Iran Nuclear deal: Opportunities for Pakistan

By
Arshad Ali Shah

At last, Iran and six major world powers have reached an agreement on the Iran's nuclear
programme on July 14, 2015 in Vienna, the Austrian capital after nearly a decade of marathon
talks. The nuclear deal aims to limit Iranian nuclear activity in return for the lifting of
international economic sanctions. Moreover, the nuclear deal was widely hailed by the
international community including Pakistan because the deal can pave the way for peace and
stability in the region.
For Pakistan, the Iran nuclear deal has created a number of opportunities. Pakistan will now be
able to complete the much debated and awaited Iran-Pakistan (IP) gas pipeline and other energy
agreements that have long been held up because of the international economic sanctions on Iran.
The IP gas pipeline has been under discussion between Iran and Pakistan since 1994. Iran signed
a preliminary agreement with Pakistan in 1995. Later on, Iran proposed to extend the project to
India and also signed a preliminary agreement with the latter in 1999. Later on, India signed civil
nuclear deal with U.S. in 2008 and then withdrew from the project next year under the U.S.
pressure. The U.S. opposed the project and offered assistance to Pakistan for construction of
LNG terminal and importing electricity from Tajikistan through Afghanistan. Despite U.S.
opposition, Pakistan went ahead and signed agreement in Ankara in 2010 with Iran. The work on
laying Pakistani section of the project was officially launched by the Presidents of both Pakistan
and Iran on 11th March 2013.
Iran completed its section of pipeline in 2013 while Pakistan had to lay its own portion by
December 2014. In case of failure, it had to pay daily penalty of one million dollars to Iran until
completion. However, for Pakistan, the U.S. and European sanctions on Iran were the main
obstacles in the completion of the project in time.
Pakistan has made alternative plan with the help of China to avoid penalty and decided to
construct the pipeline from Nawabshah to Gawadar and later on it would be extended to Iran
once the sanctions were lifted. Currently, China is financing the construction of the gas pipeline
from the Nawabshah to Gwadar (about 800 kilometer) and will take about 30 months in its
completion. The remaining 80 kilometer section will be connected to Iran in six months.
Besides IP, Iran has already offered Pakistan 1,000MW for Gawadar and further 3,000MW for
the rest of the country. Energy crisis has badly affected each segment of our society. Pakistan
meets about 49 percent of its energy requirements from natural gas. Therefore, both Pakistan and
Iran should now materialize these projects without any further delay. These projects will not only
significantly reduce our energy crisis but will also further improve regional connectivity.
The lifting of sanctions would also help boost bilateral trade between Pakistan and Iran. The
trade between the two countries had reached two billion dollars before sanctions which came
down to just 300 million dollar. Economists believe Iran's re-entry into global economy would
create business opportunities for both local and foreign investors. Pakistan should seize this
historical opportunity. The major Iranian imports are wheat, semi-finished iron, corn, and rice,
vehicle spare parts while its main exports are crude oil, gas and refined oil. Pakistan is a food-
surplus country with a deficit in fuel while Iran has a surplus in fuel but a deficit in food.
Therefore, there is a potential to meet each other requirements, which will eventually enhance
the bilateral trade between the two neighbouring countries.
For durable peace and stability in the region, Iran should also improve its relations with the Gulf
countries especially with Saudi Arabia. Pakistan’s decision not to dispatch troops to Yemen on
Saudi Arabia’s demand has significantly reduced the Iranian perception that Pakistan is in the
Saudi’s camp against Iran. Pakistan has good relations with both Iran and the Arab world. This is
high time for Pakistan to strike a balance between Saudi and Iran in a way that it does not take
sides with any of them in the conflict in the Middle East. Pakistan should also play a role of
mediator to reduce the trust deficit between Iran and other Arab countries. This move would
likely reduce sectarianism within Pakistan.
The nuclear deal is also likely to provide an opportunity for both Pakistan and Iran to harmonize
their policies in Afghanistan. Prior to 9/11, Pakistan and Iran were in the opposite camps in the
Afghan conflict. Pakistan was supporting the Taliban while Iran along with Russia and India
were with the Northern Alliance. Peace talks have already been started between the Afghan
government and Taliban after thirteen years of Afghan war. In this regard, Pakistan’s role was
hailed by the international community by holding first direct peace talks between the Afghan
government and the Taliban at Murree, tourist spot near Islamabad. As Iran has sufficient
influence in the northern Afghanistan and it can play effective role to bring peace to the warn-
torn country. Both Pakistan and Iran must learn from their past mistakes and they should play
their due role in the stability and prosperity of Afghanistan.
The perception that Nawaz Sharif’s government is more inclined to Saudi Arabia than Iran must
be dispelled now. National interests are more important than government leadership personal
interests. There is no doubt that Pakistan has close economic and political ties with Arab
countries. However, Iran is also our important neighbor country and we can neither alienate Arab
countries nor afford to antagonize Iran. Pakistan should go beyond the IP project and diversify its
relation with Iran. In addition, Pakistan must put its own house in order to maximize the benefits
from the deal. Pakistan must be realistic and avails the opportunities at the earliest that arise after
the deal.

BY
Arshad Ali Shah
M.Phil International relations from Qurtuba University Peshawar
District: Buner ,KPK
Arshadali_buneri@yahoo.com
03449244264