May 15, 2014 Special Dispatch No. 5744

Pakistani, Indian Writers Examine Iran-Pakistan Ties, And How Islamabad Is Caught In A Bind Due To Saudi And Indian Role In The Region

May 15, 2014
Saudi Arabia, Iran | Special Dispatch No. 5744

Pakistani Prime Minister Nawaz Sharif (left) and Iranian President Hassan Rouhani

At a May 12, 2014 meeting in Tehran, Pakistani Prime Minister Nawaz Sharif and Iranian President Hassan Rouhani agreed to boost Iran-Pakistan bilateral relations. They also agreed to press ahead with the Iran-Pakistan (IP) gas pipeline project, which has been in limbo in recent years due to strong U.S. opposition; India has already withdrawn from the project.[1]

However, the main purpose of Sharif's visit to Tehran was to re-balance Pakistan's relations with Iran, in the wake of a slew of recent Pakistani initiatives with Saudi Arabia and other Sunni Arab nations, especially the Pakistan-Saudi cooperation in defense sector which is being seen as an attempt by Riyadh to secure Pakistani military support against the Syrian regime. Iranians were worried over Pakistani-Saudi cooperation on Syria.

Additionally, Iran-Pakistan diplomatic relations were dealt a serious setback in February 2014, when five Iranian border guards were abducted by Jaish-ul-Adl, a Sunni jihadi group based in Pakistan's Baluchistan province, and taken into Pakistani territory; one of the guards was killed. Tehran had threatened to launch military incursions into Pakistan, but the remaining four Iranian soldiers were released after secret intervention by some Sunni clerics in Pakistan as well as by Pakistani military intelligence.

Below are excerpts from some articles that examine the entire gamut of Pakistan-Iran relations as well as how all neighbors of Pakistan – such as Iran, Afghanistan, China and India – are worried over the jihadi groups' activities in Pakistan. Before Nawaz Sharif began his May 11-12 trip to Tehran, Dr. Simbal Khan, a senior research fellow at the Islamabad Policy Research Institute, examined, in a May 10, 2014 article, the stakes in the two countries' diplomatic ties. In a March 31, 2014 article, senior Pakistani journalist Amir Mir analyzed the issue of the abduction of Iranian border guards and how all Pakistan's neighboring countries are edgy about Pakistan-based jihadi groups. A May 12 article by Pakistani analyst Yasmeen Aftab Ali examined how Pakistan is caught in a bind with regard to its relations with Iran, especially in view of the Saudi and Indian roles in the region.

Also below are excerpts from a November 29, 2013 article by Indian journalist M. Ramesh examining Indian and Pakistani positions on the Iran-Pakistan (IP) gas pipeline project as well as on another proposed pipeline project from Turkmenistan through Afghanistan and Pakistan to India (TAPI). Ramesh noted that the IP project may not take off.

Additionally, a March 21, 2014 article by noted Pakistani researcher Syed Fazl-e-Haider argued that by giving Pakistan a gift of $1.5 billion, Saudi Arabia may have quietly killed the IP project, something the U.S. was unable to do over the course of several years.

The assessments by M. Ramesh and Syed Fazl-e-Haider appear to be nearer the ground realities, notwithstanding the May 12 statements by Nawaz Sharif and Hassan Rouhani to press ahead with the IP gas pipeline project.

Dr. Simbal Khan: "Pakistan's Official, Diplomatic Support To The Saudi Position On The Syrian Crisis In February Provided More Fodder For Sensational Gossip Of Secret Military Pacts [Between Riyadh And Islamabad, Causing Discomfort In Iran]"

Dr. Simbal Khan wrote in a May 10, 2014 article:[2] "Critical developments within the region and the greater Middle East form the backdrop of Prime Minister Nawaz Sharif’s official visit to Iran on May 11 and 12. Pakistan-Iran relations, long marked by cold formality, were recently jolted out of their stage-managed civility by a series of unusual events. The kidnapping in February of five Iranian border guards by trans-border Sunni militants that straddle Baluchistan [province of Pakistan] and Iran's border province of Sistan-Balochistan quickly unmasked the underlying tensions brewing between the two countries.

