Challenges and Opportunities in the Iran- Pakistan Relationship-2015

Monthly Background Report

Submitted by the NUST Research Team GCC and Iran

October 15, 2015

NUST Research Team Monthly Background Paper 15-10-2015

Table of Contents

1. Abstract…………………………1 2. Analysis of the Issue……………………...... 2 3. Chapter 1: Analyzing the Intricacies of the Iran/Pakistan relationship………………………4 Section 1.1: Impact of divergent foreign policies on the status of trade………………………….6 4. Chapter 2: Illegal Trade and the Porous Sistan/ Balochistan/ Balochistan Border………………8 5. Chapter 3: Prospects and Challenges for the Iran/ Pakistan Gas pipeline…………………...10 Section 3.1: Unit Pricing……………………..10 Section 3.2: Pipeline Politics………………...13 6. Chapter 4: Terrorism and Border Skirmishes.15 Section 4.1: Countering Baloch Separatists….16 Section 4.2: Sectarianism as Divisive tactics...17 Section 4.3: Afghanistan Quagmire………………………..18 Section 4.4: Wider Geopolitics and their bearing on the Iran/ Pakistan relationship………………………19 7. Conclusion………………………20 8. Policy Recommendations……………….21

List of Acronyms and Abbreviations:

IPI- Iran Pakistan Gas Pipeline

RCD- Regional cooperation for Development

CENTO- Central Treaty Organization

NATO- North Atlantic Treaty Organization

ISAF- International Security Assistance Force

JCPOA- Joint Comprehensive Plan of Action

IAEA- International Atomic Energy Agency

JEC- Joint Economic Commission

MBTU- Million British Thermal Units

ICRO- Islamic Culture and Relations Organization

TTP- Tehrik I Taliban Pakistan

NUST Research Team Monthly Background Paper 15-10-2015

Abstract:

There are considerable amount of challenges which needed to be surmounted in order for the Iranian-Pakistan relationship to blossom. Historically, the relationship has been defined in terms of a divergence of alliances and national interests instead of strategic convergence despite shared historical and cultural values between both nations. Iran was one of the first states to recognize the sovereign status of Pakistan in 1947 and simultaneously, Pakistan became one of the first states recognize the Islamic Regime in Iran after the 1979 revolution1. The subsequent turmoil in Pakistan due to military coups as well as the fragility of democracy has had a bearing on the relationship where different governments have aligned itself with the Iranian regime. The relationship has also been held hostage to Pakistan’s alliance with the United States and Saudi Arabia as opposed to Iran, which had chosen not to ally itself with the West after the revolution, Hence, differing narratives on the status of Afghanistan during the 1979 war, to close economic and defense cooperation between Pakistan and Saudi Arabia.

Due to the complications of this relationship it is imperative to examine the everlasting challenges which both states encounter which hinder their ability to cooperate bilaterally. An examination of recent history would aid that process, where opportunities and challenges can be examined and explored so that adequate policy recommendations can be formulated to deal with those challenges and cash in on those opportunities.

1 Alam Shah, Iran Pakistan Relations: Political and Strategic Dimensions, Strategic Analysis Vol. 28, No. 4, 2004 p.546.

NUST Research Team Monthly Background Paper 15-10-2015

Analysis of the Issue:

Recent history has suggested that prospects for cooperation have been promising, despite the civil/ military conundrums in Pakistan and the Iranian regime’s reservations over Pakistan’s alliance with the United States and Saudi Arabia, which Iran views with skepticism and suspicion. The relationship with Iran during the Shah regime for example, focused primarily on the convergence of strategic interests where both states were founding members of CENTO or the Baghdad Pact which was formed in 19552. Trilateral initiatives have also included regional forums such as the RCD or the Regional Cooperation of Development which was established in 1964.

