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No Security, No Trans-Afghan Pipelines

Afghan Magazine

By M. Ashraf Haidari

July 2004

"The players in the game of pipeline politics must remind themselves that peace can bring a pipeline, but a pipeline cannot bring peace." -- Robert E. Ebel, Director of Energy Program at the Center for Strategic and International Studies (CSIS).

SUMMARY

Since the ousting of the Taliban in Afghanistan, international interest has reemerged to revive the Turkmenistan-Afghanistan-Pakistan gas pipeline project. Although the Unocal Corporation initiated the project in the mid 1990s, the project was shelved due to the Al-Qaida's terrorist attacks on the US Embassies in Africa and increasing instability in Afghanistan, where the Taliban harbored the Al-Qaida. This article studies what policy lessons can be learned from the failures of the mid 1990s in order to avoid past mistakes regarding the trans-Afghan pipeline. In addition, the article argues that the future security and realization of a trans-Afghan pipeline depends on the long-term American commitment to the reconstruction of Afghanistan as well as regional cooperation, security and sustainable development.

INTRODUCTION

Afghan President Hamid Karzai, Turkmen President Saparmurad Niyazov, and Pakistani President Pervez Musharaf met in Islamabad, Pakistan on May 29-30, 2002 to announce the formation of a coalition for implementing the Turkmenistan-Afghanistan-Pakistan (TAP) natural gas pipeline project. The TAP project consists of a gas pipeline of about 1,700 kilometers that can transport up to 20 billion cubic meters of natural gas annually from the Dauletabad fields in the southeast Turkmenistan to consumers in Afghanistan, Pakistan and India. The project costs $2.0 billion - $2.5 billion, while the design and construction of the project takes about 4 years, after all necessary decisions are taken by the cooperating countries. (1) A steering committee of the ministers of oil and gas from the three countries (Steering Committee) was established for necessary follow-up and supervision of the project. The Asian Development Bank (ADB) responded positively to the Steering Committee's request to play the role of a development partner and to grant regional technical assistance for feasibility of the project.

The Afghan government strongly supports the TAP project as it would create over 10,000 jobs and bring in hundreds of millions of dollars from the additional projects agreed to in the tripartite Memorandum of Understanding signed in May 2002. The Afghan government expects to earn $100-$300 million annually in transit rents on the pipeline alone. (2) As Afghanistan would still be dependent on international assistance for its recurrent budget funding in the next 5-10 years, the transit rents would provide the country with a sustainable financing source.

More broadly, the TAP project will benefit the entire region in mainly three ways: 1) provide cheaper and cleaner energy to consumers, 2) generate income that can be used for social development, and 3) bring about regional security through joint project ownership. (3) However, aside from technical problems, the realization of the project faces significant political and security challenges, considering the volatility of the relationships between India and Pakistan and political uncertainty and widespread insecurity in Afghanistan, particularly in areas through which a major part of the pipeline would pass.

REVISITING HISTORY FOR LESSONS TO BE LEARNED

American oil giant Unocal Corporation and Bridas Corporation of Argentina were rivals to take the lead in the TAP project in the 1990s, but the project was shelved due to escalating armed conflicts in Afghanistan and the global isolation of the former Taliban regime. However, the end of the Taliban rule in the post-9/11 has brought about continuing hope among regional and international energy stakeholders to revive the TAP project.

Despite optimism, common economic interests and political will of the involved countries to construct the pipeline, major political risks remain and new challenges are emerging that menace the project. Unless long-term strategic policies are formulated to resolve these problems, the construction of the pipeline will hardly succeed. Nonetheless, recent history in the context of Afghan politics offers useful lessons to learn from and avoid repeating the past mistakes.

