Pakistan Iran Relations – US involvement IPI

Introduction
Pakistan is currently in negotiations with Iran to build a pipeline that would carry gas rom Iran to Pakistan. Pakistan historically shares a very close relationship with Iran. There was a brief hiccup in relations during the 90’s when Iran supported the Northern lliance in Afghanistan and Pakistan supported the Taliban. But overall, relations improved during the Musharraf era after the fall of Taliban and several MOU’s were signed between both these nations to improve relations. Due to Pakistan’s acute energy hortages, it has been looking to import gas from Iran. The plan was envisioned in the 1990’s where Iran would supply gas to both Pakistan and India through a pipeline. But due to the pressure from severe pressure from the US, the project has been stalled as the US looks to squeeze Iran economically. It is in Pakistan’s interest that this project is completed in time as it will help Pakistan to solve this major energy crisis.Pakistan at present is in desperate need of gas. As Pakistan’s domestic gas reserves are being dried up and are likely to only last till 2030, it is imperative for Pakistan to import energy from an external sources at the cheapest rate possible. This is why this pipeline gained traction as it has the potential to ease Pakistan’s energy crisis. Agreements were signed and Iran has completed the construction of the pipeline on its side of the border. It is from Pakistan’s side of the border where the project has stalled and the pipeline has not been built. The reason why this project has run into trouble is because of American pressure. As the US is bent on squeezing Iran economically due to Iran’s nuclear program, it is pressuring both India and Pakistan to back out of this project. India has already backed out of the project as the US has offered a carrot to India in the form of a civilian nuclear fuel deal, while it has not offered Pakistan the same privilege. Pakistan continues to suffer from an energy crunch and has a deficit of 5000 megawatts. The delay of this project will only make Pakistan’s economic problems worse, thus it is essential for Pakistan to finish this project as early as possible.

Implications for Pakistan
• It will help ease Pakistan’s energy crunch in the short term and it will allow Pakistan to have a stable energy supplier for the long term

• US will likely implement financial sanctions on Pakistan as Iran has been excluded from international banking system

• Relations between Iran and Pakistan will further improve which can turn into a strategic partnership in the future

• Pakistan’s economic problems will ease as the power companies would be able to generate more electricity through gas

• There will be political stability inside Pakistan as load shedding has invited riots and mob attacks

• Pakistan will have diversified her energy sources to improve energy security

Recommendations
Pakistan needs to follow a pragmatic approach and needs to bring international support for this project. Pakistan cannot ignore the fact that the US is a superpower and American sanctions can have a devastating effect on Pakistan’s economy. Thus Pakistan should implement the following steps to safeguard its interests

• Initiate a system of barter trade with Iran. Instead of wasting precious foreign currency to purchase Iranian gas, Pakistan can trade gas with medical equipment, medicine, food, fertilizer and other consumer goods. Pakistan would be able to convince the international community that these goods are not aiding Iran’s nuclear program and only consumer goods are being traded with Iran.

• Pakistan needs to bring the Russian State Owned Energy Giant Gazprom on board. Russian involvement In the project would shield Pakistan from international scrutiny as Russia is a Great Power and is a member of the Security Council in UN.

• China has shown interest in joining the project. Pakistan needs to convince China that this project will be in the interest of China as it will provide China with energy security. Feasibility studies should immediately be initiated to see if this project would be feasible for China or not.

Conclusion:
In conclusion, work on this project should be immediately initialized. Pakistan is going through a severe energy crisis right now and the delaying of this project would make the energy crisis even worse. Introduction of China and Russia in this pipeline would make this project even stronger as both these nations are members of the Security Council and also bring a lot of resources to the table. US has pressured Pakistan to back off this project but has failed to offer Pakistan with any viable lternative. Energy is a prerequisite for economic growth, this pipeline is essential for Pakistan to turn its lackluster economic performance into massive growth. Pakistan should make it clear to the international community that Pakistan only wants to engage in civil commercial transaction with Iran and has no interest in Iran’s nuclear program.