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Obama should have an AfPak dream

United States President Barack Obama’s June 4 speech from Cairo did not contain specifics. Most wise men had underscored that the charismatic statesman should dwell on values rather than wade into the dangerous world of specifics.

Which indeed was the safe route for a great orator like Mr. Obama. Values resonate in his magnificent voice. Besides, grand speeches could hardly be a good platform for policymaking. However, substance, fresh substance, and lots of it — that was what the Middle Easterners impatiently sought to hear. With Levantine wisdom, prominent Arab columnist Rami Khouri wrote as the countdown began for Mr. Obama’s speech: “No offense, but nobody in the Middle East really cares about Obama’s ancestors or youth years, or his views on other religions. What we care about — and what the U.S. President should explain on this trip — is whether the U.S. government believes that habeas corpus and the Fourth Geneva Convention, for example, apply with equal force to Arabs as well as to Israelis.”

Equally, for southwest Asians tuning in to the Cairo speech, the intriguing question was what Mr. Obama would offer by way of renewed momentum to his AfPak strategy, which vacillates between failure and avoidance of failure. What the U.S. desperately needs is a big idea that can propel the AfPak strategy over the stony, steep ridge into the lush green valley that may lie beyond. Cairo could just have been the platform to introduce such an idea.

But it didn’t happen, although the idea exists. The time has come for the U.S. to take a serious look at the grand idea of a natural gas pipeline project, leading from Iran’s gigantic, untapped South Pars fields to Pakistan and on to India and extending through the Indo-Gangetic plains all the way to China’s heavily populated south-eastern provinces.

As Washington’s direct engagement of Tehran gets going after the presidential election in Iran, Mr. Obama will come across a familiar dilemma: How to make Iran a “stakeholder?” Offering delicacies to Iranian diplomats at garden parties on July 4 in the sprawling American chancelleries is one way of doing it; releasing spare parts for Iran Air’s ageing fleet of Boeing aircraft could be another way; or, even the opening of an Interest Section in Tehran. But Iranians are unlikely to be impressed with gestures. Persians traditionally have liked grandiloquent, sweeping conceptions.

No doubt, the moveable feast of U.S.-Iran engagement needs a tantalising appetiser. Iran’s archaic energy sector could just provide the right stuff. Its oil industry urgently needs technology and modernisation. And income from oil is Iran’s lifeline. Its managerial cadres and technocrats have a high opinion of American oil technology. Big Oil needs no introduction to Iran, either. The Chinese would unhesitatingly say this is a “win-win” situation.

Provided, of course, America’s oil majors move in fast. The Europeans are already ahead, so are the Russians. The race for South Pars promises to be a photo finish. As a perceptive American expert put it, the signing event of the Iran-Pakistan gas pipeline project in Tehran on May 24 by President Mahmoud Ahmedinejad and his Pakistani counterpart Asif Ali Zardari “illustrates the obsolescence and, increasingly, the futility of an ‘isolation’ policy that tries to keep Iranian gas locked in the ground.”

Russia’s Gazprom seeks to join the Iran-Pakistan project, no matter the U.S. sanctions. “We are ready to join as soon as we receive an offer,” said Russia’s Deputy Energy Minister Anatoly Yanovsky. But that offer may since have gone to Turkey. Iran is playing for high stakes — not only as an exporter but also as an energy hub that optimally brings into play its unique geographical location overlooking several regions.

According to the Kommersant newspaper, Gazprom can act as a contractor for pipeline construction and as operator of the pipeline even after its completion. Also, Gazprom is keen on access to gas volumes from South Pars which it could then sell to India. Kommersant quoted a Russian official as saying, “This project is advantageous to Moscow since its realisation would carry Iranian gas toward South Asian markets so that in the near future it would not compete with Russian gas to Europe.” In political terms, arguably, there is a lot more to South Pars than highly lucrative business. The Iran-Pakistan pipeline project is one of those rare business deals where geo-strategy comes into play from Day 1. Consider the following.