To identify current obstacles and potential risks involved in building the trans-Afghan gas pipeline, it is useful to draw on Ahmed Rashid's in-depth analysis of the initial corporate venture in 1990s to construct the pipeline across Afghanistan. Ahmed Rashid in Taliban: Militant Islam, Oil and Fundamentalism in Central Asia documents in detail the initial failure of the trans-Afghan pipeline being due to America's lacking a comprehensive policy towards the region -- particularly Afghanistan as the core of regional instability. This should help remind decision makers of what went wrong then that could go wrong again if the US and other major stakeholders in the security of energy supply do not make the right policies to preserve their long-term economic and political interests.

US ENGAGEMENT IN AFGHANISTAN

During the last decade of the Cold War, the United States was deeply engaged in the Afghan politics in order to contain the former Soviet Union. The West and its Muslim allies recruited, financed and armed various Afghan mujahidin guerilla factions to fight the Soviet troops (1979-1989) in Afghanistan and the pro-Soviet Afghan governments (1978-1992).

However, after the Soviet Union withdrew in 1989 and its interference ended in 1992, Washington abandoned its moral responsibility to restore peace in and help rebuild Afghanistan. Regional powers such as Pakistan, Iran and Saudi Arabia took advantage of the political vacuum the US retreat created and begun advancing their regional interests through proxy conflicts fought by the former 9 mujahidin factions.

As Rashid rightly puts it, "For ordinary Afghans the US withdrawal from the scene constituted a major betrayal, while Washington's refusal to harness international pressure to help broker a settlement between the warlords was considered a double betrayal."(4) The war dragged on for almost 14 years, which consequently left 2 million Afghans killed, 5 million refugees scattered around the world, and thousands of others permanently disabled and displaced.

The end of the Cold War ushered in a unipolar international system where the US suddenly became the world's sole superpower, resulting in American politicians' negligence of some of their most important long-term national interests in the world's resourceful regions such as Central Asia and the Caspian region. They primarily focused on ad-hoc issues and problems that posed immediate danger to the US assets overseas. Hence, Washington's policy towards South Asia and Central Asia lacked strategic framework and dealt with issues as they occurred.

US DISENGAGEMENT AND POLICY TOWARD THE TALIBAN

During the 1990s, the Taliban's rise to power in Afghanistan did not draw much attention from the US government. In fact, most American policy makers thought of the Taliban's movement as an indigenous durable solution to the Afghanistan's protracted civil strife. Rashid lists several phases of American policy towards the Taliban, driven by domestic interests or attempted "quick-fix solutions rather than a strategic policy."(5)

Between 1994 and 1996 Washington supported the Taliban politically through its allies Pakistan and Saudi Arabia, essentially because the Taliban were viewed as anti-Iranian, anti-Shia and pro-Western. The US simply ignored the movement's own religious fundamentalist agenda, its suppression of women's rights, and the threat they posed to regional stability. Between 1995 and 1997 the US involvement was driven by the Unocal project, although the US had no strategic plans towards accessing Central Asian energy and assumed that pipelines could be built without resolutions to regional civil wars. (6)

Anxious to beat its Argentine competitor -- Bridas -- Unocal officially entered the pipeline game on October 21, 1995, when Turkmen President Niyazov signed an agreement with Unocal and its partner, the Saudi-owned Delta Oil Company, to build a gas pipeline through Afghanistan. Henry Kissinger, the former US Secretary of State and then a consultant for Unocal, present in the signing ceremony said that the deal looked like "the triumph of hope over experience." (7) Unocal proposed a gas pipeline from Daulatbad with gas reserves of 25 trillion cubic feet (tcf) to Multan in central Pakistan. Unocal set up the CentGas consortium holding the majority share followed by minority shares held by Saudi Arabia, Turkmenistan, Indonesia, Japan, South Korea and Pakistan. (8)

Since Pakistan played a major role in organizing the Taliban movement and its sweeping military gains during 1994-96 in Afghanistan, the Pakistani government fully backed Unocal and urged the company to start construction quickly in order to legitimize the Taliban regime. Pakistan also needed new sources of gas supply as its demand for natural gas was expected to rise substantially in the next few years, with an increase of roughly 50% by 2006 as Pakistan plans to make gas the "fuel of choice" for future electric power generation projects. Pakistan has 25.1 tcf of proven gas reserves, and currently produces around 0.8 tcf of natural gas, all of which is consumed domestically. (9)

