US tries to halt Iran-Pakistan pipeline
18 May 2012
In a country where temperatures can reach between 30-50 degrees centigrade, frequent power shortages that can last up to 12 hours have been the cause of widespread protests and anger against a government seen as too inept to deal with the situation. From emergency patients in hospitals to schools and businesses – their social and economic impact has been crippling.
This aspect of Pakistan’s troubled ‘power politics’ has placed the government in a difficult position – not just internally but also in regards to the country’s foreign relations.
Last month Prime Minister Yousaf Raza Gilani said Pakistan would be buying 1100 megawatts of electricity from Iran, as well as oil and gas. The two countries have been working for years towards building an Iran-Pakistan gas pipeline.
But the United States government has expressed its disapproval, warning the project could be in violation of the Iran Sanctions Act. Previously India was also a part of the pipeline project but pulled out in 2009 after the US made a nuclear deal with the country. The pressure on Pakistan, however, continues.
‘As we are ratcheting up pressure on Iran, it seems somewhat inexplicable that Pakistan would be trying to negotiate a pipeline,’ said US Secretary of State Hillary Clinton. ‘And there is an alternative that we do strongly support — the Turkmenistan-Afghanistan-Pakistan-India [TAPI] pipeline.’
The trouble with the latter is the unstable situation in Afghanistan and the fact it would take much longer to build since Pakistan’s power crisis is urgent. Despite this the Pakistani government is keen to go ahead with the TAPI project in addition to its commitments to Iran.
Hillary Clinton welcomed by Prime Minister of Pakistan Yousaf Raza Gillani at his house in 2009. Photo by America.gov under a CC Licence.
Recently the Indian cabinet gave its approval to sign a gas purchase agreement with Turkmenistan’s national oil firm. To add to the complexity of the situation, unnamed diplomatic sources in Islamabad claimed US ally Saudi Arabia also has made an offer to Pakistan to drop the gas pipeline deal with Iran in return for cheaper fuel.
But Iran has already built its side of the 2775 km pipeline, with construction still needing to be done in Pakistan. The estimated cost for this is placed at $1.5 billion. China’s largest bank and the world’s most valuable lender, the Industrial and Commercial Bank of China (ICBC), pulled out of financing the project in March after reportedly fearing sanctions from the US.
There are, however, other sources. Russian energy giant Gazprom has expressed interest in providing technical and financial assistance for the project. In this respect, Pakistan’s quest to build a gas pipeline from Iran holds the potential to turn into a bigger geopolitical showdown between the United States, China and Russia. Moscow in recent years has been silently moving closer to Islamabad.
For those familiar with politics in the region, this is a major policy shift following decades of hostility with the Soviets when the US and Pakistan were close allies. Later this year President Vladimir Putin is expected to travel to Pakistan, which would make him the first Russian President to visit the South Asian country.
Even more alarming for Washington has been Beijing’s interest in importing Iranian gas by potentially extending the pipeline project northwards to China.
US policy makers should realize that pushing Pakistan’s already weak government to reject energy dealings with Iran is not a diplomatically astute move. This is because coercion only leads to more resentment. Diplomacy, as the name suggests, should be about building relationships – not dictating to weaker countries. Just imagine the reaction if the Pakistani government were to lecture the US on its trade relations with Mexico or Canada?
Yet Secretary of State Clinton has warned the pipeline could violate sanctions against Iran.
‘It would be particularly damaging to Pakistan because their economy is already quite shaky,’ she said. ‘This additional pressure that the United States would be compelled to apply would further undermine their economic status.’
At the same time Pakistan’s Foreign Minister Hina Rabbani Khar insists her country will not give in to US pressure, and will finish the pipeline ‘at any cost.’ But some analysts believe it unlikely Islamabad will carry through with the project due to fear of incurring Washington’s ire.
The Pakistani state’s bombastic language may indeed just be a bargaining chip to use with the Americans for future foreign aid, and to appease local voters by pretending to make independent decisions.
Whatever the case, it’s clear that day by day this project is becoming bigger than just a trade venture. The complex challenges in building the gas pipeline between Pakistan and Iran demonstrate the sort of pressures countries in the Global South face in their daily struggle to be able to make their own decisions with dignity.