Resource dilemma…Umer Farooq
PAKISTAN has turned to two US law firms to fend off Tehran’s penalty claim over the delayed gas pipeline project with Iran. Does this sound familiar? It should if we recall Reko Diq. Just recently, Pakistan settled a lawsuit with Barrick Gold over the Reko Diq mining project. And here we are again, staring down the barrel of another costly legal showdown — estimated around $18 billion.
Pakistan’s most profound lesson from history may be this: it seldom truly learns from it. The same mistakes are replayed like a broken record. The past seems to hold wisdom, but for some reason, we don’t heed it, and then arrive at a point when the world’s courts have to chase us down. Action only begins when a summons arrives — until then, we’re content to sit back and watch.
Pipelines have become synonymous with anti-climate pursuits, often cutting through indigenous lands and infringing on land rights. But the Pakistan-Iran gas pipeline isn’t just about energy; it’s a display of global power dynamics. Here, geopolitics takes centre stage, overshadowing environmental concerns and indigenous rights.
In 2009, Islamabad inked a deal with Tehran to import up to a billion cubic feet of gas daily via a cross-border pipeline. Fast forward to 2024, and Pakistan has yet to lay a single pipe on its side. The reason? Ostensibly the fear of American sanctions. Iran, having completed the pipeline at its end, is demanding that Pakistan fulfil its commitment or face a hefty $18bn penalty. In response, Pakistan has enlisted two US-based law firms to defend its inaction. This legal manoeuvring underscores a decade of missed opportunities and geopolitical hesitations. As energy shortages persist, one wonders when Pakistan will move beyond excuses and pipelines on paper.
The US threat of sanctions over this pipeline project with Iran is a reminder of Western influence dictating local energy choices. Pakistan faces a massive gas supply-demand gap that is only growing wider. This cross-border pipeline could deliver up to a billion cubic feet of gas per day to an energy-starved nation, which is desperate for relief.
The winds of change are blowing, and America is set to have a different administration; however, its Iran policy may remain unchanged or even take a harsher turn compared to the one under the Biden administration. Hence, expecting a different stance from the US on the Iran-Pakistan pipeline is not realistic.
As the global balance shifts from West to East — despite the election of Donald Trump as the next US president — the rules of the power game are bound to change. Western hegemony is on the decline. Pakistan — and many other countries — may no longer have to navigate their energy needs under the shadow of Western power. This transfer of power will not only alter the way international challenges are addressed but will also redefine the very nature of those challenges.
Pakistan has come to realise its potential in abundant natural resources and the pressing need to meet its own energy demands independently. Yet, we still lack effective policies related to the resources management, be it exploration or import of resources. For a country of our size, meeting energy demands requires solid, well-thought-out plans. Major decisions must account for global consequences. Poor management will leave us vulnerable to court battles. In a dollar-starved economy, we cannot afford to waste taxpayer money on lawsuits.
With Trump’s re-election, Pakistan faces even greater urgency in addressing the pipeline issue. We must anticipate a hard-line stance from the new Trump administration, which is likely to increase the pressure on Pakistan to abandon projects that involve Iran, thus raising the stakes for our economy. Avoiding costly fines and tensions with Iran requires immediate action.
Pakistan should explore alternative financing and partnerships for its energy projects, ones that align with global dynamics yet meet our critical energy needs. By resolving this quickly, we can protect our economy from punitive measures and redirect funds to essential sectors rather than legal battles.
Looking forward, Pakistan needs a strategic, long-term approach to energy and resource management. This means establishing policies that leverage our natural resources sustainably while remaining adaptable to geopolitical shifts. Developing our domestic infrastructure for energy independence, coupled with smart international alliances, will better position Pakistan to navigate external pressures without compromising on economic sta-bility. It is time to prioritise a resilient energy strategy that safeguards the country’s future.
Courtesy DAWN