Therefore, Pakistan's government represented in Washington by former US congressmen lobbied the US to support a Taliban victory. The US initially accepted Pakistan's advice assuming that a Taliban victory in Afghanistan would serve its geopolitical interests, mainly for three reasons: 1) that it would make Unocal's enterprise much easier, 2) that a Sunni Taliban government heavily backed by its ally and Iran's regional rival, Sunni Saudi Arabia, would effectively contain Shia Iran, and 3) that the pipeline would bypass Iran as an alternative easier transit route.

As the US and its regional allies were supporting the Taliban based on these assumptions, drug trafficking, poppy cultivation, smuggling of illegal goods, international terrorist operations and other criminal activities were on the rise under the Taliban-controlled areas. Despite warnings from top US government officials about the above problems, the Clinton Administration refused to engage in peacebuilding to ease regional tensions and negotiate with Iran and Russia on pipeline projects. Hence, it was in the interest of Iran and Russia to keep the region unstable by arming the anti-Taliban alliance, so that the US pipeline plans could never succeed.

Iran and Russia supported the United Front, also known as the Northern Alliance, to maintain a defensive frontline against Taliban's campaign. Being threatened by Taliban's export of religious extremism and advance towards northern Afghanistan, secular authoritarian leaders of the Central Asian states joined Iran and Russia to support the United Front. Tajikistan provided its airbase in Kulab for the United Front to receive military and logistical supplies from Iran and Russia. The base was effectively used to carry out logistical operations to support the United Front forces to resist the Taliban's repeated offensives north of Kabul into the Panjsher Valley stronghold and other offensives in the northeast of Afghanistan.

However, in August 1998 the US dramatically turned against the Taliban after they refused to hand over Osama Bin Laden allegedly behind the twin bombings of the US Embassies in Kenya and Tanzania. President Clinton's retaliatory bombing of Bin Laden's Al-Qaida training camps in Afghanistan camps soon forced Unocal to pull out its staff from Pakistan and Kandahar. Finally, in December 1998, the company formally withdrew from the CentGas consortium, which it had struggled so hard to set up. Since the US became preoccupied with capturing Bin Laden, it was clear that no US company could build an Afghan pipeline in light of issues such as the Taliban's gender policy, Bin Laden, and the continuing fighting. (10)

In the concluding chapter of his best-selling book, Rashid highlights some of the lessons that should have been learned from the Unocal project. However, he notes, "The US, by picking up single issues and creating entire policies around them, whether it be oil pipelines, the treatment of women or terrorism, is demonstrating that it has learnt little." (11)

Rashid elaborates that several lessons from the Unocal project should unforgettably be kept in mind about future pipeline projects:

No major pipeline from Central Asia can be built unless there is far greater US and international commitment to conflict resolution in the region -- in Afghanistan, Tajikistan, Nagorna-Karabakh, Chechnya, Georgia and with the Kurds. The region is a powder keg of unresolved conflicts. Nor can secure pipelines be built without some degree of strategic consensus in the region. Iran and Russia cannot be isolated from the region's development forever. They will resist and sabotage projects as long as they are not a part of them. Nor can pipelines be built when ethnic conflicts are tearing states apart. Ethnicity is the clarion call of the modern era. Trying to resolve ethnic problems and keep states together needs persistent and consistent diplomacy rather than virtual bribes to keep various warlords quiet. (12)

THE TAP PRJECT FACING A 3-DIMENSIONAL PROBLEM

Rashid's above analysis indicates a three-dimensional political risk involved in bringing the oil and gas resources of Central Asia and the Caspian to the market: 1) the transportation problems, 2) the great power involvement and 3) the potential instability of the regimes in place. (13) These three dimensions interlock. The transportation difficulties invite interference from great powers for both economic and political reasons. Hence, the solutions affect the neighboring countries. The potential instability of the regimes in place makes them vulnerable to hostile neighbors or regional rivals. Thus, the internal politics of the new states affect the great powers. (14)

The above theory fully holds true of the Turkmenistan-Afghanistan-Pakistan gas pipeline project. Turkmenistan is a landlocked country without transit routes other than Russia, which Turkmenistan wants to avoid. Transportation problems for Turkmenistan limit the country to two transit options -- Iran and Afghanistan -- to get its gas to international markets. Any investor of oil and gas industry would rationally choose Iran because of its better security, less corrupt government institutions and a well-connected network of pipelines.