"Wider strategic shifts playing out at the regional level intersected with local developments, and reporting on the border incident became overlaid with talk of the growing Saudi-Pak cooperation and Pakistan as a factor in the future security of the Gulf states. Pakistan's official, diplomatic support to the Saudi position on the Syrian crisis in February provided more fodder for sensational gossip of secret military pacts [between Riyadh and Islamabad, causing discomfort in Iran]. The back-to-back visits of Gulf dignitaries [to Pakistan] as well as at least five visits by members of the Saudi royal family to Islamabad including the Saudi foreign and deputy defense ministers, culminating in the two-day visit of Saudi Crown Prince Salman bin Abdul Aziz on February 15, created greater optics.

"The joint statement issued during the visit of the crown prince unleashed intense speculation regarding the possibility of Pakistan's security support to the Sunni Gulf sheikhdoms against Iran. Prime Minister Nawaz Sharif's closeness to Saudi Arabia, where he lived in exile for seven years [following the 1999 coup in Pakistan], was seen as a factor of change, turning around Pakistan's long-practised policy of non-interference in the internal squabbles of Muslim states.

"As tensions flared and Iran threatened to send its forces into Pakistan to retrieve the border guards who had been kidnapped, several observers saw the escalation of tensions in the light of wider sectarian [Sunni-Shi'ite] tensions in the region including the Iran-Saudi tussle over Syria, increased sectarian violence in Pakistan and the Middle East and deepening Pak-Saudi security cooperation. Some analysts also attributed the more muscular posturing by the Iranian government, led by newly elected President Hassan Rouhani, to the dramatic thaw and historic U-turn in U.S.-Iran relations over Iran's nuclear program."

"During The [May 5-6] Visit... Of The Iranian Interior Minister Abdolreza Rahmani-Fazli, Pakistan And Iran Agreed On Several Measures Related To Security, Cross-Border Terrorism, Smuggling, Human Trafficking, Greater Intelligence-Sharing, Cooperation Between Security Forces And Economic Relations"

"As the dust settles on the events of February [when Iranian border guards were abducted by Pakistan-based militants], ahead of Prime Minister Sharif's visit Pak-Iran relations already appear poised to return to their normal mode of staged cordiality. Most observers see the trip as an opportunity for both countries to step back from the recent strains. Both sides have since taken steps to control the damage. During the [May 5-6, 2014] visit... of Iranian Interior Minister Abdolreza Rahmani-Fazli, Pakistan and Iran agreed on several measures related to security, cross-border terrorism, smuggling, human trafficking, greater intelligence-sharing, cooperation between security forces and economic relations. The two sides also agreed on installing hotlines between the Frontier Corps [paramilitary force in Pakistan's Baluchistan province] and Iranian officials to resolve border- and security-related issues.

"The face-to-face meeting between Mr. Sharif and Mr. Rouhani is also an opportunity for Pakistan and Iran to find creative ways to deal with the impasse over the IP [Iran-Pakistan gas] pipeline. Pakistan is expected to pay heavy penalties by the end of 2014 due to non-compliance with the timeline of the project, unless Iran agrees to waive them. The visit is also likely to provide an opportunity for both important regional players in Afghanistan to sound out each other's position on post-election developments and the post-2014 Afghanistan situation.

"High-profile head-of-state visits have long been part and parcel of the Pakistan-Iran diplomatic tango and have been used to smoothen out fragile relations and maintain the status quo. The prime minister's ... [May 11-12] visit will likely fulfil all the usual expectations. Pakistan's strategic view, however, of its important neighbor remains tied to narrow old frames of competing interests in Afghanistan during the 1990s. Its view of its own geopolitical place in the neighborhood and the wider region similarly remains myopic and tactical.

"Whereas the other smaller Sunni countries in the region such as Oman and the UAE learn to negotiate their multilayered links with Saudi Arabia and Iran, Pakistan finds itself unable to clearly negotiate or maintain a pragmatic balance between its geopolitical strengths and relations with its long-term strategic partners. Pakistan need not be apologetic about its long-term commitment to the integrity and security of Saudi and the Gulf states. Such a commitment, however, must be balanced by fully leveraging its geopolitical realities and expanding its economic, trade and infrastructural connectivity across its land borders, both with Iran and India."

