Saturday, May 3, 2008



In response to an invitation issued by President Mahinda Rajapaksa of Sri Lanka during his visit to Teheran in November,2007. President Mahmud Ahmadinejad of Iran paid a two-day official visit to Sri Lanka on April 28 and 29,2008.

2. Since last year, Sri Lanka has been facing economic difficulties due to the drying-up of economic assistance from countries of the European Union (EU) such as Germany because of what they perceive as the indifferent attitude of the Rajapaksa Government to complaints regarding the violation of the human rights of the Tamils and its refusal to seek a political solution to the problem.

3. Instead of succumbing to the EU pressure on the subject, the Rajapaksa Government turned for increased assistance to other countries such as China and Iran, which did not raise human rights issues as a condition for such assistance. Assistance from Iran was of crucial importance to Sri Lanka because of the Government's inability to pay for its increasingly costly oil imports.The Goverenment of Ahmadinejad readily agreed to provide oil at concessional rates to Sri Lanka and to train a small team of officers of the Sri Lankan Army and intelligence in Iran. It also agreed to provide a low-interest loan to Sri Lanka to enable it to purchase defence-related equipment from China and Pakistan.

4. In addition, it agreed to invest US $ 1.5 billion in energy-related projects in Sri Lanka. One of these projects is for the production of hydel power and the other to double the capacity of an existing oil refinery in Sri Lanka. Work on the construction of the hydel project started during Mr.Ahmadinejad's visit. Iranian engineers have laready been preparing the project report for doubling the capacity of the refinery and for modifying it to enable it to refine in future Iranian crude to be supplied at concessional rates. The existing capacity is 50,000 barrels a day.

5. The interest shown by Iran in Sri Lanka since last year is attributed to its desire to counter the Israeli influence in Sri Lanka and to use Sri Lanka as a base for monitoring the movements of US naval ships between the Pacific and the Gulf. Since Mr.Rajapaksa came to power, the visit of US naval vessels and officers to Sri Lanka has increased. Even before he came to power, Israel had emerged as an important supplier of military equipment, particularly for the Sri Lankan Air Force. The fact that even at the risk of misunderstanding with Israel, Mr.Rajapaksa chose to approach Iran and accepted its ready offer of assistance underlined the serious economic situation in which Sri Lanka found itself.

6. In view of the operation of a NATO Naval task force in the Gulf to provide logistics support to the NATO's military operations in Afghanistan, the officers in charge of Ahmadinejad's security were not in favour of his aircraft flying over the seas on his way to and back from Colombo. They reportedly decided that his aircraft should fly to Colombo over Pakistan and India and use the same route for its return journey.

7. The Iran Air Force has aircraft which can fly directly from Teheran to Colombo without the need for any intermediate halt.However, they are in a poor state of maintenance due to difficulties in procuring spare parts because of the sanctions imposed by the UN and the US against Iran. It was, therefore, decided that his aircraft should stop over briefly in Islamabad on his way to Colombo and in New Delhi on his way back. It is learnt that the initiative for stop-over visits came from Teheran because of considerations relating to the security of Mr.Ahmadinejad's plane.

8. Pakistan, which has not been worried about any adverse reaction from the US, welcomed the proposal and extended to him a high profile welcome while he was on his way to Colombo on April 28.His engagements in Islamabad included separate meetings with President Pervez Musharraf and Prime Minister Yusuf Raza Gilani and a lunch hosted by the Prime Minister. While the local media hype focussed on the reported forward movement in the negotiations for a gas pipeline to supply Iranian gas to Pakistan and India----- a proposal, which has been under periodic discussions since Benazir Bhutto's second term as the Prime Minister (1993-96) withn ups and downs in hype and euphoria--- the real reason for the satisfaction of the Pakistani leadership was the Iranian President's positive response to Pakistan's request for urgent economic assistance.

