March 10, 2011

ENGAGING IRAN : Strategic shift


By M K Bhadrakumar

http://www.deccanherald.com/content/144545/strategic-shift.html

When stakes are high with the templates of geopolitics shifting in West Asia, India has commenced a rethink by touching base with Tehran.

There is surely more than one way to describe the West Asia turmoil. Some call it ‘revolt’, others ‘revolution’ and still others it’s but another ‘uprising’ — and we are delightfully free to choose depending on our point of view. But what is absolutely certain is that the turmoil indeed prompted a thorough rethink within our establishment on Indian regional policies and options in the phenomenally changed scenario. All indications are that the highest level of leadership is conscious of the imperative need of rethink.

No surprises here, actually. India’s stakes are high when the templates of geopolitics shift in West Asia. What pleases the eye most, though, is that the Indian establishment is commencing this rethink by first touching base with Tehran.

When prime minister Manmohan Singh deputed the most consummate diplomat in India’s armoury today to wing his way to Tehran and deliver a personal letter from him to Iranian president Mahmoud Ahmedinejad, it did signify a major initiative in diplomacy. Although national security advisor Shiv Shankar Menon is a self-effacing diplomat by temperament who prefers to accomplish his work quietly without the entanglements of media publicity, much can be gleaned about the range and purpose of his political consultations with the Iranian leadership in Tehran on Monday and Tuesday.

First and foremost, Delhi factors in that the time is overdue to correct the aberrations that somehow crept into the bilateral ties with Iran. Ironically, it needed a robust bout of US pressure on India seeking to curb the latter’s ties with Iran to prompt Delhi to introspect and draw some conclusions about the facts of life.

Towards October-November last year, in the run-up to president Barack Obama’s visit, Washington sought out that India fell in line with the sanctions regime against Iran unilaterally imposed by the US and its European allies — over and above the regime imposed by the United Nations Security Council (which Delhi scrupulously complies with).

The bone of contention was the payment mechanism within the Asian Clearing Union (ACU) that India and Iran traditionally used to clear their bilateral trade transactions. Uncle Sam said, “ACU payments allow Iran to divert Indian monies for unlawful purposes and India would attract American and European reprisal”. Delhi seemingly buckled under pressure although it was patently obvious that the US was crudely attempting to throttle India-Iran trade and economic relationship as a whole. But in life, shock sometimes prompts awakening.

Without ACU mechanism, India’s $12 billion oil trade with Iran (our second biggest supplier) is not sustainable. And India can’t do without Iran’s ‘sweet crude’, either, especially when oil price is galloping, long-term oil agreements are not easily replaceable and spot market is infested by sharks.

Energy security

A recent Chatham House report titled ‘More for Asia: Rebalancing world oil and gas’ underlined that “The oil and gas industry is set to undergo a decisive transition over the next 10 years as global balances of demand and investment shift towards Asia… and such a transition will have major geopolitical implications…. Chinese, Indian and Asian demand must be met from global supplies in order to balance the region’s net deficits.” Common sense suggests that in energy security, Indian and western interests are virtually competing.

India’s energy ties with Iran, unsurprisingly, assume an altogether new meaning. Thanks to the US pressure tactic on ACU, Delhi, overcoming its bureaucratic lethargy towards innovative ideas, was compelled to negotiate a new energy relationship with Tehran. But Iran is one of those strange countries with which business can be developed only within the matrix of an overall political relationship.

Put simply, it’s an ancient habit of the ‘bazaar’. Menon knows it. What probably encouraged him is that despite the breakdown of the ACU mechanism, Iran continued to sell oil to India on deferred-payment basis. Now, somewhere hidden in it was a profound Persian message, which Menon understood.

A curious thing about diplomacy is that it is a seamless process. What began as an urgent search for an alternative to ACU crept towards a survey of the panorama of India-Iran energy relationship and may now be poised to tiptoe towards a long-term partnership in natural gas.

Another curious thing about diplomacy is, as the British heavy metal band Black Sabbath would say, ‘Never Say Die!’ If ever India feels a compelling urge to revert to bilateralism in the normalisation of relations with Pakistan — and Raymond Davis’ solitary confinement in Lahore’s notorious Kot Lakhpat prison is a timely reminder — and if ever we realise that the brittleness of our ties with Pakistan is largely due to our failure to make our western neighbour a stakeholder in friendship, then, we don’t have to go far beyond dusting up the Iran pipeline project.

However, the backdrop against which Menon undertook the strategic mission to Tehran had other brushstrokes, too. Question marks loom large about what lies in the womb of time in Persian Gulf, but Iran’s rise as a regional power has become unstoppable.

Menon told Ahmedinejad:
“New Delhi seeks the establishment of a comprehensive relationship with Iran… Many of the predictions you (Ahmedinejad) had about the political and economic developments in the world have come to reality today and the world order is passing through fundamental changes, which necessitates ever-increasing relations between Iran and India.” Nothing further needed to be said.

(The writer is a former diplomat)

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