Amir Mir: "[Iran-Pakistan Tensions Were] Caused By The Abduction Of Five Iranian Border Guards From Iran's Sistan Balochistan Region, Allegedly By A Pakistan-Based Sunni Militant Group Called Jaish-ul-Adl"; "Another Militant Group... Which Had Carried Out A Number Of Lethal Suicide Bombings In Iran And Killed Dozens Of The Iranian Revolutionary Guards... Is Jundallah"

Amir Mir wrote in an article published March 31, 2014:[3] "The rising incidents of cross-border terrorism by some Pakistan-based militant groups not only in Afghanistan and India but also in Iran and China, are increasingly bringing Islamabad into conflict with most of its neighboring states. Pakistan's [FATAs or the Federally Administered] Tribal Areas are being blamed for harboring non-state actors by almost all its neighbors, with Delhi, Kabul, Tehran and Beijing expressing concern about the links between global terrorism and sanctuaries located in the lawless regions of the FATAs. Pakistan always condemns these acts of terrorism as a matter of policy, saying they are being committed by non-state actors who are also targeting the state of Pakistan.

"However, the fact remains that the militants groups which are allegedly involved in cross-border terrorism were actually created and nurtured by the Pakistani and the American intelligence establishments to fight out the Soviet occupation forces [in Afghanistan during the 1980s]. The dilemma is that these elements are not only targeting Pakistan's neighboring states today but also Pakistan. In short, the monsters created by the CIA and the ISI have turned against their creators.

"What is alarming is that these jihadis see no end to their anarchist agenda and have stepped up their efforts to bury Pakistan in conflict with its immediate neighbors. The latest escalation in diplomatic hostilities between Iran and Pakistan was caused by the abduction of five Iranian border guards from Iran's Sistan Balochistan region, allegedly by a Pakistan-based Sunni militant group called Jaish-ul-Adl or the Army of Justice. Tehran has alleged that the guards had been taken to Pakistan and are being held in the Baluchistan province [of Pakistan], amid media reports that one of them has already been shot dead. Another militant group allegedly operating from Baluchistan which had carried out a number of lethal suicide bombings in Iran and killed dozens of the Iranian Revolutionary Guards in the past, is Jundallah.

"Expressing indignation at Pakistan for its failure to curb these incidents, Iranian Interior Minister Abdolreza Rahmani-Fazli went to the extent of threatening to send the Iranian troops into Pakistan to secure the guards' release. Following reports that one of the guards has been killed, Iran has closed its borders with Pakistan and all kinds of trade between the two countries will remain suspended for next two weeks. Iranian President Hassan Rouhani telephoned Prime Minister Nawaz Sharif and demanded serious and swift action to secure the release of the abducted guards. Although Nawaz Sharif said the issue was of utmost importance to his government, the two neighbors appear to be on a collision course that will leave bilateral ties severely strained, courtesy the jihadi elements which are misusing the Pakistani soil."

"The Other Neighbor To Complain About Terrorists Being Given Sanctuary On Pakistani Soil Is China, Which Is Disturbed About The Activities Of The Chinese Muslim Rebels"; "For Its Part, Afghanistan Blames Pakistan For Doing Little To Crack Down On The Taliban And Al-Qaeda Militants Who Control ... The Pak-Afghan Border Region"

"The other neighbor to complain about terrorists being given sanctuary on Pakistani soil is China, which is disturbed about the activities of the Chinese Muslim rebels who want the creation of an independent Islamic state in China, and are allegedly being trained in Pakistani tribal areas and then dispatched to Xinjiang province. In July 2012, Beijing publicly claimed for the first time in recent years that those responsible for two bomb blasts in the Kashgar city of the Xinjiang province in July 2011, which killed 18 people, had been trained in the East Turkestan Islamic Movement's camps being run by the Chinese Muslim separatists in Waziristan [i.e. the jihadi stronghold of the Taliban and Al-Qaeda in Pakistan]. The Chinese claim was described in diplomatic circles as a clear sign of the growing impatience of Beijing with Islamabad's failure to control the radical groups operating within its borders.

