The peace pipeline

While looking at the key trade and geo-political patterns in the world, it is imperative that the Pak-Iran gas pipeline is eminently sensible, should be completed and made operational at all costs. Thus, trade between Pakistan and Iran should not be a cynical exercise mired in political opportunism but should bring the two economies and people closer.

On Monday March 11, 2013, the presidents of Pakistan and Iran Mr Asif Ali Zardari and Mr Mahmoud Ahmadinejad inaugurated the Iran-Pakistan gas pipeline. The pipeline is also, sometimes, referred to as the Peace Pipeline. The idea for such a supply channel was originally suggested by Malik Aftab Ahmed Khan in his article titled “Persian Pipeline”, which was published by the Military College of Engineering in the mid-1950s. It was conceptualised by Nobel Prize-winning Indian academic Rajendra K Pachauri and Iran’s former deputy foreign minister Ali Shams Ardekani.

In 1994, negotiations for ‘Peace Pipeline’ commenced between Iran and Pakistan. India joined the talks in 1999. Initially, the plan was dubbed as Iran-Pakistan-India gas pipeline, which was supposed to deliver Iranian gas to Pakistan and, onwards to India. However, India opted out of the project in 2009 citing dissatisfaction with the transit fee that Pakistan was demanding. There were also concerns about the security of the whole venture that traversed through hostile territory at several points. However, it is widely believed that India quit the project at the behest of the United States. Last year, a Chinese bank also abandoned the pipeline project out of fear that it might be subjected to international sanctions for dealing with Iran.

In late January, Iran and Pakistan jointly set up a company in order to build the Pakistani portion of the pipeline. Initially, the estimated time for completion of the Pakistani part was a little more than a year but according to recent Iranian media reports, it could take about two years.

The pipeline starts from Asalouyeh in Iran stretching 1,172 kilometres towards Pakistan. The 781 kms long pipeline on Pakistani side will travel through Balochistan where it will branch out towards Karachi. The main line will continue onward towards Multan and beyond. It will deliver 750 million cubic feet of gas on a daily basis. The cost of gas thus imported will be 14.53 dollars mmbtu. According to the terms of an agreement signed by Iran and Pakistan in 2010, if the latter fails to complete its side of the pipeline by 2014, it will be obligated to pay a daily penalty of a million dollars to Iran until the conduit is complete.

The Iranian side of the pipeline is almost complete. The Pakistani part of the project will cost around 1.5 billion dollars. Iran will loan one-third of this sum amounting to 500 million dollars out of which 250 million dollars will be paid directly to the construction firm responsible for laying 80 kms of pipeline inside Pakistan. The next tranche of 250 million dollars will help in laying the remaining 701 kms pipeline. This loan, alongwith a two percent interest plus LIBOR, will be repaid as a fraction of the price of gas. Pakistan will still need to raise sizeable funds in order to see the project through, a task that seems hurculean at the moment in the wake of considerably depleted foreign reserves and a hefty IMF repayment hovering over the head.

Pakistan is highly dependent on natural gas for domestic and commercial consumption as well as electricity generation. Moreover, natural gas also plays a very crucial role in transportation within the country. For years, Pakistan is desperately trying to cope with an acute energy shortage that has all but crippled the economy. Last month, the country suffered a nation-wide blackout that only served to further highlight its exponential energy woes.

The US is vehemently opposed to the project and assumes that the hasty progress of the Peace Pipeline is politically motivated since the energy issue, by all accounts, will play a pivotal role in this year’s general elections. The mandate of the present government will expire in a few days. The ruling party may be planning to use the Peace Pipeline as a gambit for securing votes since the public will perceive it as a practical step towards resolving the energy issue. Moreover, defying the US, or seeming to do so, is extremely popular in Pakistan whose overwhelming public opinion is anti-US despite being the recipient of enormous American aid.

The US has threatened Pakistan with sanctions if it builds the gas pipeline. However, it is more likely that sanctions will be imposed only after the actual delivery of gas starts. Pakistani companies buying gas from Iran may also face US restrictions. The State Department recently criticised Pakistan for wasting its limited resources on such projects. The US is concerned that the Peace Pipeline will enable Iran to evade international sanctions by selling a huge amount of its gas. This will, consequently, blunt US efforts to keep Iran under pressure over its nuclear activities.

In order to address Pakistan’s genuine energy concerns, the US has suggested the trans-Afghanistan pipeline for delivering gas from Turkmenistan to Pakistan through Afghanistan. The pipeline could be extended further to India. Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, which will effectively bypass Iran, has been on the tables in Washington for several years but could not materialize despite Asian Development Bank’s backing due to the fragile security situation in Afghanistan. The TAPI proposal is, however, still alive and may transpire in the next five years.

Pakistan’s current annual oil import bill exceeds 12 billion dollars. The bulk of the imported furnace oil is used for generating electricity. Importing gas from Iran may prove helpful not only in managing the severe energy crisis but also reducing Pakistan’s import bills to a reasonable extent. However, it is also important to carefully examine the diplomatic costs of carrying on with a geo-politically significant project that is not favoured by the international community.

