U.S. put monkey wrench in Iran-India pipeline

Salman Haider, The Statesman, Asia News Network, Calcutta

After much effort, some progress has now been recorded in the project to bring natural gas by pipeline from Iran to India across Pakistan.

Petroleum Minister Mani Shankar Aiyar's energy and drive have made the difference and have enabled this decade-old project finally to take a few tottering steps forward. Many questions remain, for it is a complicated matter to fashion a tripartite project of this type, made more complex by the endemic bad relations between two of the parties.

Yet the gas pipeline has emerged as one of the real achievements of the current thaw in Indo-Pakistani ties. In truth, there is not so much beside, apart from the Srinagar- Muzaffarabad bus service, among concrete measures that have emerged so far.

And now, unexpectedly, U.S. Secretary of State Condoleezza Rice has thrown a spanner into the works. During her Delhi visit, she expressed her country's disfavor for the Iranian pipeline. This lends a major blow to the scheme, making inadequate the small but real successes of the last few months. Suddenly the prospects do not appear encouraging.

American hostility towards Iran is an old story, and America has never been comfortable with the idea of a gas pipeline from Iran to South Asia. Hence it encouraged the Unocal oil and gas company, and there was also an Argentinian one, to propose an alternative supply source in Turkmenistan, to be brought through a pipeline crossing western Afghanistan and Pakistan on its way to India.

This was at a time when the Taliban was in Kabul, still engaged in a life-or-death struggle with the Northern Alliance.

In those unsettled conditions, there was no chance of anyone being prepared to make any sort of investment in this alternative pipeline, and despite recent improvements in Afghanistan, that remains true today. Indeed, in the murky world of oil and politics, it was believed by some that the second pipeline, wholly unfeasible, was projected only as a spoiler for the first, which though difficult had real prospects. Since then, major changes in the geopolitics of this region have taken place with U.S. military operations in Afghanistan and Iraq.

Iran's cautious, non-provocative diplomacy while war raged around it briefly raised hopes of a bit of a thaw in its dealings with America.

But today, under the second Bush administration, things have deteriorated further. There are tough demands that Iran should abandon its effort to acquire a complete nuclear fuel cycle capacity, and much is being said about "regime change" in Teheran. It is against this background that Rice expressed opposition to the Iranian pipeline.

What has now occurred is a good illustration of how the preoccupations of the sole superpower can upset others' applecart. Our plans could be adversely affected by American enmity for Iran, with which we are wholly uninvolved -- though it is worth observing in passing that some of our smaller neighbors at times blame us for comparable insensitivity in pursuing our concerns while ignoring theirs.

Iran is, and will remain, a major source of energy for us, and the economic case for a pipeline is self-evident.

What is no less significant is how this project has become a building block in fashioning a new, cooperative relationship between India and Pakistan.

It is a major outcome of the "composite dialogue" and is seen as a way of giving the two countries a reciprocal stake in each other. The bilateral dialogue is supported on all sides, and in fact America has long been pushing us towards the negotiating table, even at times when we were in no mood for it. It is thus an irony that its own perceived regional interests should drive America towards bringing the pipeline venture, one of the most important results of the dialogue, to a halt.

It must be assumed that when she went to Islamabad Rice was equally set against the pipeline. One unfortunate outcome of this diplomatic journey to South Asia is that it could encourage the South Asian "refuseniks".

There are plenty of functionaries in both India and Pakistan who remain unconvinced by the dialogue but have had to go along with it as the tide is in its favor.

Not everyone wants progress, and the vested interests in support of the status quo remain strong. The slow advance of the dialogue reflects not so much the complexity of the issues as the strength of the rearguard effort to hold back.

So, what now? It is uncomfortable to find one's hard- fought plans placed at risk in the manner now being witnessed. A project like the pipeline that holds much importance for India cannot be readily set aside.

But it is also difficult to pursue the project in the face of American opposition. Concessional international financing will not be available, and even commercial borrowings will be difficult if the lending parties face the risk of American sanctions. Rice's visit showed that the Indo-U.S. relationship has matured to the point that we can disagree on specific issues, even major ones like F-16s for Pakistan, without rancor and acrimony.

Strategic, political and economic considerations underpin the current healthy state of relations.

If India is indeed firmly committed to the pipeline, it must do all it can to persuade America, and others, of the part this project can play in stabilizing the region and improving cooperation between currently unfriendly states. That is the best and the most reasonable way forward.