"The Pak-China tensions rose further following the killing of 15 Chinese in a terrorist attack in the Xinjiang region in February, followed by another ugly episode in March when 30 more Chinese people were killed in an incident of mass stabbing at a train station, allegedly carried out by the Chinese Muslim rebels. But despite repeated assurances to Beijing, the Pakistani authorities have simply failed to uproot the jihadi infrastructure of the Chinese rebels from the Waziristan region. In a rare interview, the Waziristan based leader of the Chinese rebels, Abdullah Mansour, has said it was his holy duty to keep fighting against the Chinese.

"For its part, Afghanistan blames Pakistan for doing little to crack down on the Taliban and Al-Qaeda militants who control a considerable parts of the Pak-Afghan border region especially Waziristan. Despite the deployment of over 80,000 Pakistani troops along the Pak-Afghan border to counter Al-Qaeda and Taliban militancy, the situation is far from stable in the trouble-stricken tribal region, which is crucial not only to Islamabad, but also to Kabul, Washington and Delhi. Afghanistan thus keeps accusing Pakistan of backing the North Waziristan-based Haqqani militant network as well as the Afghan Taliban to advance its so-called geo-strategic agenda in the region.

"It was only last week [late March 2011] that Afghanistan had accused Pakistan's intelligence agency [Inter-Services Intelligence or ISI] of staging a recent attack on a five-star hotel in Kabul in which nine people including foreigners were shot dead by militants. Afghanistan usually speaks of unnamed foreign powers when it wants to hint at a suspected Pakistani role in an incident, but the statement by Afghanistan's National Directorate of Security pointed its finger directly at Islamabad for the most recent attack. But the Pakistani foreign ministry rejected any responsibility for the gunmen who managed to smuggle pistols past the Serena Hotel's heavy security cordon in Kabul on March 28.

"The involvement of Pakistan's non-state actors in terrorist activities across the border in Afghanistan have indirectly affected its relations with the U.S., which has failed to nip the evil of Al-Qaeda and the Afghan Taliban in the bud even a decade after the war against terror was launched. Both Afghanistan and the United States, which is withdrawing most of its troops from the country by the end of the year, have long criticized Pakistan for not doing enough to crack down on militants holed up in the mountains straddling the Pak-Afghan order."

"[Regarding India's Position On Pakistan] The Trial Of The Lashkar-e-Taiba's Chief Operational Commander Zakiur Rehman Lakhvi [Wanted For 2008 Mumbai Terror Attacks] And His Accomplices Is Progressing At A Snail's Pace In Pakistan And Is Not Expected To Conclude In The Near Future"

"As far as the Indo-Pak ties are concerned, the major bone of contention which has also affected the tempo of their composite dialogue, remains the slow-moving trial of the Mumbai attackers who are being tried by an anti-terrorism court in Pakistan. While Ajmal Kasab's trial took four years to conclude and culminated in his hanging on the eve of the fourth anniversary of the 26/11 episode [i.e. November 26, 2008 terror attack on Mumbai], the trial of the Lashkar-e-Taiba's chief operational commander Zakiur Rehman Lakhvi and his accomplices is progressing at a snail's pace in Pakistan and is not expected to conclude in the near future.

"The VIP treatment being extended to Lakhvi by the Pakistan [military-intelligence] establishment can be gauged from the fact that Lakhvi was able to father a child in 2010 despite being behind bars at the high-security Adiala jail in Rawalpindi since his arrest in December 2008.

"One is constrained to point out the pertinent fact that despite becoming an ally of the United States in the war against terror a decade ago, Pakistan hasn't done anything concrete to dismantle the sprawling infrastructure of jihad from its soil. Although over 5,000 security force personnel and over 45,000 civilians have lost their lives in the war against terror in Pakistan, confusion persists on how to tackle the growing threat of terrorism. Many analysts believe that the root cause of Pakistan becoming the center of gravity of global terrorism lies in the fact that the [military-intelligence] establishment had been deeply embroiled with many of the jihadi proxies and used to treat them as the civilian face of the [Pakistani] Army.

