India-Iran pipeline : The Iran Imbroglio

US objections to India-Iran pipeline are short-sighted, anti-progress. It is time for a radical new paradigm on every front, one that looks at countries and possibilities in the future, not the past.

SEEMA SIROHI - Outlook India - 13 april 2005


WASHINGTON

The Bush Administration is making every effort to show that it means business with India. It is trying to dispel the notion that India got only "words" from America in the Good Friday package, not a change of heart. Foreign Minister Natwar Singh’s visit this week will hopefully clear some of the fog when he meets his counterpart, Condoleezza Rice.

But what the meeting is unlikely to resolve is the disagreement over India’s plans to build a natural gas pipeline from Iran via Pakistan. The $4.16 billion pipeline threatens to become a major irritant in bilateral ties because of Washington’s deeply ideological and strident stand against Iran, one of the two standing members of the "Axis of Evil," the other being North Korea. During her visit to India last month Rice clarified that India could come under the Iran-Libya Sanctions Act or ILSA which calls for sanctions against any country or company that invests $20 million or more in Iran’s energy sector. She then offered an "energy dialogue" to India to help take care of the country’s crying needs.

The Bush brigade considers Iran a nuclear weapons wannabe and a gathering place for terrorists. It wants none of its friends to help Iran gain legitimacy, however strong the compulsions. But India is going ahead with its plan and hoping the maturity of Indo-US relations will take care of the rest. Indeed, Washington could look at engagement with Iran as a real option. Both India and Pakistan need to maintain relations with Iran, albeit for different reasons. The nascent stirrings of democracy and the student demonstrations in Iran a few years ago were a good sign but the Bush Administration squelched all hope by ignoring them and looking the other way. Regime change might have been in the making but the harsh line taken by the White House helped the hardliners.

The Clinton Administration had begun a tentative process of rapprochement, sparking hope among American diplomats that they may reopen their embassy in Teheran sometime in the future. Today, that thought today seems far away and foreign. Not only is the Bush Administration determined to squeeze and sideline Iran, it wants to warn and punish anyone else that deals with it.

But its opposition to the India-Iran pipeline is short-sighted. Because the pipeline will run through Pakistan, it will give Islamabad a booty of $600 a year in transit fees for simply being there and guarding it. It is a CBM worth promoting. After the Americans have been urging India and Pakistan for years to become friends, it seems odd, at the very least, that Washington should oppose the biggest CBM on the anvil almost automatically. In its place, Rice offered an energy dialogue the details and scope of which are still being decided. Why not do both -- let the pipeline through and conduct a dialogue? India’s need for energy is desperate and it can surely absorb both.

India imports nearly 70% of its annual energy requirements, and is forced to ferry gas from Iran by ship. Iran, the site of the world’s second largest gas reserves after Russia, needs to sell. The pipeline will also help Iran gain a measure of legitimacy and acceptance in the world community which can work as an incentive to moderate its behaviour. To humiliate an ancient civilization is never a good idea. The people may hate their leaders and the mullahs who divine the lengths of their hair and skirts, but they hate foreign occupation even more.

Additionally, the pipeline will help India and Pakistan develop real stakes in each other’s economy, creating additional momentum for peace. Two nuclear-armed neighbours building real bridges instead of being on the brink of war -- the most favourite nightmare of Washington types. The pipeline project could be extended to China via Myanmar, says Mani Shankar Aiyar, India’s irrepressible petroleum minister, opening possibilities and ideas unimagined even a year ago. India would gain immensely if China is amenable, earning hefty transit fees in return.

Perhaps, the idea of an increasingly trading, confident and inter-connected Asia makes the Americans a tad uncomfortable. Trade between India and China is already growing at a faster clip than Indo-US trade, a fact that rankles many in Washington. But why try to manage a new world with old ideas and old laws?

It is time for a radical new paradigm on every front, one that looks at countries and possibilities in the future, not the past.