Will Pakistan proceed with the Iran-Pakistan (IP) gas pipeline project or will the government continue to take one step forward, one step back or in effect continue to stall due to United States' pressure which is considered by, government circles as the reason behind the recent withdrawal of a key Chinese financier of the project?
The report on the Parliamentary Committee on National Security (PCNS) notes in the last clause (16) under the last sub-clause (x) that "Pakistan must actively pursue the gas pipeline project with Iran," however few are convinced that this would dictate policy in weeks or even months to come. It is however not yet clear whether the government of Pakistan is using the IP gas pipeline project as a bargaining chip with the US and would quietly shelve it as soon as it gets the deal it wants with the US or whether it is going to proceed with the project irrespective of US opposition.
The US, in turn, has been actively supporting the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project but has been unable to begin implementation due to security issues associated with the pipeline in Afghanistan leading to exorbitantly high-risk costs as well as the failure of the four governments to reach an agreement. However even with the upward revision of gas price by Iran it would cost us 11 dollars per million British thermal unit (MMBTU) while TAPI would cost 13 dollars per MMBTU and poses a greater security challenge given the fact that Afghanistan remains restive.
What does Pakistan want in return from the US for abandoning the IP project? Ideally the government (political leadership as well as the establishment) would want a rather comprehensive range of economic assistance: (i) the disbursement of the 1.5 billion dollar annual civilian assistance pledged under the Kerry-Lugar bill; (ii) prompt payment under the Coalition Support Fund (CSF) without challenging the invoices submitted by the Pakistan military engaged in the war on terror; and (iii) heavy investment in the energy sector in particular to mitigate the loss of gas envisaged under the IP pipeline with a clear preference for a deal on the same pattern as that extended by the US to India. That deal, it maybe recalled, was signed between Dr Manmohan Singh and the then US President George Bush in July 2005 with the objective of enhancing India's production of nuclear power from 4000 MWe (defined as relating to electric power) to 20,000 MWe within a decade. However Dalberg, the firm that also advises the International Monetary Fund and the World Bank, pointed out the prevalence of some obstacles in the speedy implementation of the deal including the fact that US nuclear vendors cannot sell any reactors to India, unless and until India caps third party liabilities or establishes a credible liability pool to protect US firms from being sued in the case of an accident or a terrorist act of sabotage against nuclear plants.
Additionally, the PCNS has recommended that ending drone strikes be linked to resumption of NATO supplies through Pakistan territory. "It needs to be realized that drone attacks are counterproductive, cause loss of valuable lives and property, radicalize the local population, create support for terrorists and fuel anti-American sentiments," Rabbani Chairman of Parliamentary Committee on National Security (PCNS) said but convinced no one that drones would end, for two major reasons. First and foremost, there are statements attributed to President Zardari contained in documents released by WikiLeaks as well as those by senior Pakistani military officials engaged in fighting the Taliban insurgency in the north supporting drone strikes on the basis that they are targeted towards high profile Pakistani Taliban commanders and are beneficial to not only Nato forces across the border but also our forces. The revelation that senior members of the Pakistani executive, including the President and the Prime Minister, would nonetheless continue to harangue the US for the drone strikes publicly was also part of the deal according to WikiLeaks. This view is further strengthened by an obvious fact: Pakistani armed forces have the capacity to down the drones and the fact that they have not done so reflects a civilian-establishment consensus that drones must be allowed to operate.
Secondly, the Rabbani-led committee proposed 35 consensus recommendations to review relations with the US, Nato and foreign policy - 16 main and 19 sub recommendations to review overall terms of engagements with US, Nato, the International Security Assistance Force (Isaf) and the country's foreign policy. One of the main recommendations included "There should be prior permission and transparency on the number and presence of foreign intelligence operatives in Pakistan." This is rather a naive undertaking with no likelihood of implementation given that US and Nato forces believe that Pakistani establishment/intelligence operatives are continuing to provide sanctuaries to the Afghan Taliban and given the thousands of kilometres of a porous border that facilitates the flow of illegals across the border. Thus while the US is heavily reliant on Pakistani whistleblowers to provide targets for drone strikes, yet it is likely that the US would have its own operatives in the field to identify targets and verify their elimination through drone strikes.
The PCNS inexplicably and explicitly recommended: (i) 50 percent of US/Isaf/Nato containers may be handled through Pakistan Railways (PR). Given the state of the PR, weakened by incompetence and serious allegations of corruption, it defies imagination as to why the parliament would support this measure. Critics argue that this was pushed by the establishment in support of the PR, further awarding the contract to the National Logistic Cell (NLC) that technically is not under army control but in reality is. It maybe recalled that NLC has already indicated that it would repair PR locomotives at its own cost and then use half of those to transport US/Isaf/Nato containers to Afghanistan. This plan would give unfair competition to the private sector which is simply unfathomable; (ii) taxes and charges would be levied on these containers. Perhaps the PCNS members have forgotten that the US under the Kerry-Lugar bill is expected to extend 1.5 billion dollars as grant assistance (and not loans payable with interest) for five years and reimburses the cost of our war on terror to the military - amounts in excess of any taxes that would possibly be collected through this.
Greater market access proposed by the PCNS is unlikely to bear fruit and this clause reflects the inability of our parliamentarians to understand that Pakistan-specific market access is not likely under the World Trade Organization rules. Pakistan has yet to get access on humanitarian grounds (linked to the 2010 floods) to the two year long favourable access to European markets for some of our major export items because of WTO rules.
The PCNS recommendation supporting a new fast track process of billings and payments/reimbursements with regard to CSF and other leviable charges is also unlikely to be accepted by the US. The US will, as per its own laws, continue to query bills that are submitted - the major cause for the delay.
The PCNS output in terms of recommendations reflect shoddy workmanship and given that the committee interviewed the Prime Minister, the Foreign Minister and Additional Foreign Secretary, the Finance Minister and Secretary Finance, the Minister for Defence and Secretary Defence, and DG Military Operations it sadly still failed to formulate recommendations reflecting informed judgments.