Gas Pipeline in Focus as Iran Leader Makes Rare Trip to Pakistan

  • Rouhani is first Iranian head of state to visit in 14 years
  • Pakistan has close ties with Saudi Arabia, Iran's top rival

Iranian President Hassan Rouhani will arrive in Pakistan on Friday as the Muslim-majority neighbors seek to revive trade ties held back for years by international sanctions.

The two-day trip, the first by an Iranian head of state in 14 years, will feature talks on a long-delayed gas pipeline, a plan to increase trade between ports on the Arabian Sea and a goal to boost electricity sales. Pakistan desperately needs energy, and Iran is looking for buyers.

“A new chapter of relations between Iran and other countries -- especially neighbors and especially Pakistan -- is going to be started,” Seyed Abbas Badrifar, a spokesman for Iran’s embassy in Islamabad, said in telephone interview on Tuesday. He said the pipeline “is very much on, and it’s up to Pakistan when it builds.”

Pakistan, which has traditionally had close relations with the U.S. and Sunni-majority Saudi Arabia, enforced United Nations-backed economic sanctions designed to deter the nuclear program of largely Shiite Iran. Those restrictions made it difficult to find financial backing for the 800 kilometers (500 miles) of pipeline needed on the Pakistani side.

‘Economic Diplomacy’

With most sanctions now lifted, both countries are seeking to bolster economic links. Pakistan currently trades more with rival India than it does with Iran. The two nations last year agreed to boost their bilateral trade to $5 billion from $1 billion over five years.

“Iranians are on a course of active economic diplomacy,” said Hasan-Askari Rizvi, a Lahore-based defense analyst. “Also Pakistan provides them an opening to China.”

Prime Minister Nawaz Sharif has revived investor interest in Pakistan with moves to clamp down on extremism and ease electricity shortages. China is helping to build up Pakistan’s infrastructure with a $46 billion investment corridor that will give it a link to the Arabian Sea.

Rouhani will travel with eight cabinet ministers including those responsible for oil, electricity and industries. Pakistan and Iran plan to sign a five-year strategic commercial plan, as well as easing the trade of meat and animals between Karachi and Chabahar port in Iran, according to Badrifar from the embassy. Pakistan is also looking to import as much as 3,000 megawatts of electricity from Iran, up from about 75 megawatts now.

Sectarian Tensions

Saudi Arabia and Iran have long vied for influence in Pakistan, with both oil-rich nations forging links with radical groups and pumping cash into Islamic religious schools. That has fanned extremism and fueled sectarian violence in Pakistan, which has more Shiite Muslims than any country apart from Iran.

Ties between Pakistan and Iran have been fraught since the 1980s, when Islamabad’s leaders joined Saudi Arabia in helping to oust the Soviet Union from Afghanistan. Later, Pakistan supported the hardline Sunni Taliban movement that took control of Kabul. Iran also accused al Qaeda-linked militants in Pakistan’s southwest of orchestrating deadly attacks in Iranian towns near the Pakistani border.

Saudi Arabia has consistently provided financial backing to Pakistan, the only Muslim-majority nation with nuclear weapons. It’s now Pakistan’s third-biggest trading partner and top remittances provider, and also provides it with oil on concessional terms.

Still, Pakistan’s refusal last year to join a Saudi-led offensive against Shiite Houthi rebels in Yemen has helped rebalance the relationship with Iran, according to former Pakistan foreign minister Khurshid Mahmud Kasuri. That was also seen in January, when Pakistan’s prime minister and army chief used shuttle diplomacy in an attempt to ease Saudi-Iranian tensions.

“If the trust deficit with Iran is removed, it will look at our relationship with Saudi Arabia with less suspicion,” Kasuri said.

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