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Friday, March 26, 2010

US dangles Pakistan a carrot

By Syed Fazl-e-Haider on Asia Times

KARACHI - In 2008, after several years of negotiations, nuclear-armed India and the United States signed a civilian nuclear deal that in essence allowed India access to civilian nuclear technology and fuel from other countries even though it is not a signatory to the nuclear Non-Proliferation Treaty (NPT).

Pakistan, which like its neighbor India has a nuclear arsenal and is not a signatory to the NPT, has long been rankled by India's deal, wanting one of its own with the US. This topic featured high

on the agenda of a top-level Pakistani delegation that held talks in Washington this week with senior US officials, including Secretary of State Hillary Clinton.

Washington, with some reservations, has been receptive to Pakistan's wishes, especially as Islamabad has emerged as a key strategic partner in the efforts to bring the war in Afghanistan to a conclusion, and in dealing with al-Qaeda and militancy in general in the region.

There will be a price: the US, according to analysts who spoke to Asia Times Online, wants Pakistan to walk away from the Iran-Pakistan gas pipeline project.

Last year, Islamabad and Tehran finalized a US$7.5 billion deal to transfer gas 2,775 kilometers from fields in Iran to terminals in Pakistan, and this month they signed an operational agreement on the project, despite US opposition.

The US, as it seeks to isolate Iran and impose sanctions on it over Tehran's nuclear program, is a vocal critic of the pipeline project, which was initially to have included a third leg going to India. India dropped its participation in the project, ostensibly over pricing disagreements; there is widespread belief that it did so to secure the nuclear deal with the US.

This, according to analysts familiar with the project, is the dilemma that Pakistan now faces. In recent months, there has been talk of the pipeline being extended to China; that would be a non-starter should Pakistan pull out.

The two days of talks in Washington concluded on Thursday. All that Foreign Minister Shah Mehmood Qureshi said was that his delegation had had "very satisfactory" talks with US on civilian nuclear cooperation.

"I am quite satisfied with the discussions we had," Reuters quoted Qureshi as saying. "We have to modernize and tap on indigenous resources like hydro[electric power], coal. We have to bring in renewables - solar, wind - and we also have the capability of producing nuclear energy and we are doing it."

Clinton was quoted as saying, "We are certainly looking at it [nuclear deal] as how to help Pakistan with its long-term energy needs."

Washington's reservations over a nuclear pact center on lingering concerns over security in Pakistan. The founder of Pakistan's nuclear program, Abdul Qadeer Khan, several years ago confessed to playing a role in nuclear proliferation. In 2008, Khan, who remains under house arrest, recanted these confessions. The US is also aware that any deal with Pakistan would upset India.

Pakistan faces daily blackouts, and a power shortfall estimated at 5,000 megawatts (MW) weighs heavily on the economy. Ahead of this week's talks, Islamabad drew up a 56-page report in which it sought US support in developing a civilian nuclear program. The US earlier agreed to provide $125 million for energy development and assistance in establishing three thermal power plants.

Analysts see a major role for the US in rehabilitating the energy sector, as the US could engage international financial institutions, including the US Trade and Development Agency, the International Monetary Fund, the Asian Development Bank and World Bank, together with the US's private sector.

If the US and Pakistan do go ahead with a nuclear deal, it would still require consensus approval from the 46-nation Nuclear Suppliers Group (NSG) and also from the US Congress - this turned out to be a lengthy process for the Indians.

China this week reacted cautiously to reports that the US was open to help Pakistan tap nuclear energy. "We believe that sovereign countries have the right to peacefully use nuclear energy with adequate safeguards," Pakistan Press International reported a Chinese Foreign Ministry spokesman, Qin Gang, as saying in Beijing.

China has assisted Pakistan in developing facilities for nuclear power generation since 1986, when the countries signed a comprehensive agreement for nuclear cooperation that envisaged the supply of power plants and cooperation in the research and development of commercial and research reactors. Under an agreement signed in 1990, China helped Pakistan in the construction of a 300 MW reactor in Chashma, Punjab province, which went into operation in 1998. The Chashma-1 plant has delivered full power of 300 MW to the national grid since September 2000.

In December 2006, a much-awaited agreement on Chinese assistance to build more nuclear reactors in Pakistan was not signed during President Hu Jintao's visit to Islamabad. Though Beijing had agreed to provide two more nuclear power plants, worth about $1.2 billion, China apparently succumbed to pressure from either the West or the NSG. Beijing shelved the project without comment.

At present, China-Pakistan nuclear energy cooperation is mainly focused on the Chashma Nuclear Power Plant-2 in Punjab. The 325-MW capacity facility is being built in collaboration with China National Nuclear Corporation and is likely to be completed by the end of this year.

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