By Atif Shamim Syed

The writer is an investment banker and a freelance columnist for various publications. He can be reached at

Daily Times

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Lashkar-e-Jhangvi Project: “Destroying Pakistan”

The terrorist Lashkar-e-Jhangvi group was in fact created, according to the BBC, to counter Iran’s Islamic Revolution in the 1980’s, and is still active today. Considering the openly admitted US-Israeli-Saudi plot to use Al Qaeda and other terrorist groups across the Middle East to counter Iran’s influence, it begs the question whether these same interests are funding terrorism in Pakistan to not only counter Iranian-sympathetic Pakistani communities, but to undermine and destabilize Pakistan itself.

Pakistan may be facing the most decisive moment of its survival. The persecution and killing of Muslims by other Muslims on supposed religious grounds has reached horrifying levels. Terrorist and sectarian violence, targeting both the powerful and the powerless, spearheaded by groups such as the Tehrik–e-Taliban Pakistan (TTP) and the Lashkar-e-Jhangvi (LeJ), has created havoc. Both groups are part of an even larger network that includes the Islamist sectarian militias in the country, hard-line activists in Pakistan’s mainstream Islamist political parties and organisations, and sympathisers in government institutions and across social classes. Sufi Islam has given way to Wahabi bigotry as the country has become increasingly intolerant and de-secularised, allowing obscurantism to prosper.

The culture of militancy in Pakistan largely stems from the extreme hard-line Islamic ideologies practised in Pakistan for decades, with full acceptance and participation of Pakistani civil society in general. Extremism has been boosted by the ever-present religious hysteria nurtured by the largely Punjabi feudal-military-bureaucratic oligarchy, from the country’s very inception. Punjab ‘the sword arm of Pakistan’ and ‘the bastion of Pakistan ideology’ (Stephen Cohen) has become the epicenter of regional extremism. Pakistan’s present state is a warning and example for any nation that fails in the separation of religion and state. Throw intolerant Islam into the mix, and you have a sociological challenge: illiterate masses, like putty in the hands of mullahs, being used by a military to justify its primacy.

For Islamists or fundamentalists, the failures and shortcomings that afflict the Pakistani state and society is due to imported secular notions and practices. They regularly trumpet that Pakistan has fallen away from the authentic Islam and thus lost its direction. Their aim is to create a uniquely repressive society where regular citizens have few rights, speech and thoughts is restricted by both government and the Sunni Deobandi religious order, and repression against women. The views of the few modernists or reformers in society, who see the inflexibility and ubiquity of the Islamic clergy, as the main cause of the country’s backwardness, are easily drowned out.

What has also not helped is the country’s dismal record in three main areas: military, economic, and political, which has been, to say the least, disappointing. The quest for victory by the military has brought a series of humiliating defeats. The quest for prosperity through development brought in an impoverished and corrupt economy in recurring need of external aid. For the mostly oppressive but ineffectual governments and dictatorships that have ruled Pakistan, finding targets to blame serves a useful, indeed an essential, purpose, to explain the poverty that they have failed to alleviate and to justify the tyranny that they have introduced. They have chosen to deflect the mounting anger of the unhappy populace toward other, outside targets such as the country being a victim of the regional-global power politics since its creation.

If Pakistan continues on its present suicidal path, there will be no escape from a downward spiral of hate and spite, rage and self-pity, poverty and oppression, culminating sooner or later in the country’s disintegration. But even today, despite the murder and mayhem, not all in Pakistan seem convinced that confronting the jihadist movement is an urgent need for Pakistan’s survival as a democratic country. For some hard-line nationalists, and even some progressives defying the US imperialist agenda in the region takes precedence, and the external pressure to defeat the Islamists is to be resisted. Among the more pragmatic, the view is that Pakistan should accommodate the world, but without directly confronting the jihadist groups. It seems as if society is fine being permanently hijacked by forces of obscurantism.

It will be very difficult if not impossible to reverse the national downslide that Pakistan seems to have chosen for itself. To truly confront the extremist threat, the first challenge is for Pakistanis to agree that they want to live in a modern, democratic and plural society. To achieve this goal, the jihadi movement will have to be faced and overcome, by overwhelming force if necessary. It will also require a carefully planned and methodically executed programme of reform aimed at removing the root causes of the proliferation of violence in society, and improvement in the investigative, preventive, and prosecution capabilities of security and intelligence agencies, and the administration of justice. 

In addition, the state will have to re-tool its policies towards representing all the people who live in the country, and, not identify itself with any particular section of the population. Finally, the democratic political process has acted as a bulwark against the spread of militant fundamentalism among the populace, despite their increasing alienation from state system. The populace must be encouraged to articulate their demands through the major mainstream political parties. Put simply, to effectively meet the Islamist challenge, the Pakistani state and society must finally accept and fully exercise its responsibility to maintain peace, provide justice, foster democracy and participation, and make available in an equitable manner the resources necessary for economic and social development. Pakistan’s neighbours and the world will need to help.

 By Saad Hafiz

The writer can be reached at

Daily Times

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