Saturday, October 06, 2007

Pipeline of Peace..

What better way of commemorating Bhagat Singh’s birth centenary than to make further strides in peace and diplomacy among nations in South Asia? That is the question that strikes someone who is inspired by Bhagat Singh’s enduring legacy in the Subcontinent. Bhagat Singh was a revolutionary who envisaged a different world, and it is a different world indeed where conflict, violence and the ruling classes’ writ alone does not determine the contours of the toiling and common people’s economic choices.

For years, the South Asian region has gone through ferment, even as its inhabitants have yearned for better people-to-people contact, transcending of boundaries and for the ability to make their own choices over their destiny. But political differences have sustained and endured, creating complication after complication, making peace a cul de sac.

International relations theory, however, has an answer, groomed and tested in empiricism and history. The use of liberal institutionalism and the predominance of economics over politics has had sanguinary effects more often than less, and has brought order in times of pell-mell. Thus if one uses the value of economic relations, it makes it much easier to overcome political differences and the flickering light at the end of the tunnel seems much brighter.
It is in this regard that the proposed gas pipeline between Iran and India, transited through Pakistan, has a potential that transcends mere commercial value and emphasises a change in geo-strategic relations. Unsurprisingly, the force that resists this deal and its legitimising value for the nations involved is the US, which sees any leeway to and inter-state engagement with Iran, even for simple commercial value, as anathema to its grand plan for west Asia.

The gas pipeline from Iran to India was a proposal mooted by the Indian Oil Corporation (IOC) director, Dr R K Pachauri and former Iran deputy foreign minister Ali Shams Ardekani. The snowball of a proposal rolled on, took shape and soon the concept was welcomed by many for the benefits were huge. Iran was conscious that a new supply route from its gas fields could open up not only economic vistas, but also greater geostrategic potential. India and Pakistan, having high domestic demand for energy, have a relatively cheap and enduring source. The South Asian watchers are thrilled, because at last there is the strength of economic rationality weighing heavy over political units.

What is the Iran-Pakistan-India (IPI) gas pipeline all about? It is a 2,700 km long gas transport pipeline from the gas-surplus Iran fields, through Pakistan, and eventually to India through the western corridor. Natural gas is a cheap and a relatively clean source of energy as compared to other fossil fuel-based sources. Several project estimates and feasibility studies have pointed out that the project has tremendous commercial value, once implemented. These studies envisage that the costs of implementation are reasonable, and that the project itself is extremely viable.

As such, a few bottlenecks have cropped up vis-à-vis the project. Some have got to do with the feasibility levels, some to do with minor pricing irritants, but the major one has got to do with the geo-political nature of the deal. At the feasibility level, analysts are worried about disruption of the pipeline by extremist activity and the usage of the pipeline as a tool for making terrorist political statements. The financial worry of sabotage is alleviated by the fact that several modes of risk underwriting by international financial consortiums exist, any of which can provide money-back guarantees in case of sabotage. The political worry is addressed through a counterpoint: here is a chance to act on extremism more decisively, as rational choice determines that financial losses cannot be tolerated. Therefore, there is a strong financial incentive to act on extremism, even as the extremists themselves would realise that demand-fulfilling projects such as these cannot be a target for sabotage, as the stakeholders are common people.

The current phase of negotiations between Iran, India and Pakistan have been meandering into price irritants territory off and on. India and Pakistan are yet to resolve the transit fee issue, Iran is yet to accept the price review timeline that Pakistan and India favourably agree on and so on. Recently, India refused to take part in a tripartite meeting in Tehran, citing the non-resolution of the transit fee issue. However, these irritants are not deal-breakers and the advanced nature of financial economics can deal with these suitably. Important steps such as the determination of where would each country’s responsibility lie for the pipeline constructions, etc., have been made.

The overweening concern is geo-political. The US has stated its displeasure with the project and has advised India to prefer the Turkmenistan sourced pipeline. The US realises that the gas pipeline has a potential that could enhance the geo-strategic strength of Iran commensurately in the region. The Russian example of ‘gas diplomacy’ is there for all to see and the US realises as much as the others how gas supply can strengthen the influence and power of a country in the comity of nations. Russia’s influence in the European region has been greatly increased due to its gas supply and the dependence of downstream European countries on Russian gas.

The US insists on isolating Iran, as it brackets Iran into the “axis of evil” and it clearly does not want Iran to get out of the rut that it wants the country to be squeezed into. Simply put, the pipeline cuts into the hegemonic interests of the US in the region. Some would affirm that the Indo-US nuclear deal was a carrot dangled to India to drop the pipeline project, as the US re-enacts new scenarios in its great South-Central Asian game to retain hegemony. India’s relatively lukewarm reaction to the pipeline deal has instigated experts to argue that there is a heavy pressure from the US to scuttle the deal. In 2005, during a visit to the US, the Indian Prime Minister Manmohan Singh rather curiously attributed a problem with risk underwriting of the project to international bankers, even while the project was in its concept stage. There have been statements from the US Secretary of State, Condoleezza Rice, suggesting nuclear energy to be more viable as compared to natural gas sourcing. Long time politics-watchers of the Subcontinent have suggested that the US does not quite look at the deal positively, as it sees a reduced “offshore balancing” role for itself if the deal is consummated.