However, rational options cannot always be pursued because of the strategic importance of natural resources, which inevitably involves great powers. With global demand increasing for oil and gas, international competition over controlling the sources and means of distribution of natural resources becomes requisite to economic survival and political influence. The US economy squarely depends on the available and cheap oil and gas, which naturally causes American direct or indirect involvement in the energy business and politics wherever it happens.

In a 1998 speech to the "Collateral Damage Conference" of the Cato Institute, Vice President Dick Cheney said, "The good lord didn't see fit to put oil and gas only where there are democratically elected regimes friendly to the United States. Occasionally we have to operate in places where, all things considered, one would not normally choose to go. But, we go where the business is." (15) While Dick Cheney was CEO of Halliburton at the time, he is now President George Bush's main architect of energy politics.

Vice President Cheney's speech was delivered during a time period when American giant companies such as Unocal Corporation were actually attempting to operate in places where "business" took them. Yet, forced to comply with the tense foreign policy of the US towards Iran, the CentGas Consortium led by Unocal avoided Iran's more economical and safer transit route in favor of risky Afghanistan and Pakistan. Still, the pipeline project through Afghanistan failed mainly because the US lacked a comprehensive strategic policy towards the entire region.

US REENGAGEMENT IN AFGHANISTAN

Unfortunately, not the Unocal lessons but the tragic incidents of 9/11 -- costing three thousand American lives -- moved the US to overthrow the Taliban and launch a cave-by-cave search to arrest Bin Laden in Afghanistan. Had the US not neglected Afghanistan in the first place and later on, the country would not have turned into an operational terrorist base for Bin Laden and Al-Qaida to mount major attacks against the United States. And, of course, the Unocal project would have been one among many profitable foreign investors in Afghanistan.

Although no major American energy corporation is involved in the ongoing efforts to revive the TAP project, Washington's strategic and economic interest in the security of primary energy supply is unquestionable. A glance at the illustrations indicates dramatic rise in global demand for all primary energy sources, particularly natural gas, which is the cleanest and fastest-growing fossil fuel, having become the fuel of choice for power generation. (16)

Nonetheless, Afghans have welcomed America's reengagement in Afghanistan to help rebuild the country. Experts and observers of the US Afghanistan policy often warn that the US cannot afford to fail Afghanistan again. In fact, it would be more appropriate to say that the US cannot afford to neglect the whole region again. America's geopolitical interests in the region are too great not to pursue a region-wide policy.

Since October 7, 2001, the Bush Administration has achieved major successes in Afghanistan. The Taliban were toppled and their forces disbanded. The US has been able to muster international assistance to reconstruct Afghanistan. Security Council Resolution 1386 -- approved unanimously on December 20, 2001 -- provided for the creation of International Security Assistance Force (ISAF) and its deployment to Kabul and the surrounding areas to help the Afghan Interim Authority create a secure environment in Kabul.

Nineteen countries contributed troops and logistical supplies to ISAF in order to provide security in Kabul. The number of ISAF forces has increased from 4,500 to more than 6, 500 peacekeepers currently maintained by the North Atlantic Treaty Organization (NATO). At the same time, international donors gathered in Berlin, Germany, on May 31-April 1, 2004 to pledge additional funding in reconstruction assistance to Afghanistan. A total of $8.2 billion was pledged to support Afghanistan's continuing efforts to rebuild.

