THE nuclear deal signed between Iran and P5+1 (The US, the UK, France, Russia, China and Germany) on Tuesday (July 14, 2015) promises to lift all the economic and financial sanctions against Tehran after the deal is duly reviewed by the US Congress in two months’ time.
This welcome development is likely to open up attractive economic prospects for Pakistan along with new challenges.
In the immediate run, the construction of Pakistan-Iran gas pipeline, held up for the last three years due to the sanctions, is expected to be completed hopefully without any further delay and start supplying 750 million million cubic feet of gas per day (mmcfd) at highly economic rates narrowing to a significant extent the expanding gap between supply and demand of natural gas in Pakistan that has already reached 2,000 mmcfd.
In the longer term the economic boom that Iran is expected to experience after the lifting of all the sanctions with its oil income shooting up and foreign investments pouring in from the developed world as well as from Russia and China, Pakistan would stand to gain a lot if it were to redesign its economic policies well in time to fit into the economic framework that would emerge in our Southwest neighbourhood.
With Iran in the Southwest on the go, China in the Northeast already booming and India in the East well on the road to being well off, Pakistan located almost right in the middle of the immediate region would perhaps find it almost impossible to remain wedded for long to its long-drawn depressed economic trough.
The $46 billion worth of investment that China has already committed for the China-Pakistan Economic Corridor (CPEC) is likely to pull Pakistan out of its depressed trough in a matter of a decade or so.
However, in order to make the most of this Corridor (which obviously is not being built only to curtail the duration that it takes for China to send/bring goods to/from foreign markets) Pakistan would need to establish normal trading relations with both Iran and India. Otherwise, the chances are the three—China, Iran and India—would go together on their own way to economic prosperity leaving Pakistan by the road-side agonising in its own self-imposed political isolation.
Pakistan won a lot of political brownie points in Tehran by refusing to join the Saudi-led Arab coalition attacking the Zaidi Shitte Houties in Yemen. We must follow it up by catching hold of the Jundullah group and handing it over to Iran or prosecuting its members in our own courts. There is also the possibility that the Jundullah would wither away on its own now that its masters in Washington are trying to establish friendly relations with Iran.
It is also necessary that our borders with Iran are properly monitored to discourage smuggling of oil from our Southwest neighbour which Tehran resents very much. Also this will help curtail the cross-border activities of elements in Pakistan that believe in a distorted version of Islam and want to kill all non-Sunni Muslims.
Pakistan would also need to curb its tendency to play its anti-India games even in other countries. We are likely to meet a highly competitive India in Iran. We should be prepared to meet this competition on economic grounds rather than muddy it with sentiments of political rivalry.
India’s presence in Iran is already substantial because it did not back a number of sanctions. And in a kind of monopoly situation, India was charging very high prices for its essential exports to Iran. But with the lifting of sanctions, India is expected to lose the advantage to other traditional trading partners of Iran in Latin America and Europe. And there would be ample opportunity for Pakistan as well to compete in the market on price and freight.
Those in Pakistan who oppose restoration of normal economic relations with India are only harming our own economic interests. The argument that normal economic relations with India would somehow undermine our Kashmir case is also totally wrong.
Despite India’s illegal occupation of Kashmir, most of the Muslim countries and the members of the developed world have established very cordial economic relations with India. Our closest and all-weather friend China has an annual trade of nearly $100 billion with India. Our other friend, the US too has very close economic relations with India.
Hafiz Saeed of Jamaatud Dawa and people of his ilk like Hamid Gul should be sent to these countries to plead their case against India rather than letting them keep misleading the people of Pakistan into taking positions that only harm Pakistan itself.
The way these people have been trying to stop Pakistan develop normal economic relations with India that all studies on the subject done so far say would benefit Pakistan immensely, it appears as if they are in the pay of RAW that wants to keep Pakistan in a perpetual state of subjugation of foreign masters.
It is time now for our policy makers, especially the security institutions that Pakistan stands to gain a lot by establishing trade and economic relations with India.
We should keep in mind that with the lifting of sanctions India would have easy access to CA through Iran. But our transit route would surely prove more economical for India. And if this route were to be connected to the CPEC, the entire region would benefit immensely with Pakistan reaping the most benefits.
Iran Nuclear Deal —Prospects and Challenges For Pakistan | M Ziauddin