Making Iran a stakeholder in regional stability will immeasurably strengthen the hands of the U.S. AfPak Special Representative, Richard Holbrooke, when he negotiates a “grand bargain” with Tehran for stabilisation of Afghanistan. Diplomacy gains in momentum when it deals with tangibles.

The Obama administration should also speak to Delhi to shed its misgivings about this project. Delhi is holding back for two or three tenuous reasons at best. One, Indian strategists are wary of a capital-intensive project that includes Pakistan. This is understandable. They say Pakistanis are unpredictable and might cut off gas supplies, which could put in jeopardy the downstream investments in the Indian economy. They say the ground situation in Baluchistan, through which the pipeline passes, is highly volatile. Finally, Indians are ostensibly unhappy with the price structure offered by Tehran. At the back of it all, there are unspoken considerations. Firstly, Delhi is upset that Tehran retracted on a massive gas deal that it thought it had wrapped up in 2004. Secondly, Delhi seems to agonise over what Washington might think if it stepped out of line and dealt with Iran, so long as the U.S.-Iran standoff continued.

But Washington can cut through this seemingly hopeless maze of Indian angst. The Indian strategic community will be hard-pressed to say ‘nyet’ if the U.S. proposes. Therefore, Washington should step forward as the guarantor of an Iran-Pakistan-India gas pipeline project. At one stroke, that would take care of the Indian strategic community’s grave reservations. The American oil companies should participate in the project on the lines Gazprom has offered. In fact, one of the biggest energy markets in the world opens up on the Indian subcontinent in terms of developing a South Asian gas grid, retail trade, petrochemical industry, etc.

China has shown some interest in joining the South Asian gas pipeline project. In business terms, the U.S. has an opportunity to get Iran, Pakistan, India and China on board in one single project. The strategic implications for the U.S. regional policies are also far-reaching. The Cold War experience in the European theatre is that mega pipeline projects acted as a stabiliser in East-West relations. If German policies toward Russia are transforming so visibly today, one principal reason is the bond that ties them together via energy deals. The proposed North Stream gas pipeline may accentuate this trend in German-Russian ties; Russian-Italian relationship gains from the South Stream; and, Russian-Turkish relationship from the Blue Stream pipeline.

The U.S. should factor in the fact that the huge gas pipeline project is the right thing to do for stabilising India-Pakistan relationship and for putting it on a predictable footing in the medium term. The relationship is inherently brittle because it lacks any real content. In the absence of creative content, negative impulses crowd on centre stage, overwhelming the relationship itself and making it quintessentially an affair of perpetual crisis management. Whereas, content engenders mutuality of interests, creates leverages and locks in partnerships. The U.S. regional policies will also stand to gain if India-Pakistan relationship is stabilised and, therefore, Mr. Obama is an interested party.

In the ultimate analysis, the answer to the South Asian region’s chronic instability lies in economic development. An editorial in Pakistan’s Dawn newspaper said: “Fears have been expressed that the turmoil in Baluchistan will threaten the security of the pipeline since a great length of the 1000 kilometres inside Pakistan passes through that province which borders Iran. Islamabad could convert this factor to its advantage if it can ensure that in the construction of the pipeline indigenous labour is hired and the gains of the economic activity generated by projects of such magnitude are focused on Baluchistan for the benefit of its poverty-stricken people.”

According to hearsay, it was to the very same poverty-stricken people of Baluchistan that the troublesome, one-eyed Taliban leader Mullah Omar headed for shelter — and eventual rehabilitation — when he got on to a motorbike and rode into the night, as he hastily fled Kandahar in the winter of 2001. Poverty is the breeding ground for Pakistan’s “Talibanisation.”

The U.S. regional policies must, therefore, refocus. Whereas today India and Pakistan are locked in a futile exercise of “talk-talk,” “fight-fight,” the Iran gas pipeline project offers a third way. Mr. Obama’s appeal lies in his humanism and capacity to sidestep ossified thinking and ignore archaic mindset. Cairo could have been the platform from where he spelt out an “AfPak dream,” to use Martin Luther King’s immortal words.

(The writer is a former diplomat.)

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