A Post - Sanactions Iran - Pakistan's missed opportunity

Written by  Published by:Shiite News
Published in Articles
Thursday, 26 May 2016


By: KHURRAM HUSAIN

ON the day when Indian Prime Minister Narendra Modi arrived in Iran to sign the transit agreement for Chabahar port, India also arranged a $750m payment to Iran on the money owed to it from previous oil purchases. In total, India owes Iran $6bn, and the first payment was timed to coincide with the signing ceremony for transit trade between India, Iran and Afghanistan.

By contrast, Prime Minister Nawaz Sharif visited Iran with little more than a handshake and a smile. Who can blame him? How much of the foreign policy of his country is really decided by him anyway?

The moment when sanctions were lifted on Iran was the time to make a grand gesture. In an ideal world, Pakistan would already have built its portion of the natural gas pipeline, connected it to the Iranian side, and begun receiving gas through it. This would require the lifting of Pakistani sanctions, something requiring executive notification only, followed by the establishment of a banking channel, requiring some work at the State Bank and National Bank. None of this would be more than a couple of days’ work, and to inaugurate the newly built relationship, the first payment could have been made a few days later, right before a state visit by the prime minister.

Instead the PM’s visit on Jan 20 was a non-starter. How many people even remember it now? It was during this visit that President Rouhani prodded Nawaz Sharif to lift Pakistani sanctions against his country, something the PM tasked his finance minister with upon his return.

Likewise the visit by President Rouhani in March presented a second opportunity to make a grand gesture of some sort, and announce the start of a long cooperative relationship between the two neighbouring countries. But once again, there was nothing but pleasantries, along with an awkward tweet about an Indian spy coming from Iran sent out by ISPR, prompting a reaction from the Iranian government.

The moment when sanctions were lifted on Iran was the time to make a grand gesture.
As an aside, should we expect a similar tweet now about Mullah Mansour also coming from Iran and landing the country in some amount of embarrassment?

Of all the follies that any country’s leadership can fall prey to, none exceeds the folly of deliberately alienating your neighbours without good reason. This is especially true when there is so much to be gained from a cooperative relationship.

The port at Chabahar and the attendant road infrastructure being built by India, Iran and Afghanistan is not an event to turn our backs on. There is every reason for Pakistan to ask for a place on that table. The possibilities that regional cooperation open up are far too great to be sacrificed at the altar of geopolitics.

Consider the CASA transmission line that is being built to carry electricity from the Kyrgyz Republic and Tajikistan to Pakistan. This could be the first step in a string of projects to create a regional electricity market to include Iran, and yes eventually India too. Power transmission lines could carry bulk quantities of electricity from China to Pakistan for the same cost that is being incurred to build coal-fired power plants over here, and for a similar tariff. The CASA 1000 tariff is comparable to the upfront tariff for coal under which the Chinese investments are coming in — Rs9.5 per kilowatt hour.

A regional market for electricity could be coupled with a regional market for natural gas, where once again the purchase price of piped gas can be comparable to the LNG we are currently buying. A network of highways connecting the main cities of the region, coupled with a visa regime to facilitate movement of businessmen and trucks, could add trade in goods to the basket of opportunities. Next comes trade in services.

There is no end to the benefits that will come from greater regional cooperation in our neighbourhood. Even if there are issues with India, they need not hold back greater cooperation and connectivity to the west.

There are two sorts of arguments that repeatedly come up when discussing regional cooperation. One says that Iran’s growing ties with India means we should be wary. But does the same apply to Saudi Arabia, which is the fifth largest market for Indian exports, and only this April Prime Minister Modi completed a two-day visit to the kingdom. The following is an excerpt from the joint statement issued at the conclusion of that visit:

“The two leaders emphasised the importance of expanding trade and investment ties to drive the strategic engagement forward. They directed their Finance and Trade Ministers to work together to find ways and means to substantially increase the flow of bilateral investments and growth of trade ties.”

Now what? Should we sever our ties with the kingdom too by that logic?

The other argument suggests that we don’t need anyone beyond China as a regional partner. But why should Pakistan put all its eggs in one basket? Why should we seek to build relations with only one of our four neighbours? A growing and cooperative relationship with other neighbours will strengthen our own bargaining position in dealings with China, and will be to the benefit of Pakistan.

Why should that benefit not be availed?

Another argument casts the regional debate between security versus economic benefits. Should we sacrifice our security for “a few dollars more” this camp asks.

This is highly ironic, because it is the weakness of our economy, born in large part to the lack of its integration to the region, that sends us into the embrace of big powers in search of “a few dollars more”. Nothing compromises our security like a weak economy, and the struggles around trying to purchase F-16s with aid money is the best illustration of what happens when you pursue security without a strong economic foundation.

It’s high time Pakistan matured, and learned how to do business with its neighbours. History waits for no one.

 

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