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Last Updated: Tuesday, 7 June 2005, 16:10 GMT 17:10 UK
Why Pakistan-India pipeline matters

By Mazhar Zaidi
BBC Urdu service

Pipeline
The pipeline could have huge diplomatic ramifications
The agreement between India and Pakistan on a project to pipe gas to India from Iran via Pakistan is being termed by some observers as historic.

Though both countries have as yet only agreed in principle, officials say work on the project could start as soon as within six months.

So why is this pipeline project so important and what does it mean for South Asia as a region?

In a world where politics is increasingly driven by battles for energy resources and everyone seems to be talking about 'pipeline politics,' this project could be vital for the economic prosperity and political stability of sub-continent.

Take-off

In recent years Pakistan's economy has shown signs of improvement. That's thanks mostly to developments post 11 September and Pakistan's role as a front state in the United States' war on terror.

India's Petroleum Minister Mani Shankar Aiyar and his Pakistani counterpart Amanullah Khan Jadoon
The Indian and Pakistani oil ministers are in upbeat mood

The economy of India has been booming for many years now and according to many market analysts it is in a 'take-off' stage and could start influencing the world market in a major way. But despite these improvements, both economies are facing a looming crisis - deficiency of energy resources.

"The Indian economy will not be able to sustain for long if the issue of energy deficiency is not resolved." says M Ziauddin, editor of the Pakistani daily Dawn.

"Pakistan also badly needs additional sources of energy as it can neither afford the costs of further exploration and nor can it fulfil its requirement by any other way."

'Hugely benefit'

Mr Ziauddin believes that the pipeline from Iran will not only provide the much needed boost to the Indian economy but it will also become a source of revenue for Pakistan.

"If without investing much Pakistan can start getting $500m-$600m in annual revenue because of the pipeline, there is nothing like it for Pakistan. It will hugely benefit the economy and resolve the energy crisis also."

The implications of the proposed pipeline are not limited to the economic field.

Analysts believe that the laying down of the gas pipeline from Iran to India will also bring about a new set political rules.

Lahore-based political analyst and writer Khalid Ahmed thinks the proposed project is truly a historic opportunity for both the countries to change the politics of the region forever.

"This is the first time in the history of South Asia that such an occasion has arrived. Pakistan can redefine its identity as a transit state in the region and can pave the way for peace and prosperity." According to Mr Ahmed such a project would go a long way in changing the nature of political relationships in the region.

"Instead of basing its identity on animosity towards India, when Indian economic prosperity will also mean prosperity for Pakistan, things will definitely change." That indeed would be a historic change in relations between India and Pakistan.


SEE ALSO:
India upbeat on Iran gas pipeline
06 Jun 05 |  South Asia
India and Iran in gas partnership
03 Nov 04 |  Business
Iran urges India to back pipeline
27 Jan 03 |  South Asia


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