"The all-powerful establishment which has ruled Pakistan for more than half of its life and which continues to dictate the foreign policy to the [civilian] government is still accused by the international community of pursuing a policy of running with the hare and hunting with the hounds, mainly because of the fact that it is still not inclined to develop a clear-cut policy against terrorism which is the need of the hour."

Yasmeen Aftab Ali: "Pakistan Has Decided To Support Saudi Arabia In Its Demand To Replace Bashar al- Assad's Regime With An Interim Government In Syria"; "Iran Has Increased The Numbers Of Security Heads At This Border [With Pakistan] Already"

In a May 12, 2014 article, Yasmeen Aftab Ali wrote:[4] "On the eve of United States forces' exit from next-door Afghanistan, Pakistan needs some clear-headed thinking to determine its course of relationships in particular with its neighboring countries. The recent visit of Iranian Interior Minister Abdolreza Rahmani-Fazli to Pakistan and PM Nawaz Sharif's subsequent visit to Iran must be seen in the backdrop of its growing cozy relationship with Saudi Arabia. The latter has recently loaned $1.5 billion to Pakistan 'to help Islamabad shore up its foreign exchange reserves, meet debt-service obligations and undertake large energy and infrastructure projects....' This was not all. On February 18, 2014, Pakistan and Saudi Arabia signed a $183 million credit agreement. One dealt with the construction of a hydro-power project in Chitral, while the other with the import of urea fertilizer from Saudi Arabia. These overtures are being eyed with great unease by pre-dominantly Shi'ite Iran.

"Particularly, Pakistan has decided to support Saudi Arabia in its demand to replace Bashar al- Assad's regime with an interim government in Syria on the same date as the signing of the agreement [February 18, 2014]. Their immediate reaction to signing of the $183 million credit agreement was that on the very same date Iran issued a threat to Pakistan to send forces within its borders should it fail to rescue the five Iranian border guards abducted 10 days prior to these developments, although it is claimed by a local newspaper that they were kidnapped from Iran's Sistan-Balochistan province, adjoining Pakistan.

"Iran has increased the numbers of security heads at this border already. According to a report..., 'Iran's police chief has hinted that his country would seal its border with Pakistan any time. It is very important to ensure security on the eastern border.' (May 5, 2014) There are a number of thorny issues.... The gas pipeline between Iran and Pakistan is one. In my op-ed published December 24, 2013, I had written, 'There could have been many reasons for Pakistan playing coy on the project; or maybe a mix of reasons. First, Pakistan may have dilly dallied owing to the rates at which it would have had to import the gas from Iran even after the project was completed. The rates would have been high. Much higher than the ability of the average domestic consumer to afford.' According to a report by a local newspaper, 'Iran itself imports gas from Turkmenistan at USD 4/MMBtu while the price at which it would export to Pakistan is an exorbitant figure of USD 14/MMBtu'.... Added to this is the fact that Iran herself imports gas; seasonal increases in the demand in winter make it difficult for Iran to supply gas to Turkey as per their needs. 'On October 1, Iranian Oil Minister Bijan Namdar Zanganeh himself raised concern about Iran facing serious gas shortage because of slow progress in raising levels of production from South Pars – the field that is supposed to fill the IP pipeline. If such factors were seriously taken into account, the pipeline agreement would likely have never been signed at the first place....'"

"Pakistan Has To Walk A Tightrope Between Iran And Saudi Arabia"; "India [Is] In A Strong Position For The 'New' Great Game That Is Emerging With A Changed Political Landscape In Afghanistan; Islamabad Fears... That An India And Tajikistan Nexus Will Lead To An Infiltration Via Afghanistan"

"Though Iran and Pakistan have agreed to move ahead on this project during Nawaz Sharif's visit to Iran, offering words to implement the project without taking any steps to do so indefinitely may well raise temperatures. How does Pakistan deflect imposition of economic sanctions by the western countries particularly U.S. if it decides to go ahead is anybody’s guess."

