The sandwich policy of Iran

by Tariq Saeedi

For the last decade or so, Iran has been following a policy that defies any rational justification. After the fever to export Islamic revolution subsided in the early 1990's, Iran started a number of manoeuvres that can collectively be called The Sandwich Policy.
The Sandwich Policy is meant to maintain imperceptible but persistent tension with the immediate neighbours and promote deep friendly relations with the neighbours of neighbours. There may be some unseen benefits behind this policy but what is quite obvious is that it undercuts the economic interests of Iran's neighbours and strengthens economic cooperation of Iran with the neighbours' neighbours.

It is not a novel concept. Some five thousand years ago a well-known sage from the Indian subcontinent first advocated this policy as a sound advice to the kings. A case in point is the natural gas pipeline proposals for India. Two parallel proposals -- Trans-Afghan Pipeline (TAP) and Iran-Pakistan-India (IPI) pipeline -- are under consideration to meet the energy needs of India.
Even though President Khatemi, answering one of my questions during his visit to Turkmenistan in 2002, said, “Iran would welcome both [TAP and IPI],” Iran acted otherwise.
When I posed a joint question to President Khatemi and President Niyazov that is it practicable to lay both the pipelines, Khatemi said, “Iran supports any proposals that would help Turkmenistan tap the full potential of its natural resources. Not only that, we shall do all we can to help promote this project [TAP].” The later developments showed that Khatemi was merely being polite.

Despite the fact that both the TAP and IPI would not be enough to meet the fast growing requirements of expanding Indian economy, Iran turned a number of loops to persuade India to go for IPI only. This is obviously to India's disadvantage.
Iran would provide natural gas to India from its South Pars field in the gulf. The gas from Pars has no more than 60 % of Methane content, the mainingredient of natural gas that gives heat energy and consequently the only ingredient that matters to the consumers. On the other hand, Turkmenistan's Dauletabad field, that is available for TAP, offers 75-80 % Methane content.

Price of the natural gas is determined in mm Btu -- ability of the gas to produce heat energy. Gas with 60 % Methane content would cost much less in the open market compared to the gas with 75-80 % Methane content. In other words, Iranian gas should be priced at some 15-18 % less than Turkmen gas.
However, according to the last reports, Iran is trying to convince India to buy its gas at $ 65/- per 1,000 cm. It is not clear whether this price is at the border of Iran or elsewhere. If this price is at the Iran-Pakistan border, India would be well advised to give second thought to the deal because Turkmen gas, with its far superior Methane content, can be made available at much less price in terms of mm Btu.

Another factor to keep in mind is the transit costs. Transit of naturalgas on the level terrain comes to something like $ 1/- per 100 km per 1,000 cm. Transit cost for under-water pipeline, as would be the case with IPI, is substantially more than that because of maintenance charges and repair costs. Field-to-kitchen distance for Pars gas would be more than Turkmen gas, adding to the transit cost and ultimately putting additional burden on the consumers.
In all honesty, India needs both the pipelines. At present the demand-supply gap of natural gas in India is around 43 bn cmpy. This would go up to 65 bn cm annually by 2008. Combined capacity of TAP and IPI would be 60 bn cm, still leaving a gap of 5 bn cm between demand and supply projections for 2008.

Playing with Turkmenistan's interests is not the only example of Iran's Sandwich Policy. Recently, when President Saakashvilli visited Iran, he got a firm promise that Iran would provide natural gas to Georgia. This was despite the fact that at present there is no pipe connection to transport Iranian gas to Georgia and Russia is the main supplier of gas to Georgia, a supplier that has been pumping gas almost regularly event though Georgia has been unable to clear the backlog of payments.
Saakashvilli returned to Tbilisi and started inciting “every Georgian family” to rise against Russian presence in some regions of Georgia. The immediate result was that Russia has cut off the supplies of gas to Georgia, plunging the whole country into economic chaos.
By making moves that are not rooted in reality, Iran managed to anger Russia, its staunchest supporter in its nuclear programme, and put a fledgling country ruled by a vapour-whistle into deep economic crisis. One wonders if Iran realizes what it is doing.

There are many more examples of Iranian Sandwich Policy. Azerbaijan is the next-door neighbour of Iran and more Azeris are living in Iran than in Azerbaijan. Moreover, Azeris are Shias, the same Islamic sect as the official religion of Iran. And yet, Iran continues to antagonize Azerbaijan and prefer to improve relations with Armenia, a neighbour of Azerbaijan that has annexed Ngorno-Karabakh region by force and continues to harass Azerbaijan continuously.
Iran signed a transportation network agreement with Afghanistan, Tajikistan and Uzbekistan last year that is meant to bypass Turkmenistan for road trade route between Iran and Central Asia. This is despite the fact that Turkmenistan has joined hands with Iran in building a water dam-reservoir and continues to support Iran in Caspian issues and other matters where Iran lacks substantial international support.

At times it appears that economic planners of Iran are totally unaware of obtaining political realities and they also seem unaware of the fact that a US-led “war against terrorism” is slowly rolling in their direction. It is the classic case of split personality, two governments in one country.
To weather successfully the times of war, it is necessary to maintain good relations with neighbours in times of peace.

The writer is Ashgabat, Turkmenistan-based journalist, noted analyst and the Editor of a regional news agency, News Central Asia (nCa). He is also a regular contributor to the Pakistan Times.