Pakistan: No more a pipedream

EDITORIAL: DAILY TIMES

With the large manufacturing sector almost shut down and the textile industry, the backbone of Pakistan’s economy, on its knees, mainly due to the energy crisis, the finalisation of the Iran-Pakistan gas pipeline as a result of president Asif Ali Zardari’s trip to Tehran is good news. That Pakistan has mustered the strength to go against the US and the UN, both having Iran on their sanctions list, finally shows maturity dawning on the leadership on the criticality of the energy crisis facing the country. It is time for the US also to understand Pakistan’s internal vulnerabilities, especially when terrorism has crippled its capacity to grow, the crisis in the energy sector has sapped its vitals and is the cause of the rising anger of citizens against the government. Unemployment and inflation, arguably fed by the energy crisis, have led to rising crime. Small businesses that are the staple of employment in any economy have been ruined because of the prevailing circumstances. The crisis and makeshift or ad hoc measures to cope with the energy shortfall are no solution. Hence the decision to ignore US pressure while not ruling out its proposals to try other energy solutions is a positive omen for Pakistan’s future. Any indigenous plan to overcome the energy shortfall, either through gas exploration or coal development, would take time to become operational. On the other hand, Pakistan is in dire need of reducing its growing dependence on imported oil, which is not only eating into the foreign reserves but also contributing to galloping inflation, impacting severely on cost of production and cost of living. In this context, the Iran-Pakistan gas pipeline appears attractive and feasible. Iran has been gracious enough to offer finance and the construction of the remaining pipeline on our side. It has already finished its section of the pipeline up to the border. On completion the project would cost $ 7.5 billion, supplying 750 million cubic feet per day of natural gas by mid-2015. Pakistan has had multiple troubles finding financiers for the project, primarily because of the US’s stance against Iran. One important issue that could affect the maintainability and security of the project is Balochistan’s nationalist insurgency. Balochistan, whether on this side of the border or across in Iran, is a troubled area. It was security and US pressure that persuaded India to withdraw from the deal that was initially an Iran-Pakistan-India pipeline. This issue would remain thorny unless we decide to sit down and talk with the insurgents in Balochistan. However, China’s growing appetite for energy is expected to make it a partner in sharing the resource. That would give a financial breather to Pakistan in the form of transit fees that it had to lose because of India’s withdrawal. The complexities surrounding the project have been myriad and it goes to the credit of Pakistan that it had never abandoned the project, despite the difficulties. The economic chemistry of regional cooperation has left little choice for countries within the area except to cooperate in energy and trade. For Iran, which has always been a brotherly neighbour, we should be prepared to go the extra mile, benefiting ourselves in the process.