On the sidelines of the 10th Shanghai Cooperation Organisation (SCO) meeting held in St Petersburg, Russian Prime Minister Putin and his Pakistani counterpart Gilani expressed a willingness to speed up work on CASA 1000 with the former announcing financing of 500 million dollars for the project. The modalities of the financing offer were not made clear, or in other words, Putin did not clarify whether the money would be in the form of a grant and, if not, what would be the cost of borrowing for Pakistan; yet what is significant is that the offer was made at all as previously Russia had been openly opposed to the project, an opposition premised on Russia's perceived need to control energy markets within the former Soviet republics centred on the gas-rich Turkmenistan and water-rich Tajikistan and Kyrgyzstan as an integral component of its geopolitical strategy. In marked contrast, the United States with an enhanced presence in the region subsequent to US troops on active duty in Afghanistan post-9/11 has vigorously pursued not only the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline but also Central Asia South Asia (CASA 1000) MW project designed to bring electricity from water-rich Kyrgyzstan and Tajikistan through Afghanistan to Pakistan and India. The common objective of the two projects is to supply energy/electricity from the energy-surplus Central Asia to the energy-deficient South Asia representing a win-win situation for all participating countries concerned. In the case of CASA 1000 in particular, the funds or money earned through export of energy will help both Kyrgyz Republic and Republic of Tajikistan to make investment in infrastructure and improve economic growth. Recently, however, a change in the Russian stance was evident and it had sought a more active engagement in the projects. The rationale behind this shift, political analysts argue, may be because Moscow considers that TAPI may divert Turkmenistan away from the trans-Caspian energy initiatives that may have bypassed Russia and may well lay the groundwork for reorientation of Russia's own gas market to rapidly emerging Asia. Others argue that Russia wants to develop a North-South geopolitical axis, whereby it could attempt to promote a geopolitical space extending from Russia across Central-South Asia to the Middle East, which could compete with similar plans spearheaded by the US to the disadvantage of Russia and China, like the "Greater Middle East" or the "Greater Central Asia". Or it may be an amalgam of all these factors that culminated in the Russian offer to cash-strapped Pakistan, which can, therefore, be regarded as one major step forward in terms of implementing the project. However, other concerns with respect to both these projects remain, notable amongst which is the failure of Nato forces to subdue the Taliban who remain engaged in destroying infrastructure facilities, especially those constructed through support of Nato countries. The envisaged extensive CASA 1000 transmission line and TAPI gas pipeline within Afghanistan would, therefore, represent attractive targets for the Taliban rendering the insurance risk associated with the projects too high. Which participating country would bear what portion of the insurance cost is yet to be agreed? In addition, India assessed as the largest purchaser of energy from the two projects, given its existing industrial/commercial strength and estimated rate of development, has raised questions about its energy security, based on the fact that the transmission and gas pipelines have to pass through nuclear rival Pakistan. Needless to add, India perceives a massive increase in Pakistan's leverage in other matters notable amongst which is our water security issues, based on India's violation of the Indus Water Treaty if it agrees to purchase energy through either of these projects. There is thus many a slip between the cup and the lip and what is clear is that these two projects have been in the pipeline for decades and some major cricks still remain to be worked out. Be that as it may, Pakistan would be the major beneficiary of these two projects given that Afghanistan's capacity for absorption of energy is small at present and given India's double mindedness about Pakistan as the transit country. It is, therefore, critical that we proceed proactively and cautiously with the two projects and seek to deal with the concerns of all participating countries. Copyright Business Recorder, 2011
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