By Michael Kugelman
Welcome to Foreign Policy’s South Asia Brief.
The highlights this week: Iran threatens Pakistan with penalties for failing to deliver on a cross-border gas pipeline, Indian Prime Minister Narendra Modi visits Brunei and Singapore, and doctors’ protests continue in India after the killing of a trainee in Kolkata.
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Pakistan’s Pipeline Problem
A worker stands in front of a section of a cross-border gas pipeline, in Chabahar, Iran, on March 11, 2013.Atta Kenare/AFP via Getty Images
Iran recently told the Pakistani government that it plans to take Islamabad to an arbitration court in Paris this month for failing to uphold an agreement to construct its part of a cross-border natural gas pipeline, according to Pakistani reports. The project has been delayed for more than 10 years, mainly because of Pakistan’s fears about potential U.S. sanctions.
The ill-fated project, which emerged from an initial 2009 agreement, has become emblematic of Pakistan’s geopolitical and economic struggles and shows how they get in the way of the country’s national interests.
Proponents of the pipeline in Pakistan say that it can bring a steady supply of energy to the country, which faces chronic energy shortages—and at a lower cost than imported oil. Pakistan is expected to deplete its proven gas reserves within 12 years. According to Iran, the pipeline project could supply Pakistan with an estimated 750 million to 1 billion cubic feet of natural gas per day.
While Iran completed its 684-mile portion of the pipeline in 2012, Pakistan hasn’t even begun its 485-mile segment; in February, it pledged to build the first 50 miles, but it hasn’t acquired the land for it. Pakistan has long worried about upsetting its ally Saudi Arabia—a strategic rival of Iran—as well as about the risk of U.S. sanctions. (Washington is a critical source of trade, development aid, and economic support.)
Some of Pakistan’s concerns may have diminished with last year’s Saudi-Iran rapprochement deal. But U.S. tensions with Iran have soared amid instability in the Middle East, rendering a potential U.S. sanctions waiver—which Pakistan hasn’t formally requested—unlikely. U.S. officials have expressed opposition to the pipeline project this year, including on Tuesday, and warned of possible sanctions risks.
Some governments that are close to Washington manage to do business with Tehran without negative consequences, including India, which is developing a port in Iran. But Pakistan is constrained by its geopolitical and economic status: It can’t afford to upset its top partners because it has relatively few close friends, and its limited global clout means that it often doesn’t get concessions like sanctions waivers.
Furthermore, Pakistan’s economic vulnerabilities make it deeply dependent on foreign sources of financing, such as from the International Monetary Fund, and it can’t afford to jeopardize access to such financing. Pakistan can only dream of the kind of foreign-policy autonomy enjoyed by India—a more influential country on the global stage with fewer economic dependencies abroad.
These limitations also preclude Pakistan from securing external financing for the gas pipeline. It has few partnerships with capital-rich countries that are willing to shrug off U.S. sanctions risks. China is reluctant to make new investments in Pakistan due to economic and security concerns, while Russia—which began selling oil to Pakistan last year—faces its own economic problems from its war in Ukraine.
But for Pakistan, backing out of the project risks high costs that it can’t afford. In a worst-case scenario, Pakistan could be slapped with penalties as high as $18 billion for not completing the project. In recent days, Islamabad said negotiations are underway with Tehran to reach a workable solution.
This presents Pakistan with an opening for a graceful exit. It shouldn’t negotiate for more time: Pakistan has already received 10 years of extensions, and it likely won’t get more. A better bet would be negotiating a lower penalty that Pakistan can afford and simply moving on. There may be cheaper immediate-term options elsewhere, such as gas contracts from Qatar.
Islamabad could also circle back to Tehran later—if fears about U.S. sanctions ever abate. For now, the pipeline project offers a cautionary tale for Pakistan: that it can’t capitalize on an opportunity to strengthen energy security if it bites off more than it can chew.
What We’re Following
Modi in Brunei and Singapore. This week, Narendra Modi became the first Indian prime minister to make a bilateral visit to Brunei. (A few others, including Modi’s predecessor, Manmohan Singh, have traveled there for multilateral conferences.) Modi was in the country on Tuesday and Wednesday before traveling on to Singapore—a visit that comes after a trip last week from a high-powered Indian ministerial delegation.
Modi’s Southeast Asian stops reflect two types of Indian diplomatic relationship. That with Singapore is strategic and includes extensive trade—like India’s partnerships with the United States, France, Japan, and Australia or its friendships with Russia, Israel, and Egypt. In Singapore, Modi’s visit is expected to focus on a range of forward-looking issues, including semiconductors and digitization.
By contrast, India’s ties with Brunei are long-standing—but not that deep. Although there are key areas of cooperation, including space, others are relatively underexplored. This puts Brunei in the category of countries that India is keen to scale up ties with. New Delhi seeks to position itself as an advocate for the global south. In Brunei, India hopes to strengthen relations to showcase its commitment to the eastern Indo-Pacific region.
Doctors’ protests continue in India. Protests continued this week in India, mostly in Kolkata, nearly a month after the rape and killing of a trainee doctor at a medical college in the city. On Monday, the former head of the hospital, Sandip Ghosh, was detained on corruption charges; he stepped down from his post soon after news of the killing broke. Protesters, meanwhile, have demanded that the Kolkata police commissioner resign.
On Tuesday, the West Bengal state legislature unanimously passed a bill requiring life imprisonment for convicted rapists and the death penalty for rape that results in the victim’s death or a vegetative state. But such changes are unlikely to end the demonstrations. The protesters have a long list of demands, including a transparent investigation into the case and further measures against the police.
Floods add to Bangladesh’s woes. It has been nearly one month since an interim government took office in Bangladesh in the wake of Prime Minister Sheikh Hasina’s resignation under pressure. The government faces a raft of challenges, from restoring law and order to initiating institutional reforms. Floods—an all-too-familiar occurrence—are the latest urgent priority.
Monsoon rains have fueled the worst floods in eastern Bangladesh in 34 years, affecting 5.6 million people, according to UNICEF. The extreme weather comes after a cyclone in May.
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Under the Radar
A detailed Kathmandu Post report this week reveals that at least 40 Nepali citizens have been confirmed dead while fighting for Russia in Ukraine since the start of the war. The toll could be higher: Citing Nepal’s embassy in Moscow, the report says that DNA tests are now underway for more than 50 Nepalis believed to have been killed in total.
Nepali government data shows that 174 other citizens have returned from Russia since the full-scale invasion of Ukraine, many of them wounded. Most of those recruited did not know they would deploy to the battlefield immediately.
Earlier reports showed that Russia had enticed Nepalis with generous salaries and the promise of Russian passports—attractive incentives in a country with high poverty rates and low global passport mobility. But the Kathmandu Post report includes the first detailed official figures about the extent of Nepali involvement in Russia’s war in Ukraine.
This story has played out elsewhere in South Asia, but the trend appears to be playing out on a larger scale in Nepal. Beyond the official figures, civil society leaders have said that around 2,000 families in Nepal had loved ones in Russia that they had lost contact with or who they were trying to bring home. Earlier reports estimate that as many as 15,000 Nepalis may have gone to fight for Russia.
Michael Kugelman is the director of the South Asia Institute at the Wilson Center in Washington.
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