After the Shah regime was deposed and the 1979 Islamic revolution took place, Pakistan found itself balancing its foreign policy with Iran and the United States with the exception of the 1979 Soviet invasion of Afghanistan where the country under General Zia Ul Haq was averse to the idea of the Northern Alliance to cement its position as the legitimate government of Afghanistan and instead opted to support the Taliban which was recognized by states such as Saudi Arabia and the United States along with Pakistan. These overtures by the Pakistani government and the everlasting sectarian violence as a result of Pakistan’s alliance with the Taliban under successive civilian and military governments had resulted in souring of ties between both countries, where trust deficits widened over Pakistan’s alleged support for Sunni Extremist groups to Pakistan’s long held view that Iran, like many states in the Middle East, is fomenting sectarian discord within its borders.

The post 2001 era in Iran Pakistan relations has resulted in more divergence instead of convergence of strategic interests. Pakistan became an active ally in the US led War on Terror with the objective of dismantling the Al Qaeda becoming a top priority under the military government of General Pervez Musharraf. Iran on the other hand was focused more on ensuring that it continues to pursue a policy of neutrality instead of outright support for NATO and ISAF led forces inside Afghan territory.

2 Ibid.

NUST Research Team Monthly Background Paper 15-10-2015

However, these differing foreign policy overtures does not detract from the fact that the Iranian/ Pakistani relationship has not been bogged down or hijacked completely and cooperation on multiple fronts has continued over an array of different issues on diverse forums ranging from state level talks, foreign minister visits to dialogues stressing on economic cooperation. In 2008, there was great emphasis placed on the Iran Pakistan Gas Pipeline project which was previously held hostage to geopolitical dynamics and global power alliances. The respective governments of Mahmoud Ahmadinejad and General Pervez Musharraf had decided reignite the project which had been subject to delays as well as unit cost issues3. Such bilateral dialogues, or mechanisms for ensuring cooperation have continued, which is extremely relevant in present times where the Western states continue to engage with Iran regarding its enrichment activities and consider solutions to curb Iran’s status as a nuclear power of which the JCPOA, P5+1 Nuclear Deal is noteworthy. Under the agreement, Iran as a state which was previously riddled with sanctions because of its economic program would benefit from a waiver subject to efforts aimed at curbing its enrichment activities, as well as allowing invasive IAEA inspections and signing the Additional Protocol4.

The purpose of this monthly background paper would be to explore these prospects through which Pakistan and Iran can enhance their cooperation presently, where developments such as the Iranian regime’s historic negotiations with the West and Pakistan’s first democratic transition during the 2013 elections present a plethora of issues, challenges as well as prospects. In international relations, realism trumps all other considerations given that the states are essentially rational actors which explore avenues of cooperation with one another based upon their own national interests. The paper will provide a historical background and include secondary sources of information regarding the Iran/ Pakistan relationship and its major developments as well as dwell into the intricacies of the prospects.

3 Tehran Times, 2008, Pakistan, Iran Finalize Gas Pipeline Deal, APP, Tehran.

4 Project on Middle East Political Science, Iran and the Nuclear Deal, POMEPS Studies, 13, 2015. pp. 24-35.

NUST Research Team Monthly Background Paper 15-10-2015

Chapter 1- Analyzing the Intricacies of the Iran/ Pakistan Relationship:

The Iran Pakistan relationship dates back to 1947 when Iran was one of the first states to recognize the sovereign state of Pakistan. Both states are unique in their disposition, where presently Pakistan is a recognized nuclear power which has been grappling with internal power struggles between the civilian government and the military, while Iran has emerged from its largely secular regime under Mohammad Raza Pahlavi also known as the Shah to an Islamic theocratic state after the 1979 Revolution. These developments are crucial in understanding the significance of the relationship, given that differing foreign policy objectives have had a bearing on prospects for economic cooperation between both states. Similarly the souring of ties can also be attributed to differences over alliances where the US and Saudi Arabian alliance with Pakistan over its foreign policy decisions stood in stark contrast to the Post 1979 Iran which focused on disengagement with the West.