The Bonn Agreement reached among a group of Afghan leaders in December 2001 created an interim government, which was expanded into a transitional government by the Emergency Loya Jirga of June 2002. The people of Afghanistan achieved another significant milestone on the path toward creating a democratic nation when President Karzai signed the new Afghan constitution into law on January 4, 2004.

SECURITY IN AFGHANISTAN

In spite of the above accomplishments, widespread insecurity continues in Afghanistan, which indefinitely delays the process of state building in the country. In addition to the daily incidents and civilian casualties, assassination of the newly appointed government officials more clearly accounts for the continuing insecurity in Afghanistan.

On March 21, 2004, Afghanistan's second aviation minister was killed in Herat. On February 14, 2002, the first Afghan minister of civil aviation and tourism was stabbed to death at the Kabul airport. Less than two months later, on April 8, four people were killed and 20 others were injured in a bomb attack on a government convoy headed from Kabul to Jalalabad. The convoy was carrying interim Afghan defense minister who survived the attack. (17) On July 6, the Afghan vice-president and his driver were killed outside the gates of a government ministry in Kabul. On September 05, 2002 a "uniformed" attacker shot President Karzai in Kandahar where he was attending the wedding of his brother. The president escaped unhurt but the governor of Kandahar was slightly injured. (18)

These terrorist activities are indicative of the anarchic vacuum in which opposing ethnic warlords operate freely outside Kabul boldly challenging the authority of the transitional government limiting its control to Kabul. Warlords' armed militias frequently engage in infighting over the control of certain provincial districts of commercial and economic importance.

Moreover, Antonio Maria Costa, Executive Director of the United Nations Office on Drugs and Crime notes in his organization's annual opium survey of Afghanistan that in 2003 Afghanistan again produced three-quarters of the world's illicit opium. The survey shows that in 2003 the income of Afghan opium farmers and traffickers was about $2.3 billion, a sum equivalent to half the legitimate GDP of the country.

The survey also reports that out of this drug chest, some provincial administrators and military commanders take a considerable share: the more they get used to this, the less likely it becomes that they will respect the law, be loyal to Kabul and support the legal economy. Terrorists take a cut as well: the longer this happens, the greater the threat to security within the country and on its borders.

Maria Costa warned that "there is a palpable risk that Afghanistan will again turn into a failed state, this time in the hands of drug cartels and narco-terrorists, a risk referred to more than once by President Karzai, whom I salute for his courage and dedication." (19)

Increase in terrorist activity, continued factional infighting throughout Afghanistan, and sharp rise in the cultivation and production of opium indicate that US has moved slowly to consolidate its post-9/11 achievements towards state building in Afghanistan. The Bush Administration refused until recently to support the expansion ISAF beyond Kabul to provide security and pave the way for institutional building and long-term development of Afghanistan.

In addition, the process of disarmament, demobilization and reintegration falters in Afghanistan. Kabul itself has not yet been disarmed let alone the ever more powerful regional narco-warlords with larger private armies than the nascent Afghan National Army of only 8,000 troops. Although the Bush Administration has repeatedly assured the world of its long-term commitment to the reconstruction of Afghanistan, the massive military spending required for Iraq has drastically reduced resources needed for rebuilding Afghanistan.

REGIONAL POLITICS AND THE US POLICY

Developments in Iran and Pakistan over the past two years also indicate that the US is not doing what it must do to preserve its energy interests in the region. President Bush's doctrine of "axis of evil" has alienated Iran's reformists and radicalizes Tehran further, leading to potential regional destabilization in the long run.

Furthermore, Washington's "regime change" in Iraq negatively affected Pakistan's polls in 2002 escalating anti-American sentiment. The Muttahidda Majlis-e-Amal (MMA), an alliance of six Islamic parties, won 31 seats, including 19 of 35 seats in the North West Frontier Province and three in Baluchistan, both bordering Afghanistan. (20) Formed after the fall of the Taliban regime in Afghanistan, MMA is opposed to Pakistan's participation in the war on terror and wants the US to be prevented from sending its covert special forces into Pakistan. It also sympathizes with Afghanistan's former Taliban rulers and criticizes the military government for arresting the Taliban and Al-Qaida leaders and handing them over to American authorities.

