from it economically without hurting anyone else’s interests. If America has any problems with Iran, it should try to resolve them peacefully, instead of persisting in a policy of political and economic isolation of that country.

Carmakers’ unfair demand

THE car manufacturers’ plea to the ministry of commerce to review a recently announced decision to liberalize automobile imports appears unfair. A few days ago, as part of the new trade policy for 2005-06, the ministry had announced that the age-restriction for automobile imports was being increased from two to three years. This was seen as a positive move because it would give car buyers a cheaper alternative to buying over-priced cars produced by domestic manufacturers. In fact, the problems faced by many car buyers is not restricted to paying excessive prices alone but also having to pay in full and then being made to wait for several months for delivery to be made, or purchasing a car from showroom dealers on payment of a hefty premium. The commerce ministry’s decision would also help break, to some extent, the stranglehold of the domestic car manufacturers over the lucrative automobile market and provide car buyers a cheaper alternative.

In this context, domestic car makers in letters to the commerce minister, have taken the plea that the decision to increase the age of imported cars will hurt the local industry’s legitimate interests. The truth is that domestic car manufacturers have been benefiting all these years as a result of protection against car imports. Thanks to an economic turnaround, ready availability of car financing loans and as a result of their own cartelization, the manufacturers have reaped a rich harvest. Moreover, the protection given to the industry has been around for a number of years and it is only now that tariffs on imported cars have been lowered. In any case, the reason for protecting local industry is that eventually it will develop and mature, reduce its costs and be in a position to compete with imported cars. Instead of demanding ever more concessions from the government, the car manufacturers would do well to cut prices and speed up delivery times for booked vehicles. The commerce ministry must reject the carmakers’ demand because acceding to it would reverse whatever little relief the government has so far provided to car buyers.

After the floods

ONE would like to know more about the comprehensive plan that NWFP Chief Minister Akram Khan Durrani says his government has drawn up to tackle the flood situation in the province. This year’s inundation has been particularly bad as thousands of families living near the Kabul and Swat rivers have been uprooted, their homes washed away and their means of livelihood seriously affected as water inundated their land destroying the crops. Communications have been badly disrupted and disease spreads among the affected communities as a number of cases of gastroenteritis and other ailments have been reported. What is distressing is that the authorities had ample warning of the inevitable consequences of the heavy snowfalls witnessed earlier on, but chose to do little about it, despite being witness to the misery of the people in the north last winter. One hopes that this apathetic attitude is not reflected in the plan that the minister mentioned, and that the recommendations are both practical and effective.

Unfortunately, it is only after a particular occurrence that the authorities wake up to the possible after-effects and mobilize their resources to rehabilitate the affected areas and knock on the doors of international donors. They would be saving themselves a lot of costs and efforts by concentrating on developing a viable flood control strategy and an effective early warning system. This is not to diminish the importance of coping with the present disaster, but to point out that the damage can be limited if preventive measures are in place in populated areas along riverbeds, and that are most prone to flooding. Building embankments, dams, etc, to regulate and channel the flow of water, and ensuring an effective early warning system may be an expensive process, but the results would be long-lasting, and a permanent strategy, aiming to reduce the overall financial and human cost of flooding.