Iran’s ‘Look East’ policy takes wings

M.K. Bhadrakumar July 17, 2015 10:40 PM (UTC+8)
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Most analysts blithely overlook that Iran also has a “Look East” dimension to its foreign policies and once it shakes off the shackles of the UN sanctions, it is that vector which is bound to become lively almost overnight, impacting the regional alignments in the South Asian region in a major way.

The deck is now clear for the implementation of the Iran-Pakistan gas pipeline project
The deck is now clear for the implementation of the Iran-Pakistan gas pipeline project

Few would have noted that amidst the preoccupations over the Vienna talks between Iran and the world powers last week, President Hassan Rouhani found time to make a quick dash to Ufa, Russia – although Iran is not a member of the BRICS and the Shanghai Cooperation Organization [SCO] is yet to take a decision on Iran’s membership. He was signaling the high importance Iran will attach to the “Look East” in its multi-vector foreign policies.

In the emergent context of the nuclear deal concluded at Vienna and the prospect of lifting of sanctions, Iran’s “Look East” will galvanize the country’s ties with Pakistan. Islamabad could anticipate this and within hours of the news coming in from Vienna, the Foreign Ministry had come out with a full-fledged statement, warmly welcoming the Iran deal and hailing it as auguring “well for peace and security in our region.”

Indeed, Pakistan has every reason to visualize itself as the biggest beneficiary of the lifting of sanctions on Iran in the immediate terms. The deck is now clear for the implementation of the Iran-Pakistan gas pipeline project, which has been stalling for years due to combined US-Saudi pressure on Pakistan.

Iran has already completed its part of the pipeline but American pressure prevented Pakistan from undertaking the construction of the pipeline on its side, costing $2 billion.

Pakistan’s petroleum minister Shahid Khaqan Abbasi stated on Wednesday that the Chinese-funded LNG terminal at Gwadar and the 700-kilometre long pipeline linked to it as part of the China-Pakistan Economic Corridor [CPEC], which is expected to be ready by end-2017, can actually double up as well and become the Iran-Pakistan gas pipeline as well.

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 realize that the Iran-Pakistan gas pipeline is easily extendable to China, since the CPEC connects Gwadar and Xinjiang not only through 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.

Of course, the Chinese-funded LNG project at Gwadar, which will take 30 months to build and where construction work is slated to begin in October, will directly receive Iranian gas.

The geopolitical significance of these developments does not need much elaboration. Simply put, Pakistan is becoming the gateway for a profound Iran-China energy relationship. It cannot but signify the beginning of a new regional axis, which is reflected in the Pakistani statement on Tuesday that the Iran deal augurs well for peace and security in the region.

Of course, the US is keenly watching the startling development in regional politics. A VOA commentary on Thursday titled “Pakistan Hopes to benefit from Iran Deal, With Chinese Help” acknowledged rather sardonically that the Iran-Pakistan gas pipeline project is in effect a Chinese project. It said, “Now, with the prospect of sanctions on Iran lifting in the near future, Pakistan is hoping to become one of the early beneficiaries of a nuclear deal between Iran and six world powers by finally completing the Iran-Pakistan pipeline. But funding for the expensive project, expected to cost about $2 billion, is another problem for cash-strapped Pakistan. That is why it is trying to piggyback this project on another one funded mostly by its rich neighbor, China.”

The US has been promoting an alternate gas pipeline from Turkmenistan via Afghanistan and Pakistan to India known as the TAPI pipeline. It pinned hopes on the TAPI, sponsored by the Asian Development Bank, to help Big Oil get a toehold in Turkmenistan’s energy sector, which is dominated by China, and give some much-needed traction to the US’ Central Asia policies.

However, with the prospects of the Iran-Pakistan-China pipeline vastly improving, it remains to be seen how far Pakistan remains wedded to the TAPI project. The plain truth is that the hardline Indian policies have offended Pakistan to such an extent that it may not be inclined to join a regional project that involves India.

India is a big loser here in more ways than one, since traditionally Delhi has viewed Iran as a “second front” against Pakistan. On the other hand, the proposed Iran-Pakistan pipeline promises to give strong underpinning to the two countries’ bilateral cooperation and it will nudge Iran toward taking a neutral position in the India-Pakistan differences and disputes.

Pakistan has so far stubbornly refused to provide a direct access route for India to connect with Afghanistan and Central Asia. India has been fancying an alternate route via the Iranian port of Chabahar. Iran has welcomed India’s proposal to fund the development of Chabahar port as a container terminal. But then, both China and Pakistan cannot be happy about it, since Gwadar, which is also being developed as a naval base, is just about 80 kilometers from Chabahar.

There have been reports that Chinese companies have evinced interest in developing Chabahar port. It cannot be ruled out that Pakistan and China may work in tandem to discourage Iran from allowing an Indian presence in Chabahar region so close to the Gwadar naval base.

Clearly, the Iran-Pakistan-China energy cooperation and Iran’s link-up with the CPEC will also mean that there will be strong desire on the part of Islamabad and Tehran to harmonize their interests in Afghanistan, which can only work as a positive factor for the search for a settlement in Afghanistan (in which China is actively involved as well.)

Traditionally, India and Iran had cooperated closely with regard to the Afghan problem, which in effect neutralized to an extent Pakistan’s concerted strategy to curb the Indian desire to be an influential player in Kabul.

Suffice it to say, India may end up paying a heavy price of isolation in its region for having neglected its relations with Iran through the past decade.

In the emergent scenario, India is left with no options but to swallow the bitter pill and engage Pakistan despite the latter not having cared to fulfil any of the terrorism-related preconditions that Delhi had set before entering into any form of dialogue with Pakistan.

Washington has been urging Prime Minister Narendra Modi to rein in the hardline Hindu nationalists in his camp and get cracking on an India-Pakistan normalization without any further loss of time. Modi has heeded the American wish and has, in fact, gone the extra league to make the unprecedented announcement so much in advance that he is even willing to visit Pakistan next year.

It has been a remarkable retreat by the hardline Hindu nationalist leader who has been a strident exponent of pursuing a “tough” line toward Pakistan.

Indeed, the US’s own regional strategies depend vitally on the India-Pakistan normalization and Washington counts on Modi to deliver. But the catch here is that Pakistan may not have any real incentive to show mercy at this point toward the Modi government after all the bad blood that has been spilt in the past year. (The Indian Defence Minister Manohar Parrikar even threatened once that Delhi will let loose terrorist groups to teach Pakistan a lesson.)

Pakistan is well aware that it will be negotiating from a position of strength with India, especially with China solidly backing  it, while India has been virtually isolated in its own region.

Be that as it may, the ground reality is that the pipelines from Iran heading to Europe will take time to develop, but in the meanwhile it is Tehran’s “Look East” energy export policy that are poised to take wings in the nearest future.

The regional politics in South Asia is set to get a dramatic makeover that few could have anticipated – except Pakistan and China, of course, which are all set to ride the wings of Iran’s “Look East” energy policy.

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M.K. Bhadrakumar
MK Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India’s ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001). He writes the “Indian Punchline” blog and has written regularly for the Asia Times since 2001.
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