"Another issue of burning importance to Iran will be Syria. In my op-ed dated September 03, 2013 titled, 'Syria and the Greater Iran', I wrote, 'There are the religious-geographic dynamics that cannot be overlooked. Hezbollah and Iran in hands with Alawites of Syria have been aiming at reviving the Greater Iran, keeping in view their own schismatic ideology, the effects of which reflect in the current proxy war in Pakistan. The ... link formed is Hezbollah on one end, Syria and Iraq forming the center with Iran at the other end, converging to solidify a unified religious school of thought. Is the Middle East or South Asia ready for the revival of a Greater Iran?'

"Pakistan has to walk a tightrope between Iran and Saudi Arabia, the former pre-dominantly Shi'ite and the latter predominantly Sunni. Coming back to Afghanistan; Hamid Karzai paid a visit to Iran in December 2013. The visit bore fruit. Both countries signed a 'pact of friendship and cooperation.' This agreement between the countries was not a first in recent times. In 2013 both had earlier entered into a security agreement.... I wrote, 'According to a report 70 percent of media in the country [Afghanistan] today is controlled by Iran. Another report... says Iran spends $100 million a year in Afghanistan, much of it on media, civil society projects and religious schools.... The impact of propaganda and one-sided 'truth' are immense... Iran had supported non-Taliban groups in 1990s and may revert to doing so yet again...."

"Iran is not the only country interested in developing friendlier relations with Afghanistan. India too has invested heavily in Afghanistan. 'India has donated or helped to build electrical power plants, health facilities for children and amputees, 400 buses and 200 minibuses, and a fleet of aircraft for Ariana Afghan Airlines. India has also been involved in constructing power lines, digging wells, running sanitation projects and using solar energy to light up villages, while Indian telecommunications personnel have built digitized telecommunications networks in 11 provinces. One thousand Afghan students a year have been offered scholarships to Indian universities. India has also played a key role in the construction of a new Afghan parliament in Kabul at a cost of $25 million.' (William Dalrymple: a Brookings Essay titled; A Deadly Triangle: Afghanistan, Pakistan & India)

"India has also invested heavily in the Ayni Air Base also known as the 'Gissar Air Base' placed 10km west of the capital of Tajikistan-Dushanbe. Not only this; India also has a foothold on the Farkhor Air Base; a military air base. This strategic base is located near the town of Farkhor in Tajikistan. This is roughly 130 kilometers south east of the capital Dushanbe. Aircraft that take off from Farkhor need literally minutes to be in Pakistan air space. I had written earlier, 'These combined steps places India in a strong position for the 'new' great game that is emerging with a changed political landscape in Afghanistan. Islamabad fears; and for good reason that an India and Tajikistan nexus will lead to an infiltration [military infiltration? unclear] via Afghanistan, using an unprotected western flank that will 'encircle' Pakistan, cutting off oxygen. What Pakistan must do; is to redraw its foreign policy.'"

Graphics courtesy:

M. Ramesh: "Pakistan's Dilemma Is That The Iranian Section Of The Pipeline... Is Mostly Complete, But No Work Has Happened On The 780-KM Segment On Its Own Soil; Incidentally, Pakistan Must Pay Iran A $3-Million-A-Day Penalty If Its Part Of The Pipeline Is Not Completed By The December 2014 Deadline"

In a November 29, 2013 article, M. Ramesh wrote:[5] "Proverbs be damned, let's count our chickens. It is very tempting to entertain hopes that the global deal with Iran will result in the revival of the Iran-Pakistan-India (IPI) gas pipeline project. Every news report in India about the deal with Iran mentions the sighting of the IPI on the horizon. Yet, it actually remains a mirage. Of the two gas pipelines – the Iran-Pakistan-India (IPI) and the [U.S.-backed] Turkmenistan-Afghanistan-Pakistan-India (TAPI) – it is the latter that looked more difficult. The two are not in race as there is room (and need) for both. From the Indian perspective, the IPI passes through one 'difficult' country – Pakistan – but TAPI via two, including Afghanistan. Yet, it is the TAPI that looks closer to reality.