9. The Pakistani economy has been in a bad shape since the beginning of this year due to shortages of food grains, flour and electricity. The shortages in foodgrains and flour have caused acute economic hardship to the people. The erratic electric supply has affected industrial production,which has also been affected by frequent disruptions in the supply of gas from Balochistan due to attacks on the pipelines from Balochistan to Punjab by the Balochistan Liberation Army(BLA). In response to reportedly desperate requests from Musharraf and Gilani, Mr.Ahmadinejad is learnt to have agreed to supply an unspecified quantity of foodgrains, flour and electricity to Pakistan.

10. On the question of the gas pipeline from Iran to Pakistan, there were contradictory versions of the outcome of the talks despite the orchestrated atmosphere of optimism which Mr.Ahmadinejad himself tried to spread in Islamabad and New Delhi. While the "News" and the "Daily Times" gave an optimistic assessment as if all issues involving India, Pakistan and Iran had been sorted out on matters like price, the transit fee etc during the visit of Mr.Murli Deora, the Indian Petroleum Minister, to Pakistan before the Iranian President's visit, the "Dawn" of Karachi, which is better informed and which has its feet firmly on the ground, gave a more guarded picture. Quoting what it described as "diplomatic observers", the "Dawn" (April 29) said: "Several contentious issues remain to be addressed." It did not specify what were those contentious issues.

11. The 'Hindu" of Chennai was even more cautious than the "Dawn". It reported as follows on April 30,2008: " Foreign Secretary Shivshankar Menon reaffirmed Mr.Ahmadinejad's optimism, but cautioned that a long road lay ahead to ensure that the project was commercially viable, financially acceptable to India and all security concerns were taken care of."

12. There are various dimensions to this castle-building in the air over the gas pipeline from Iran. Among them, the following:

Financial: Both India and Pakistan are reported to have made it clear that Iran has to raise the funds (about US $ 7.5 billion) for the construction of the pipeline. Where is it going to get it when it has been facing difficulty for years in raising in the international market the funds required by it for the modernisation of its own oil and gas industries. The Americans are determined to see that unless and until it winds up its nuclear enrichment plant at Natanz, it is not able to raise a single cent in the international market.

Technical: The proposed pipeline will pass through earthquake prone areas on both sides of the Iran-Pakistan border. Iran does not have the required technology for its construction. Only Western pipeline construction companies and those in Russia and China have it. The Western (including Australian) companies would not help because of the US pressure and the UN sanctions. Russia might help, but would want to be paid for it in cash. China would be prepared to help provided it is paid in kind in the form of a share of the gas to be transported. If Iran agrees to it, it would become a four-party project involving Iran, Pakistan, India and China and the entire proposal will have to be re-negotiated.

Security: The pipeline has to pass through Baloch majority areas on both sides of the Iran-Pakistan border. The Balochs in Iran, who are Sunnis, are being assisted by the Americans through organisations such as the Jundullah to destabilise the border areas of Iran. The Balochs in Pakistan have also risen in revolt against the Government in Islamabad and are fighting for an independent Balochistan. They are demanding that they should also be a party to the gas pipeline project, which will pass through their homeland, and that they should get a share of the transit fee, which Pakistan hopes to get from India.

13. None of these really major issues has so far been addressed. The only issues addressed so far are the price of the gas and the transit fee to be paid by India to Pakistan. These are the least complex and the least difficult of the issues. The above-mentioned issues are much more complex and difficult. Iran, Pakistan and India have been misleading public opinion by creating an impression that just because an agreement has been reached on the pricing and transit fees, the pipeline is for tomorrow. It is not. There is still a long road ahead.

14. Spins, meant to generate an unwarranted atmosphere of optimism, are not confined to the proposed Iran-Pakistan-India gas pipeline. The spins also cover the proposed oil/gas pipeline from Turkmenistan to Pakistan via Afghanistan. Iran is not involved in this project, which has the total blessing of the US. The idea of this project was originally initiated by the UNOCAL of the US in 1994, when Benazir was the Prime Minister. Since then it has been under discussion. After the Taliban captured power in Kabul in September,1996, UNOCAL lost interest in the project. After 9/11, most Western companies lost interest in the project because of the on-going military operations against Al Qaeda and the Neo Taliban in the area. Only the Asian Development Bank (ADB), which is keenly interested in the project, kept the talks going even though there were no takers from major Western pipeline construction companies.

