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JUNE 27, 2005
A South Asian "Peace Pipeline" India and Pakistan last week firmed up plans for a controversial $4 billion pipeline to transport Iranian natural gas through Pakistan to markets in India. And the U.S. turned up the heat by quietly telling Pakistan -- a major recipient of U.S. military and foreign aid -- that it could risk anti-Iranian investment sanctions if it allowed the project to proceed. To be sure, the U.S. has plenty of reasons to want to keep the heat on Iran. Its anti-American rhetoric, support of terrorist groups, and determination to maintain a nuclear capability mean that Tehran will remain a target of U.S. suspicion for the foreseeable future. But the Bush Administration needs to be more sensitive to the coalescing economic interests of the two South Asian giants in the pipeline deal. India, long friendly with Iran, covets the greater energy security the pipeline would bring. And Pakistan desperately wants the annual transit fees -- up to $600 million -- it would reap from letting the pipeline cross its territory. That's a tempting amount for a poor country -- and a more certain deal than U.S.-supported alternative pipelines from Qatar or Turkmenistan. Washington would be wise to lighten up. Better to court India as a counterbalance to Chinese influence in the region than to alienate it over an energy -- as opposed to a weapons -- deal. And Pakistan's help is still needed in the fight against terrorism. Besides, if the Administration really thinks more trade is a stabilizing influence -- an argument it previously has made in support of its dealings with sometime adversaries Russia and China -- it should work to boost economic interdependence on the subcontinent. If this "peace pipeline" helps to permanently cool historic tensions between a nuclear India and a nuclear Pakistan, it may be worth the risk.  Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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