"The reason could be that TAPI is backed by the U.S. to keep Iran out of the oil business. According to former [Indian] Petroleum Minister Mani Shankar Aiyar, the U.S. never pressured India to drop the IPI. Yet, New Delhi decided to back-pedal on the project as it saw a stumbling block in the Iran Libya Sanctions Act, though the law has never been invoked. Due to Iran's isolation, the IPI lost its appeal. The geopolitics has changed, yet the IPI pipeline doesn't look like it's happening. The pipeline passes through more of Pakistan than does TAPI; it runs through the troubled province of Baluchistan. (Some Baluchis feel discriminated against by the Punjabi-dominated administration in Islamabad and are even demanding an independent state.) Pakistan alleges that India covertly supports Baluchi insurgents, which New Delhi denies. In a recent chat, a former Indian diplomat that a Baluchi insurgent leader once gave India a friendly advice to 'keep away' from the pipeline project.

"Pakistan's dilemma is that the Iranian section of the pipeline (over 900 km) is mostly complete, but no work has happened on the 780-km segment on its own soil. Incidentally, Pakistan must pay Iran a $3-million-a-day penalty if its part of the pipeline is not completed by the December 2014 deadline. Pakistan's problem is fundamentally financing the project though there are other issues as well. The recent nuclear deal with Iran might just make funding a wee bit easier, but other factors are in play. For example, Saudi Arabia is not happy about any Pakistan-Iran links. Riyadh has already expressed displeasure over the West's nuclear deal with Iran. Pakistan's Prime Minister Nawaz Sharif has close links to Saudi Arabia, where he spent eight years in exile. India would for sure want a guarantee against disruption of gas supplies, with penalties for stoppage. But Pakistan will find it difficult to vouchsafe this given the troubles it faces in Baluchistan.

"On the other hand, things are not as muddled on the TAPI front. The pipeline's route falls in the Taliban strongholds in Afghanistan as also parts of Baluchistan. However, there are two counterweights. One, India enjoys goodwill in Afghanistan. India has built roads, schools and power transmission lines and even the Parliament building. 'India's aid program to Afghanistan is incredible,' says G. Parthasarathy, a former High Commissioner to Pakistan. 'My Pakistani friends joke that when they go to Afghanistan they introduce themselves as Indians,' he says. Second, Pakistan has tacit equations with the Taliban. Since Pakistan needs the TAPI gas as much as India, Islamabad may be able to prevail upon the Taliban to desist from playing the spoilsport."

Syed Fazl-e-Haider: "A U.S. $1.5 Billion Donation To Pakistan From Saudi Arabia Is Hotly Being Debated In The Country's Parliament, Political Circles And Among The Analysts"; "Saudi Arabia Might Have Persuaded Islamabad To Cancel The Iran-Pakistan (IP) Pipeline Project"

Syed Fazl-e-Haider wrote on March 21, 2014:[6] "A U.S. $1.5 billion donation to Pakistan from Saudi Arabia is hotly being debated in the country's parliament, political circles and among the analysts. The main question being under what deal Riyadh disbursed the crucial amount to help the cash-strapped country make short-term economic gains? What has Pakistan guaranteed or promised to do in return? Many believe Saudi Arabia killed many birds with one stone. Saudi Arabia did what the US could not do to keep Pakistan away from a $7.5-billion gas pipeline project with Iran. In a tit-for-tat deal, Saudi Arabia might have persuaded Islamabad to cancel the Iran-Pakistan (IP) pipeline project, which is vital to end energy shortages that are crippling Pakistan's economy.

"Pakistan's oil minister Shahid Khaqan Abbasi, after receiving funds from Saudi Arabia last month [February 2014], reportedly said work on the pipeline was not possible because of sanctions imposed by the United States and the European Union on Iran over its nuclear program. Iran has warned that Islamabad is contractually obliged to complete the project which would allow Tehran to export gas to its southeastern neighbor. 'Iran has carried out its commitments ... and expects the Pakistani side to honor its own,' Iran's deputy oil minister Ali Majedi was reported to have said.... Financing has been the key issue for Islamabad. Islamabad has so far failed to secure the required funding for the IP pipeline due to the threat of sanctions from the U.S. Pakistan had been asking Iran, China and Russia to fill the finance gap. Ironically, Saudi Arabia's $1.5 billion donation was the amount Pakistan needed to complete the portion of pipeline on its territory. But this donation, or 'gift' as called by Ishaq Dar, Pakistan's finance minister, could not be used to finance the construction of the IP pipeline...."

