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Wednesday, 28 August 2002

INDIA AND THE POLITICS OF THE TRANS-AFGHAN GAS PIPELINE

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By Aftab Kazi and Tariq Saeedi (8/28/2002 issue of the CACI Analyst)

BACKGROUND: The first Trilateral Steering Committee meeting of Afghanistan, Pakistan and Turkmenistan, to implement the intergovernmental Agreement on the Construction of Trans-Afghan gas pipeline was held in Ashgabat, July 9-10. It was welcomed by the American Deputy Chief of Mission and officials of the Asian Development Bank who participated in the meeting as observers.  The ADB has agreed to invest in the feasibility study and to provide between 2 to 3 billion dollars for pipeline construction from Turkmenistan's Daulatabad gas fields to the Pakistani port of Gwadar across Afghanistan.

BACKGROUND: The first Trilateral Steering Committee meeting of Afghanistan, Pakistan and Turkmenistan, to implement the intergovernmental Agreement on the Construction of Trans-Afghan gas pipeline was held in Ashgabat, July 9-10. It was welcomed by the American Deputy Chief of Mission and officials of the Asian Development Bank who participated in the meeting as observers.  The ADB has agreed to invest in the feasibility study and to provide between 2 to 3 billion dollars for pipeline construction from Turkmenistan's Daulatabad gas fields to the Pakistani port of Gwadar across Afghanistan. While Japan and some ASEAN member states have already expressed an interest to import Turkmenistani gas in liquefied form, ADB is confident that more investors, including India would be encouraged to participate in the Project. Despite India's ruling Bharatya Janata Party's constantly changing positions on the pipeline and reservations about importing gas through Pakistan, this has been the first time that an Indian official has formally acknowledged an interest.  "Not only are we interested in the Project but we shall also do all we can to lend a helping hand toward this Project", said Ambassador M.N. Roy of India in Ashgabat on July 24. However, given the India-Pakistan border tensions and contradictory statements by Deputy Prime Minister L.K. Advani that India is in a state of war with Pakistan, the actual interest of India in TAGP must be taken with caution at least for the time being. Such hostile statements coupled with the August 22 air and land assault by India on Pakistani Administered Kashmir may lead to a change in Pakistan's hitherto unconditional policy on gas transport to India through TAGP or even the alternately proposed Iran-Pakistan gas pipeline. In that case, the hopes that the great role TAGP might play in strengthening regional cooperation is likely to suffer at least in South Asia, perhaps causing delays in gas supplies only to India, if not to the Southeast Asia or Japan.

IMPLICATIONS: At least since 1991, various Indian leaders have realized that their long-term trade interest in Central Asia and supplies of its natural resources to India would not be possible without Pakistani cooperation. In various high-level meetings, particularly the Nawaz-Vajpayee Lahore and Vajpayee-Musharraf Agra Summits, leaders of both countries have agreed, at least informally, that the mutual interdependence ensuing from re-connecting links to the traditional silk routes and construction of oil-gas pipelines from Central Asia to India through Pakistan are likely to create a conducive atmosphere, enabling both countries to peacefully manage, if not totally resolve their traditional problems. As such, various Pakistani leaders over the last ten years have unconditionally offered electricity (from Tajikistan) and other oil-gas transit routes for India. However, BJP theoreticians, amid the Party's struggle to revive its electoral image appear bifurcated between the conservatives and relatively moderates. The Party line divide appears to have become serious after the Agra Summit, when BJP conservatives openly started attacking the viability of India-Central Asia trade and gas transit routes via Pakistan. BJP conservatives have tried every possible alternate to avoid the Pakistani route, albeit without success. Even the recent proposal on Russia-China-India gas pipeline publicized through India's Oil and Natural Gas Corporation-Overseas was found infeasible. Geopolinomical factors prevailed. While the post-September 11 anti-terrorism world political equation may appear to have brought India and United States closer in some areas, it appears to have compounded India's domestic political problems in Gujarat and Kashmir as well.  Electoral image problems leading to border tensions with Pakistan have further distanced the urgently needed gas transition routes. On the one hand, India's foreign exchange reserves have reached approximately US$63 billion, on the other hand, it cannot avail the opportunity to satisfy its increasing gas and energy demands. Currently, India consumes approximately 26 billion cubic meters (bcm) of natural gas annually, not enough to meet the mammoth economic needs and is running at a gap of 6-8 bcm between demand and supply.  According to the US Department of Energy estimate, India, which is the home of 20 percent humanity, will need 37 bcm by 2005 rising to 51 bcm by 2010, and 145 bcm by 2025. Should the gas supplies be easily available, the natural gas demand in India could be as high as 77 bcm by 2010.  Lacking sufficient natural gas reserves of its own, on the one hand, India's national interest necessitates gas, on the other, domestic party politics tend to hinder the most economically feasible supply options. Under present circumstances, it appears that even the Steering Committee of TAGP has considered constructing the pipeline initially up to Gwadar. It will consider the extension of this pipeline to India via Multan, Pakistan, once the Indian political leadership would demonstrate the acceptance of new actual gross root geopolitical realities and normalization of India-Pakistan relations in that regard.

CONCLUSION: The TAGP seems to have attracted worldwide interest. Obviously, Ambassador Roy has translated the Indian national interest in his statement, while the present policy of the BJP government under heavy domestic political pressures explains differently "between the lines". Moreover, some Central Asian diplomats hold the view that TAGP may not materialize unless Russia is offered some stakes in the Project. Russia's interests in the region can be complex. Nevertheless, given the Russia's emerging engagements in Eurasian affairs and a direct interest in the construction of Iran-Pakistan pipeline might have substituted. At this stage, it appears unlikely that India would be able to convince Russia projecting delays in TAGP construction.  Briefly, TAGP construction is likely to continue without Indian participation. By the time the pipeline would be in place, India would need 11-14 bcm of additional gas to meet its growing requirements.  An earlier participation by India would not only help solve this problem but it will also create a new chapter of interdependence in India-Pakistan relations.

AUTHORS' BIO: Professor Aftab Kazi is a researcher at the Central Asia-Caucasus Institute, SAIS, Johns Hopkins University and Institute of Political Science, Leipzig University. Mr. Tariq Saeedi is a journalist based in Ashgabat, Turkmenistan.

Copyright 2001 The Central Asia-Caucasus Analyst. All rights reserved.

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