However, alliances alone do not explain impediments towards bilateral economic cooperation and outstanding issues such as drug trafficking and cross border terrorism have had a bearing on widening trust deficits between both states. The stability of Afghanistan is another example, where conflicting narratives on ensuring security in the restive country have been a feature of Iranian Pakistani ties, where support for the Northern Alliance by Iran during the 1979 Soviet invasion of Afghanistan was at loggerheads over Pakistan’s support for the Taliban5. The porous border between the Sistan Balochistan and Balochistan province on either side of Pakistani and Iranian territory has also allowed for an array of spoilers to hijack the relationship ranging from terrorist groups such as Jaish Ul Adl to traffickers which use the route for weapons smuggling as well as illegal trade in agricultural and non- agricultural goods.

In addition, projects such as the Taftan-Quetta Power Transmission Line, The Noukshi- Dalbandin sector of the Quetta- Taftan Highway as well as the constant improvement in the

5 Sial. S, An Analysis of Emerging Pakistani- Iranian Ties, Norwegian Peace Building Resource Center, Report, 2015, p. 1.

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Quetta- Taftan Railway lines are prospects which offer plenty of promise for both states particularly in times where the P5+1 Nuclear Deal has allowed more leverage for states which wish to cooperate with Iran which is not subject to sanctions over its enrichment activities and its nuclear program6. Similarly, the conception of the Iran Pakistan gas pipeline was undertaken back in 1995, but have been hijacked due to suspension of trade as well as negligible economic cooperation due to the divergence of strategic interests which are interlinked and invariably have an impact on economic cooperation

Iran’s stated foreign policy principles have encompassed three cardinal principles which include

 Non-alignment

 Support for the Third World States

 Strong commitment to Muslim countries as is evident in its role in the Organization of Islamic Cooperation7.

The Post 1979 Iran has been hostile towards the United States and acknowledges that the protracted presence of the United States in the Persian Gulf has resulted in tensions between states due to differing ideologies. Pakistan on the other hand has assumed a policy which is transactional with the United States and has fluctuated based upon US interests in the region which have ranged from containing Soviet influence to ensuring peace and stability in Afghanistan as well as countering the threat of the Taliban and Al Qaeda in the country. The latter has viewed Pakistan’s strategic location as crucial to further its hegemonic interests, of which their role in curbing the influence of the Soviet Union in Afghanistan in 1979 is a prime example.

6 Roundtable Report, Pakistan- Iran Relations, Challenges and Prospects, Foreign Policy Series, FPS.IR.1.

7 Salehzadeh A., Iran’s Domestic and Foreign Policies, National Defense University, Department of Strategic and Defense Studies, Series 4, Working Papers, No. 49. pp.2-16.

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1.1 Impact of divergent foreign policies on the status of Trade:

These foreign policy decisions have had a bearing on the status of economic trade between both states where the rewards from initially signing the Preferential Trade Agreement in 1995 could not materialize. Initiatives in the agreement have been promising which includes removing the Custom Duties on 647 trade items, and rewarding Pakistan with a concession of 338 items from Iran which resulted in the PTA to be converted into a Free Trade Agreement8.

Yet bilateral trade between both states has been abysmal. A comparison of the present trade relationship between Saudi Arabia and Pakistan and how that contrasts with the trade estimates of Iran and Pakistan encompassing trade imports and exports are a clear indication of how foreign policy has had a bearing on the level of economic cooperation between states in the region of which the period of 2003 to 2008 is significant:

Date States Balance of Imports Exports Trade 2003-2004 Pakistan- Saudi ( 2125.664) 2478.460 325.796 Arabia 2003- 2004 Pakistan- Iran (191.478) 283.947 92.459 2007-2008 Pakistan- Saudi (3229.597) 3,609.677 380.080 Arabia 2007-2008 Pakistan- Iran (333.188) 551.748 218.5609

8 Alam Shah, Iran Pakistan Relations: Political and Strategic Dimensions, Strategic Analysis Vol. 28, No. 4, 2004 pp.526-545.

9 2003-2008 Figures taken from the Federation of Pakistan Chambers of Commerce and Industry < http://www.fpcci.com.pk/trade-with-countries/Iran.pdf> . Accessed on 10/13/15.