CONCLUSION

The political realities in the region and widespread insecurity in Afghanistan show that Unocal lessons have been almost forgotten, although they are more valid now than any time before. The Asian Development Bank can be optimistic to execute its feasibility study for the TAP project, and the Afghan government may pipedream about millions of dollars in annual transit rents from the project. Nonetheless, the US is still treating Afghanistan and the entire region through ad hoc policies. President Bush's reluctance to support the expansion of ISAF in Afghanistan and taking a leadership role in it clearly indicates that the US may abandon Afghanistan again. This is reminiscent of Washington's lack of a region-wide strategic policy that led to Unocal's failure to build the gas pipeline through Afghanistan in the second half of 1990s.

Washington's actions and focus on Iraq reinforce the argument that the US is not fully committed to the reconstruction and long-term development of Afghanistan. Neither does the Bush Administration seem to soften its stance on Iran or tolerate a Pakistani government led by Islamic militants who openly support Al-Qaida and denounce American presence in Afghanistan.

Therefore, the Turkmenistan-Afghanistan-Pakistan gas pipeline project will indefinitely remain a pipedream without a peaceful and stable Afghanistan. However, the US has a choice to make the gas pipeline a reality by rethinking its approach to the region. The Bush Administration can build on the Unocal lessons to consolidate its peacebuilding achievements in Afghanistan on a sustainable basis, while making an effort to find strategic consensus with Iran and Russia to maintain regional security for the common economic and political benefits of all stakeholders. Failure to do so will greatly affect the US-led war on terror and jeopardize American energy interest in the region.

However, expectation about the role the US can play in maintaining stability in the region ought to be realistic. There is so much that one country can do regardless of its unrivaled military and economic might. The primary beneficiary of stability in Afghanistan and any major pipelines that may pass through the country would be the regional states neighboring Afghanistan. The TAP project would boost regional economic development and enhance security through joint partnership.

Regional players namely Pakistan and Iran should not underestimate the importance of Afghanistan's reconstruction to their own political and economic stability. The events of 1990s displayed that instability in Afghanistan had far-reaching spill over effects in the region and beyond. The influx of thousands of Afghan refugees into Iran and Pakistan has further destabilized the two countries' already weak economies over the past two decades.

Transnational problems such as drug trafficking and terrorism across the borders of Afghanistan and Pakistan have fed extremism and fueled political violence in both countries. In spite of Pakistan's support of the Taliban both militarily inside Afghanistan and diplomatically by being the first nation to recognize their oppressive regime, the Taliban overtime developed their own agenda joining Al-Qaida and Islamic militants in Pakistan to denounce General Pervez Musharaf's government as puppet of the West.

It is in the long-term interest of Iran and Pakistan as well as the entire region to strengthen Afghanistan's nascent government by investing in the country's state building process rather than dividing Afghan ethnic groups in pursuit of short-term goals.

The choice for the US and regional players is clear. Constructive engagement in Afghanistan and the whole region benefits everyone. Shortsighted engagement will lead to the collapse of the fragile transitional government of Afghanistan with the vacuum immediately filled by the Afghan ethnic warlords siding with differing regional rivals. Factional infighting would inevitably break out, subsequently enabling the Taliban and Al-Qaida to regroup and resume launching anti-American terrorist attacks worldwide. Consequently, only "peace can bring a pipeline, a pipeline cannot bring peace."

Giant energy multinational corporations have experienced the truth behind the above statement. They should support peacebuilding efforts by making it an essential part of their corporate strategy to lobby the US government and other major powers to resolve longstanding political and humanitarian crises in the potentially energy rich regions on which the global economy continues depending for at least the next century. Failure on the part of each of these diverse and yet interdependent actors to promote peace and security through sustainable development of Afghanistan will undoubtedly lead to the sabotage of any gas or oil pipeline to be built through the country.

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