The Telegraph
Since 1st March, 1999
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Atal Bihari Vajpayee’s done it again: one more diplomatic booboo. The Republic Day visit of President Mohammad Khatami of Iran is a golden opportunity to put behind us our energy problems. Instead, Vajpayee’s Bharatiya Janata Party-led National Democratic Alliance government has decided that it is much more important to make Pakistan-bashing the surrogate for Muslim-bashing in India. So, no effort was made towards positioning India in order to grab the Iranian offer of natural gas to break out of the energy trap, which is the single most important reason for our lagging so far behind China.

For make no mistake about it, what has pushed us behind southeast and east Asia since the mid-Seventies is the oil “shokku” of 1973, when the Arabs avenged their defeat in the Yom Kippur war with Israel by pushing oil prices through the roof. Petrol till then was so cheap that no city driver ever had to shell out more than Rs 500 a month for all the miles he wished to drive. The minute the Organization of Petroleum Exporting Countries was cartelized by the Arabs, reinforced by that other cartel, OAPEC (which is OPEC with A for “Arab”), it was the availability or otherwise of domestic sources of oil that determined the pace of development.

China is self-sufficient in oil. India is not. Malaysia and Indonesia are oil exporters. India is an oil importer. The massive foreign exchange bonanza which the oil price hike of the mid-Seventies gave Malaysia and Indonesia was what kick-started the Asian “miracle”. For its part, China became a land of cheap fuel — and that was a key reason for its attraction as an investment destination. The oil prices hike did make Bombay High economically viable, but not until the recent discoveries in the Godavari basin has there been any significant augmentation in domestic oil supplies. Meanwhile, the hyping of growth rates since the Eighties has exponentially increased our thirst for oil. Our two major suppliers till the Nineties, the Soviet Union and Iraq, have gone under. We are thus the most energy-starved nation per capita in the world in relation to our energy requirements.

Pakistan is almost in as bad a way but has Sui gas to help it pull through. Also, with the Pakistani economy stagnating at the Hindu rate of growth — 3 per cent to 3.5 per cent — the increase in Pakistani demand for energy is simply not comparable to India’s. Bangladesh is, of course, the worst dog in the manger. It sits on a lake of natural gas that it cannot use but refuses to reduce its humungous trade deficit with India by exporting natural gas to us. Immiserizing India is, alas, a higher priority for Bangladesh than enriching themselves. Talk of cutting your nose to spite your face!

Any responsible government of India would regard the energy problem as India’s priority number one and orient diplomacy towards so solving our energy problem as to place our economy on par with China and southeast Asia. The solution was suggested at least as far back as 1996 by Vijay Kelkar, now chief economic adviser to the finance minister, Jaswant Singh, in the Lovraj Kumar memorial lecture he delivered in that year as petroleum secretary. He pointed out that owing to changing technology, it was not oil but gas which would drive growth in the 21st century. In a memorable aphorism, he said what oil was to the 20th century, gas would be to this century.

The biggest gas lake in the world is in Turkmenistan. Not heard of it' Well, the Americans certainly have. So, Bechtels, the giant US energy corporation, staked a claim to tap Turkmenistan gas and transport it to the warm waters of the Indian Ocean through Afghanistan and Pakistan. They did this at the lowest point in US-Afghanistan relations: the take-over of Afghanistan by the taliban. There seemed at that stage no prospect whatsoever of converting that pipe dream into a pipe-line. And sure enough, 9/11 happened; Osama bin Laden was bombed out of Afghanistan; and the Americans set up an American satrapy in Kabul. Pakistan proved an avid ally in the destruction by the United States of America of what Pakistan had helped the taliban build. Bechtels, backed by a US military base in Turkmenistan itself, now have absolute right of way to pump out all the gas they want and throughput it via Afghanistan and Pakistan to a port on the Arabian Sea — probably Gwadar in coastal Baluchistan, which Pakistan bought from Oman in the Fifties — and from Gwadar out to the glorious West. As for India, illai, illai, illai — unless we stop Paki-bashing and start dealing in a mature way with Pervez Musharraf and his successors in our national interest.

But possibly not even then. For who can be certain that Pakistan will want Bechtels to help India out by putting in a branch line from Peshawar to Amritsar' And being a monopoly supplier who believes in the market maximizing its profits, why would Bechtels miss the opportunity of taking us to the cleaners' So, is there an alternative to Bechtels and Turkmenistan' Yes, there is — and it has been staring us in the face for the best part of a decade: Iran.

The only source of natural gas comparable to Turkmenistan is Iran. And the Iranian president is here in India. But instead of getting on with the proposal to pipe Iranian gas to India, Atal Bihari Vajpayee confines himself to yet another pompous new declaration on fighting terrorism. The catch, of course, is that Iranian gas can enter India only through Pakistan. (The sea-bed route is sci-fi). For the Vajpayee government, Pakistan is anathema. So, in a move that quite matches the Bangla-desh dog-in-the-manger attitude, Vajpayee is denying India cheap gas only to poke Pakistan in the eye. What we fail as a country to comprehend is that Pakistan’s need for Iranian gas is quite as acute as ours. Unfortunately for the Pakis, the consumption capacity of Pakistan is too low to make it worth the while for the Iranians to make the fabulous investments called for in pumping out the gas and then pumping it out overland. It is only if India is the end-destination that the investment becomes profitable. So, Pakistan cannot get the gas it desperately needs unless the Indian market too is served by the same facility. That is the single biggest guarantee that Pakistan will not throttle the pipe-line. If Pakistan were to deny Iranian gas to India, the immediate consequence would be that Pakistan would be deprived of gas from the same source.

Please ask yourself another question: since any throttling of Iranian gas supplies to India would cause immense economic loss to Iran, why would Iran acquiesce in Pakistan avenging itself on India at Iran’s expense' Mammon would overcome Islamic solidarity — and in any case, there is little love lost between Iran and Pakistan on theological questions: Iran is Shia and Pakistan is not only largely Sunni, it has the worst record in the world of Sunni-Shia rioting.

Thus we have the curious spectacle of Pakistan being desperate to provide pipe-line transit facilities to India and Iran being most keen on selling its gas to both Pakistan and India, but India behaving like a little child refusing to go out and play in the maidan because the Pakistan bully is waiting there to wallop us.

Jaswant Singh ought to know better. For when he was an ordinary back-bench member of parliament like me, the two of us constituted the Indian contingent in an India-Pakistan Track-II endeavour to work out a formula for ensuring the security of supplies of Iranian gas to India via Pakistan. The group produced a unanimous report, and Jaswant and I went for a formal meeting with the foreign secretary, then Salman Haider, to present our findings and solemnly urge the government of India to do the sensible thing and get on with the pipe-line. But the government of India then was H.D. Deve Gowda’s. So, Jaswant was incandescent as a fire-fly in the night. Now the government is Atal Bihari’s and so the light has gone out of our lives; Paki-bashing takes precedence over helping ourselves. How stupid can we get'

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