Prime Minister Mian Muhammad Nawaz Sharif undertook a two-day official visit to the Islamic Republic of Iran on 11-12 May. He met with Iranian Supreme Leader Ayatollah Khamenei and President Hassan Rouhani. Earlier Prime Minister Sharif first visited Iran in 1999.
The visit aims to build trust between the two nations by removing misunderstandings created by the differences on the Iran-Pakistan (IP) gas pipeline project. Both nations have not finally resolved the issue. The visit would improve fractured, strained, and lukewarm ties owing to geo-strategic, political, and economic reasoning.
The history of Pakistan-Iran relations have witnessed upward and downward trends depending upon regional and global politics. The relations remained extremely warm up to the end of the Shahensha Muhammad Reza Shah Pahlavi’s rule. In the latter part, relations witnessed new realities but marred by political and strategic differences. Iran saw Pakistan a pro-American satellite in the region that greatly aligned with Saudi Arabia to oppose Iranian revolution and interests.
Prime Minister Sharif’s visit tended to shun many of these negative perceptions rightly or wrongly attributed. Pakistan needs to re-balance its Middle East policy at a time when the whole region is in turmoil and Pakistan’s needs not to tilt towards any country. Syria is a case in point. While Saudi Arabia wants to dethrone the Bashar al-Assad regime, Iran supports the sitting government in Damascus. Speculation also surrounds Pakistan’s supply of arms to Gulf kingdoms at this critical hour. Some suggest that Pakistan should act as abalancer between Saudi Arabia and Iran. Some border incidents also took place between Pakistan and Iran recently.
Chief Minister of Balochistan, Dr Abdul Malik Baloch, Governor of Balochistan, Mahmood Khan Achakzai, Advisor on Foreign Affairs and National Security, Sartaj Aziz, Special Assistant on Foreign Affairs, Tariq Fatemi, Finance Minister, Ishaq Dar, and Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, accompanied the prime minister.
Enhancing bilateral cooperation, both sides signed as many as nine MoUs. The outcome of the stalled IP pipeline is the most crucial and one has to see how the matter would be finally settled and how Pakistan would avoid penalty under the agreement as repeatedly pointed out by the Iranian side. During the visit, both sides agreed to continue discussions on the pipeline and to some extent, at least, diplomatically eased anxiety spanning over the past many months. It also means that the project is not scraped yet and both sides would try to address concerns and sought out issues surrounding the project including the pricing.
Under the agreement Pakistan was to pay $3 million per day if it failed to build the pipeline by December 2014. Iran has already built 900km long pipeline up to Pakistan’s border. Pakistan has not constructed its 781 km pipeline for strategic and economic reasons. Iran then withdrew its $500 million aid package to Pakistan for violating the agreement. Many speculated that the Saudi aid of $1.5 billion was only offered to Pakistan to abandon the IP project. On the other hand, energy experts say that the cost of the Iran gas is extraordinary high and it would cost Rs 23 per unit to generate electricity that cannot be supplied to the consumers. So they do not favour this costly project. Now many issues will be re-address and hope both countries would find a suitable outcome.
Iran also does not care about US-led geopolitics surrounding the project. Tension has already eased between Iran and the United States. The improvement of Iran’s ties with the United States on the nuclear issue would also improve bilateral ties between Pakistan and Iran. Under these circumstances one has to see which way the project would be decided.
The common border of 805 km between Pakistan and Iran must be streamlined. Both leaders also discussed border security matters and agreed that better border management and improved security measures should be taken into account. Much serious joint counter-terrorism efforts should be beefed up to ensure border security that often results in sectarian terror incidents inside Pakistan and also to prevent militancy. Recently, both countries staged a joint naval drill in the Persian Gulf to promote maritime cooperation. This sent a good message and terminated speculation of negative trajectory of relations.
Both countries also agreed to increase bilateral trade up to US$5 billion. Iran is a good market for Pakistani agricultural produce. A Preferential Trade Agreement (PTA) was inked between the two countries on 1 September 2006 but trade could not achieve desired results because of sanctions on Iran.
Human trafficking, goods smuggling, and narcotics also are serious security and economic issues between the two governments and many committees have been formed to tackle them. Iranian petrol and petroleum products are smuggled in big quantities into Balochistan and then moved to other parts of the country, thus giving a loss to national exchequer.
Pakistan wishes to improve ties with both Iran and Afghanistan. The withdrawal of foreign forces from Afghanistan this year significantly influences ties between Islamabad and Tehran. Islamabad’s non-interference in Kabul would also satisfy Tehran but much more trusted-building is needed on the issue. The cordial ties with China and improved ties with Iran and Afghanistan would allow the Pakistani government to pursue its strategic and economic agenda in the next four years. Hope this ‘new chapter’ of Pakistan’s relations with Iran would cement strategic and economic ties as wished by Prime Minister Sharif.
Views expressed are of the author and do not necessarily reflect the views of ISS or of the Government of Pakistan.
