Gas from Iran
From the Newspaper | Editorial |

AMERICA doesn`t seem to view the Pakistan-Iran gas deal as an economic issue linked to Islamabad`s desperate attempt to tackle the acute energy crisis. On Tuesday, the State Department appeared to be reminding Islamabad that the gas pipeline project would constitute a violation of the sanctions Washington has imposed on Tehran. Iran is already under several layers of UN and US sanctions, but Tuesday`s statement comes on the heels of another law, signed over the weekend by President Barack Obama, forbidding transactions with Iran`s central bank. The latest American position on the pipeline issue, we are ready to assume, doesn`t form part of the stand-off that has characterised US-Pakistan ties since the Salala attack that killed 24 Pakistani soldiers and soured a relationship that has been in decline since the Raymond Davis-Abbottabad affair last summer. On Dec 27, addressing a rally in Larkana on the anniversary of Benazir Bhutto`s assassination, President Asif Ali Zardari reiterated Pakistan`s resolve to go ahead with the deal with Iran.

The recent riots that rocked northern Pakistan are a small indication of the way the energy crisis is spinning out of control. Though the protests stemmed from the government policy on CNG, they are part of the larger energy crisis that includes the yawning gap between supply and demand in power production by means hydel and thermal, and the drain on Pakistan`s exchange reserves because of its dependence on oil imports. Obviously, Pakistan has itself to blame for the energy disaster because of its failure to plan and execute long-term projects. The water-hoarding capa-city of the Tarbela and Mangla dams has declined because of decades of silting, de-silting being costly, and this has led to a fall in power production. At the same time, oil and gas exploration in energy-rich Balochistan has come to a halt because of terrorism and lawlessness, and the Lakhra gas project has made no progress. With the Turkmenistan pipeline through Afghanistan still a pipe dream, gas from Iran is the only feasible alternative for Pakistan.

On Tuesday, the Economic Coordination Committee took a major step in this direction by approving a $200m sovereign guarantee for the Iran gas project and also agreed in principle to the appointment of an advisory consortium led by the Industrial and Commercial Bank of China. While Pakistan will have to pursue the move with speed and determination, Islamabad expects the US to look at the gas project as Pakistan`s economic issue and de-link it not only from Washington`s relationship with Iran but also from the mess in which US-Pakistan ties are mired today.

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