Iran and CPEC

Now, that’s a good idea

In a recent development in September, Iran has agreed to consider options of involvement with the proposed China-Pakistan Economic Corridor (CPEC), the aim being to improve and upgrade links via both railways and road targeting to widen scope of goods transit. The offer comes from Pakistan which is a very pleasing development. Obviously, someone has rethought the ground realities and the importance of Iran to make the CPEC a success. The discussions between representatives of both countries took place recently and this suggestion was made in anticipation of the possible lifting of sanctions on Iran in near future by the international community.

In October 2014, Pakistan had made an effort to arrange for import of gas from Iran. However, US had shown great displeasure at Pakistan’s desire notwithstanding its dire need. The proposed plan targeted to convert natural gas into liquefied natural gas (LNG) and use the services of Oman’s LNG terminal to transport gas from Iran into Pakistan. Interestingly, a similar displeasure towards India to stop any negotiation with Iran did not stop the Indians from going ahead in what they termed as “India’s national interests”. Minister for Shipping and Road Transport and Highways Nitin Gadkari had announced ahead of the meeting between the two countries that, “India is willing to invest in Iran, especially in ports, roads, railway projects, and hoped that India-Iran cooperation in Chabahar can help strengthen bilateral relations.” (July 4, 2015) Soon after, “Iran and a group of six nations led by the United States reached a historic accord to significantly limit Tehran’s nuclear ability for more than a decade in return for lifting international oil and financial sanctions.” (NYT, July 14, 2015)

Regional alliances are undergoing some fast changes, Pakistan needs to understand these changes and form policies accordingly and not miss the boat. Pakistan has done well by signing the “Military Cooperation Agreement” with Russia in 2014. The relationship between China and Pakistan is well established. The shifting of India towards US has not been overlooked by Russia (reference turning to not only US but also Israel for military supplies) which is looking to other countries in the region for building alliances with. However, this will not mean withdrawing from earlier and existing alliances. Russia may well end up supplying military hardware to both India and Pakistan. Russia’s arming Pakistan will be seen as a breakaway from their policy of close alliance with India and entering into a trade relationship with its archrival.

“India has been recalibrating its Iran policy for some time now. New Delhi has signed an air-services agreement with Iran enhancing the number of flights between the two nations and allowing each other’s airlines to operate to additional destinations. The two sides have also inked a memorandum of understanding that is aimed at increasing bilateral trade to $30 billion from $15 billion. Plans are afoot for greater maritime cooperation, and Iran has already joined the Indian navy’s annual initiative, the Indian Ocean Naval Symposium, which provides a forum for the navies of the Indian Ocean littoral states to engage each other. After years of dilly-dallying under the UPA government, the Modi government has decided to invest $ 85.21 million in developing the strategically important Chabahar port in Iran, allowing India to circumvent Pakistan and open up a route to landlocked Afghanistan. Iran’s Chabahar Port, located 72 kilometres west of Pakistan’s Gwadar port, holds immense strategic and economic significance for India.” (Harsh V Pant for The Diplomat, April 7, 2015)

In the atmosphere of changing regional alliances, India’s involvement in Chabahar and Iran’s emerging from its cocoon of isolation and the need for Pakistan to get the CPEC off-ground, it becomes important to involve Iran in this venture. This will ultimately benefit and strengthen both countries.

The lifting of sanctions on Iran can mean a bonus for Pakistan. M K Bhadrakumar, a leading analyst from India, wrote, “Quite obviously, China and Pakistan neatly sidestepped the US opposition to the Iran-Pakistan gas pipeline project by instead planning a pipeline of their own as part of the CPEC, with Chinese funding to the tune of $2 billion, with the clear intent that it could eventually be dovetailed into the Iran-Pakistan pipeline project once the sanctions against Iran got lifted. That’s exactly what is happening. All that Pakistan has to do now is to link Gwadar with the Iranian border, which is a distance of some 80 kms. The proposed Iran-Pakistan pipeline will then run from Asaluyeh in Iran to the Pakistani port of Gwadar (built by China), which is the “nerve centre” of the China-Pakistan Economic Corridor, and from there onward to Nawabshah in Sindh to the north of Karachi. In reality, though, we are just about to realise that the Iran-Pakistan gas pipeline is easily extendable to China, since the CPEC connects Gwadar and Xinjiang through not only road and rail links but also multiple pipelines. Pakistan is about to become the transit country for an Iranian mega gas pipeline leading to China. It will be the shortest route connecting China with Iran’s fabulous gas fields.”(July 2015)

Zafar Hilaly, Pakistan’s former Special Secretary Foreign Affairs to the Prime Minister, says, “Some good quiet diplomacy is needed now to ascertain Iranian intentions. We should be taking the lead.”

Lieutenant General (retd) Ashraf Qazi states, “These are excellent developments on the face of it but Iran has a history of agreeing to many things that did not see implementation at the end of the day. We had agreed on linking Gwadar with Chahbahar through extension of Coastal Highway. They had agreed to construct the missing railway link between Zahidan and Isfahan, which would link our railway with Europe but nothing came out of it.”

Caution as advised by General Ashraf, yes. However, Iran will be flexing its muscles to establish its presence with the international comity of nations. Export of energy will be a good point to take off as the pipeline itself will take time.

For Pakistan, involving Iran in its lead project would be a good policy. Iran’s stakes in Pakistan will to a great degree balance out her economic interests in India and force Iran to maintain a balance between both India and Pakistan. On the other hand, Pakistan needs well-wishers, supporters and those willing to invest in this project. The best place to start is with her neighbours and Iran is an obvious choice.

Pakistani hawks must understand the changing ground realities; it is different from yesteryears. Pakistan must test new waters boldly. Thomas Jefferson’s words will serve Pakistan well at the crossroads of foreign policy it finds itself in today, “Peace, commerce, and honest friendship with all nations, entangling alliances with none.”