"Iran and Saudi Arabia have a history of mistrust, posing a serious challenge for Pakistan to maintain a delicate balance in its bilateral relations with both countries. Pakistan Prime Minister Nawaz Sharif has preferred friendship with Saudi Arabia over Iran. He enjoys good and close relations with the Saudi royal family. Last year, former president Asif Ali Zardari inaugurated the delayed IP pipeline on March 11. The administration of [the then Prime Minister] Yousaf Raza Gilani downplayed the U.S. pressure and continued to go ahead with the Iran pipeline project.

"In 2012, Saudi Arabia had offered energy-deficient Pakistan the alternative options to cope with the energy crisis in a move to lull the country to abandon the IP gas pipeline project. A 'special message' about the project from the Saudi king was delivered to Pakistan by Prince Abdul Aziz bin Abdullah, the Saudi deputy foreign minister, in his one-to-one meeting with former Prime Minister Gilani in Islamabad. The Saudi message came at a time when Pakistan had expedited its efforts to strike government-to-government deals on financing its portion of pipeline with Moscow and Beijing, despite stiff opposition from the U.S."

"The 'Timing' Of The Launch Of The Pipeline Project, Which Was Scheduled To Be Completed By ... [December 2014] When The U.S. Is Scheduled To Withdraw Its Forces From Afghanistan, Is A Crucial Consideration"; "The Fate Of IP Pipeline Is Now Uncertain After Pakistan Has Showed Its Reluctance To Go Ahead With The Project"

"The 'timing' of the launch of the pipeline project, which was scheduled to be completed by the end of this year [in December 2014] when the U.S. is scheduled to withdraw its forces from Afghanistan, is a crucial consideration for Islamabad. Washington direly needs Islamabad's support and cooperation in the run-up to Afghan war endgame, and represents a window of opportunity to complete the pipeline project at a time the U.S. would not be in a position to significantly hurt Pakistan's interest. Geopolitically, a major foreign policy challenge for the U.S. was to convince Islamabad to abandon the pipeline without undermining its own interests in Afghanistan.

"The fate of IP pipeline is now uncertain after Pakistan has showed its reluctance to go ahead with the project. The pipeline, which would initially transfer 30 million cubic meters of gas per day, could bail the country out of the acute energy crisis. Under pipeline contract, Pakistan has to pay a penalty of $3 million per day if fails to implement it by December 2014. Pakistan may face arbitration by Iran but believes that it is qualified for a waiver because the IP gas deal with Iran was signed before Western sanctions were imposed on Iran.

"Geopolitics, corporate interests and other shenanigans have produced twists and turns in the pipeline project. It has been strongly been opposed by the U.S., while Russia and China have supported it. India withdrew from the project in 2009 after signing a civil nuclear deal with the U.S. Even as it negotiates a nuclear deal with Iran, Washington has not so far exempted the project from the sanctions. Islamabad took up the issue with U.S. authorities at a meeting on the sidelines of the revised bilateral strategic dialogue in Washington last year. The U.S. however was not convinced.

"Iran in December not only canceled a $500 million loan promised in 2012 with Pakistan for building the section of a pipeline to bring natural gas from Iran, but it also announced that it will demand compensation if Islamabad fails to build the pipeline by end of this year. Iran took a U-turn on the pipeline following the interim nuclear deal with Western powers last year. The U-turn turned the project, once considered an 'energy lifeline' for Pakistan's economy, into a liability. The latest turn, courtesy of the recent $1.5 billion donation from the Saudi Arabia, looks likely to kill the strategically significant project."


[1] (Pakistan), May 12, 2014. The original English of all the articles in this dispatch has been lightly edited for clarity and standardization.

[2] (Pakistan), May 10, 2014.

[3] The News (Pakistan), March 31, 2014.

[4] Pakistan Today (Pakistan), May 12, 2014.

[5] (India), November 29, 2013.

[6] (Hong Kong), March 21, 2014.

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