It is here that Bhagat Singh’s legacy needs to be readdressed. Seen in the people’s interests, the deal is a clincher, as it affirms a cheap source of fuel and has the potential to revitalise people-to-people contacts in the region by wrecking the boulders of political differences that stand between the nations, particularly India and Pakistan. Hegemonic interests of a distant imperia cannot and must not impose their will over such a project and these impositions must be resisted. India, Pakistan and Iran must continue to work hard to overcome the minor irritants that have popped up on the pricing issues. The people of the Subcontinent owe it to themselves to ensure that the pipeline project is through and is implemented. They owe it to Bhagat Singh on his birth centenary and to his personal sacrifice that he made as a statement against imperialism.

The writer, trained in engineering and in political science, works with the editorial team at Economic and Political Weekly, and is an avid follower of sports, political economy and the performing arts


Vinod_Sharma said...

I wonder why many of our analaysts view the proposed pipeline from Iran through Pakistan as a great project for India just because it is a bad one for American strategic interests!

The Americans may be a bit paranoid from our point of view, but even the strongest power in the world does not take its security for granted and is always striving to nip any likely future threat in the bud. We, on the other hand,revel in allowing others to ride rough for decades, like Pakistan has done through terror and Bangladesh is doing too on a smaller scale through giving sanctuary to the North East insurgents without any fear or regard for the country without whose help it would not have come into existence.

I do not think any pipeline coming through Pakistan serves India's energy and security interests. Pakistan is not letting up on its export of terror at all. While we must talk to them and try to improve our relations, let us not be naive enough to believe even for an instant that they are no longer a threat, and that they can be trusted to ensure uninterrupted supply of gas. They will disrupt supplies at a critical moment and blame 'terrorists' for it.

What is pressing need to take any chance, except to pretend that we are against US hegemony?

Srini said...

There are two ways of solving a problem..

a) Pretending it is never going to get solved and try never get to the root of it and let it fester..

b) Doing something about it.

I prefer b).

Liberal institutionalism has helped tide over political conflicts. Case in Point: France v Germany ..circa 1946..end of World War II.. 1950s: formation of EEC...2007 (today): Who is talking of Franco-German political discord??

Pakistan is a neighbour and it is better for India if the problems in Pakistan are sorted out. that means that the economy is better and progressing, which means that the extremists don't get a chance to catch public imagination.

The Pipeline deal is one way of doing that.

And mind you, despite Indo-Pak conflict over the years, the Indus Water Sharing Treaty has been intact between the nations and has never quite been broken.

Vinod_Sharma said...

We all can selectively quote events which have been solved in line with our premises.

Doing something about solving an existing problem is what all nations engage in all the time; though a few(like Pakistan) specialize in inventing new problems!

The pipeline is certainly no way of solving it...may be after a war, when Pakistan is defeated like Germany was in the Second World War.
Pakistan has agreed to the pipeline over its pathological hatred for India because it makes the project economically viable for its own requirements and , more importantly, leaves control over flow of gas to India in its hands, a serious strategic advantage. If you recall, during 2000 I think,India applied the screws on Pakistan by banning all Pakistani overflights over Indian territory. Surely it will be foolhardy to give a similar lever to Pakistan.

The Indus water treaty has survived only because the controls are in Indian territory.If they had been with Pakistan, no intelligence is needed to imagine what it would have done.

If you have the time, do read my perspective about the dangers posed by Pakistan to India and the world in my blog. You will find them spread over a couple of posts.

Mahesh Panicker. said...

in an ideal world, the whole project would have been the best thing. however sadly, we are not living in an ideal world, and in no circumstances, one can say with any sort of conviction that the relations with Pak are anywhere near normal. even Iran, for that matter in terms of strategic relation can't be the best partnor in such a deal, as their nuclear and other weapon programs are guided by Pakistan, which in tern has got all the technology from China. in that context the proposed project should remain in the pipeline only.

SundayThots said...

>> even as the extremists themselves would realise that demand-fulfilling projects such as these cannot be a target for sabotage, as the stakeholders are common people.

You really believe that even despite hundreds of terrorist bombings in markets, trains, etc ?

I am afraid you are being rather naive about Pakistan and its extremism. I don't see the IPI happening till Pakistan gets some sort of normalcy and retains that for 3-4 years at least.

Srinivasan Ramani said...

Have you ever seen a map of Pakistan? The IPI pipeline was supposed to pass through Balochistan (adjoining Iran). Is there any specific opposition to the pipeline (which should pour in money for tribes in the area) in the region? Who is being naive and half-educated?