IPI Pipeline (without the extra I)

The Iran-Pakistan-India pipeline deal was finalised yesterday, albeit without India. This pipeline was touted as being extremely important to the region, bringing not only natural gas but also peace to the subcontinent. But for the moment, only Iran and Pakistan have signed the export deal.

The idea for this pipeline has been around for half a century, but in true South Asian/Middle Eastern fashion, serious governmental discussions didn’t start till about 1994. And twenty years later, Pakistan can expect to see imports of natural gas from Iran. Though India was associated with this project over the last decade, it is not a part of the current deal.

The reasons why India withdrew are understandable. With the civilian nuclear deal, there isn’t as much pressure to turn to traditional energy sources. Nuclear material and a good relationship with the United States definitely trumps natural gas and associations with “rogue” state like Iran. India is also acting as a proxy for the States in the region by declaring that a nuclear Iran is not acceptable.

The true winner in all of this is Iran. Less than a week from when it got slapped on the wrist with economic sanction, Iran has been able to announce the finalization of a natural gas pipeline to a large market. (Sidebar: If Iran’s natural gas and petroleum products are not being limited by sanctions, then what’s the use of these paper tiger sanctions?)

Pakistan, on the other hand, remains in its current level of precariousness. Pakistan was asked by the United States to NOT go ahead with the pipeline in return for the construction of an alternate pipeline that funnels natural gas from Turkmenistan, hence bypassing Iran altogether. The reason why India pulled out, security concerns (the one about costs made no sense; India needs energy resources even more than Pakistan does, so as to maintain its current economic output), is one that is still relevant for Pakistan.

Pakistan is stuck between a rock and a hard place, vis-á-vis energy.  The rate of growth has always been limited by the availability of oil and natural gas, not to mention the bad spending practices by the government. Losses due to insufficient energy resources is around the $3 billion mark. Maybe this pipeline can serve to improve the economy and thereby reducing the kind of conditions that have served as a breeding ground for terrorist types. A better economy could also reduce the sometimes unwarranted importance of national security, as touted by the military-ISI establishment. Here’s to hoping that Pakistan actually gains something good from this venture.

2 thoughts on “IPI Pipeline (without the extra I)

  1. Pingback: Escalation of Exceptionalism « X

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