NUST Research Team Monthly Background Paper 15-10-2015

The negative balance on the balance of trade highlighted by the Parenthesis clearly shows that Pakistan’s imports from Saudi Arabia outweigh their exports, whereas in Iran’s case its status of a sanction ridden country has had a bearing on its trading capacity with Pakistan. This trend is indicative of how alliances and foreign policy dispositions have a bearing on the volume of trade between states and how such the both strategic interests and economic cooperation cannot be divorced, which ranges from shared views on security and settlement of territorial disputes and other sources of conflict. Post 2008 till present however, presents Iran and Pakistan with different, geopolitical dynamics yet issues continue to remain. Iran has emerged from decades long isolation due to its controversial nuclear program with the P5+1 Nuclear Deal which the Western Powers which has allowed it to benefit from a waiver of sanctions in exchange for curbing its enrichment activities, allowing for more invasive IAEA inspections and signing the Additional Protocol. This agreement which came into force just recently, has helped in reviving prospects for continuing with bilateral trade as well as work on projects such as the Iran Pakistan Gas Pipeline.

NUST Research Team Monthly Background Paper 15-10-2015

Chapter 2: Illegal Trade and the Porous Sistan Balochistan/Balochistan Border:

Bilateral cooperation has also been hijacked by the current status of illegal trade and trafficking to and from the porous border which separates the Province of Sistan and Balochistan with Pakistan’s Balochistan province. The passage of illegal drug trade has continued unabated as well as trade which ranges from both agricultural and non-agricultural goods. This has had a negative impact on Government revenues in Pakistan, where these goods have not been subject to taxes and duties.

The illegal nature of trade and its negative impacts can be gauged with the fact that prices between goods and commodities have differed considerably between both states, which results in local actors attempting to smuggle goods and services for cheaper prices and higher demand. Much of the trade emanates from Balochistan which is host to an array of Sardars and Tribes with local jirgas providing protection to groups which have been involved in illegal activities. This tacit support has complicated and convoluted the ability of the state to counter these groups and develop a holistic approach to counter the practice of illegal trade in both agricultural and non-agricultural commodities. The low volume of trade between both states and bilateral cooperation not materializing, can also be attributed to ‘third country transactions’, or the fact that Afghanistan’s fragile state has resulted in the blossoming and mushrooming of illegal activities in provinces which are in close proximity to the Sistan Balochistan Province or border Iran such as Herat.

Mechanisms and initiatives are present between both countries which could allow for more transparency as well as tackling the smuggling of illegal trade. Both countries had managed to set up a Joint Economic Commission which is known as the JEC that was inaugurated in 1986 and since then has not been revived due to different regional and global factors which have influenced the relationship. As a commission, the body promotes trade between both states and is still operational, given that its last session which was held in Pakistan in 2014 and the results included the development of Medium Sized as well as Small Scale industries as well as more cooperation between both the Chabahar Ports as well as the Gwadar Port for more regional

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Connectivity10. Investments, economic assistance and ensuring great cooperation to tackle illegal trade are all crucial elements which have been explored by both respective governments; however, illegal trade requires a similar mechanism which attempts in scrutinizing and documentation of cross border trade, particularly given the fact that both states have suffered due to trust deficits on the issue. The P5+1 Iranian Nuclear Deal allows for more opportunities to develop such mechanisms, given that the JEC was largely ineffective due to US as well as Saudi coercive pressure. Recently developments such as, Pakistan’s landmark resolution regarding the Yemeni Crisis, where it was decided that Pakistan where neutrality served an important purpose for furthering Pakistan’s interests with the Gulf states and should also be pursued if bilateral cooperation with over trade is taken into consideration.

10 Sial. S, An Analysis of Emerging Pakistani- Iranian Ties, Norwegian Peace Building Resource Center, Report, 2015, p. 2.