15. In the case of the Iranian pipeline, there is neither money nor construction offers. In the case of the Turkmenistan pipeline,money is available, but concrete construction offers are not forthcoming due to the security situation. As per the current proposal, the pipeline will pass through Herat and Kandahar in Afghanistan to Multan in Pakistan. While the security situation in Herat is improving, that in Kandahar is as bad as ever. Till Al Qaeda and the Neo Taliban are decisively defeated by the NATO forces, this pipeline is unlikely to take off. In response to an invitation from the sponsors, India has also joined this project and Mr.Deora participated in discussions on this project also during his recent visit to Pakistan. The US was also keen that India should join this project as it could provide an attractive alternative to the Iranian pipeline project. When both the projects are struggling to take off, the question of an attractive alternative does not arise.

16. The "Dawn" wrote on April 19,2008: "Pakistan had planned to start work on the (Turkmenistan) project in 2007 and complete it by 2011. But the target was missed. The project is now envisaged to be completed by 2018."

17. India had no difficulty in accepting Iran's proposal for a stop-over visit by Mr. Ahmadinejad to New Delhi. In view of the slowing-down of the operalionalisation of the India-US nuclear co-operation deal due to opposition from the Communists, likely US sensitivities on Iran were not an inhibiting factor in the way of inviting him. However, caution dictated a low-profile visit, which would not be too jarring to the US. While Prime Minister Dr.Manmohan Singh hosted a private dinner for the Iranian President, he avoided any public fraternisation with him similar to the fraternisation which one saw in Islamabad and Colombo. However, the Iranian Embassy in New Delhi succeeded in giving to the visit a higher profile than what the Government of India had wanted. Mr.Ahmadinejad fully utilised his press conference, which was not attended by the Indian Prime Minister, to taunt and ridicule the US as a bully and a decaying power.

18. As one saw Mr.Ahmadinejad doing it, one's mind went back to the period before 2003 when another West Asian leader was using similar language against the US. He and his country paid a heavy price for it. His name was Saddam Hussein.

19. As one witnessed the demeanour and heard the anti-US rhetoric of Mr.Ahmadinejad during his diplomatic foray into South Asia, one got the impression that he feels that he no longer has to fear any US intervention in Iran over the issue of its uranium enrichment project.More by coincidence than by design, two reports, which should be worrisome for the Iranian leadership, came from Washington DC before the diplomatic foray of Mr. Ahmadinejad. First, the US decision to send a second aircraft carrier to the Gulf. Second, a briefing for a Congressional Committee by the Central Intelligence Agency (CIA) on a mysterious bombing of a construction site in Syria in September, 2007, by an unidentified aircaft. The CIA confirmed what was being speculated about since then, namely, that the construction site was destroyed by an Israeli aircraft because it was to be a nuclear reactor being set up by Syria with North Korean assistance.

20. Was it a message to Mr.Ahmadinejad that what Israel did to Iraq by destroying the Osirak nuclear construction site in the early 1980s and to Syria last September, it could do to the uranium enrichment plant at Natanz in Iran. Of course, it won't be that easy. In Iraq and Syria, the Israelis bombed a construction site and not operational nuclear reactors. Natanz is not a project under construction. It is an already constructed and operational set-up located underground. The Iranians feel confident that Israel will not be able to damage or destroy Natanz. Their confidence also derives from the fact that Iran is a much stronger military power than Iraq or Syria and that the US, in their perception, has to depend on Iran for restoring normalcy in Iraq.

21. But the history of Israel shows that when it genuinely fears a threat to it and its people from the potential nuclear capability of an adversary state, it finds a way of neutralising that threat, whatever be the difficulties. Mr.Ahmadinejad's self-confidence may prove to be short-lived. (4-5-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: )