NUST Research Team Monthly Background Paper 15-10-2015

Chapter 3: Prospects and challenges for the Iran- Pakistan Gas Pipeline:

The Iran and Pakistan Gas pipeline is a 2,775 km long project initially conceived to stretch from Asaluyeh in Iran to New Delhi in India, passing through the restive Balochistan Province while also passing through Karachi as well as Multan to New Delhi11. The project has witnessed severe delays, controversies and hurdles which range from unit pricing to gross neglect from Pakistan. In addition, the gas pipeline stretching to India has been heavily influenced by the tumultuous India/ Pakistan relationship, where both states had fought 3 wars, of which the Kargil Conflict was a classic example of a limited war between two nuclear weapons states. The Kargil Conflict took place four years after the 1995 conception of the Iran Pakistan and India gas pipeline and the project has been held hostage to skirmishes and conflicts which have existed between both India and Pakistan as well as India’s foreign policy decisions which have sought to align itself closer with the United States with the 2008 Indo-US Nuclear Deal.

The issues continuously surrounding the Iran Pakistan Gas Pipeline which need to be addressed include the following:

3.1 Unit Pricing:

Unit Price is defined as the price per unit that stakeholders have agreed for consumption in the pipeline. The unit pricing issue is contentious with both India and Pakistan at loggerheads with the Iranian leadership over the course of this project. Some of the reservations include the following:

 Iran’s repeated emphasis on due cognizance of market realities and dynamics, where a regular appraisal of the prices is crucial for the sustainability of the project.12

11 Munir. M 2013, Iran Pakistan Gas Pipeline: Cost- Benefit Analysis, Journal of Political Studies, Vol.20, Iss.2, pp. 161-178.

12 Sial Safdar, 2007, ‘ IPI Energy Security and Strategic Conflicts’, Pakistan Institute for Peace Studies, pp. 2-7.

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 The Indian and Pakistani claims of unit pricing to focus more on cheaper costs in relation to the MBTU (Million British Thermal Units) and have agreed on realistic estimates such as US $ 4.93 per MBTU for the entire duration of the project.13

 The initial contract proposal where it was postulated that Pakistan and India would both benefit from 60 million metric standard cubic meters of gas per day which would be split equally during the first phase of the project is a point of contention, given that India’s interest in the project heavily depends on its foreign relations with the United States as well as the relationship between Iran and the US after the P5+1 Nuclear Deal has been signed as well as the durability of the Nuclear Deal.14

 There is a ‘Price Revision Clause’ in the project articulated by the Iranian leadership which was rejected by the Indian and Pakistan governments given that the initial agreement over a transportation tariff was $0.70 per MBTU. India previously was not willing to pay more than 0.55 dollars per MBTU which amounts to $220 million annually.1516

 Trends of unit pricing certainly suggest that the quantity of the pipeline which is $11 per unit, for Pakistan is 100 Billion Cubic Meters is far higher than other proposals signed between Iran, Russia, Azerbaijan and Turkey.17

In addition, the gas pipeline has also been subject to trust deficits which have existed between Iran and Pakistan over completion of the scheduled construction on the Pakistani side which starts from the Sistan Balochistan province into Pakistani territory stretching from Khuzdar

13 Ibid.

14 Sial Safdar, 2007, ‘ IPI Energy Security and Strategic Conflicts’, Pakistan Institute for Peace Studies, pp. 2-7.

15 Tehran Times Report, 2007, ‘ Iran to give Peace Pipeline Contract Finishing Touches this week’, PIN, Tehran.

16 Sial Safdar, 2007, ‘ IPI Energy Security and Strategic Conflicts’, Pakistan Institute for Peace Studies, pp. 2-7.

17 Ibid.

NUST Research Team Monthly Background Paper 15-10-2015

Onwards. In 2013, for example, both states had focused on swifter implementation of the pipeline where 780 Kms of Iran’s pipeline was completed in the Iranian Border City of Chabahar18. However, Pakistan failed to complete its portion of the pipeline which was initially started at the South Pars Gas Fields, where justifications such as sanctions on Iran prior to the P5+1 Nuclear Deal were cited as the reason19. In addition, the pipeline has suffered due to banks and international markets not willing to become actively involved in a project which was previously subject to sanctions and coercive pressure which has raised uncertainty and eroded investor confidence. Progress has also been delayed since the PML N government came into power where there was no evidence of any allocation of financing from the Federal Budget to the project which was largely due to Saudi Arabian and American pressure20. Nevertheless, given that the agreement was initially reached between both states despite similar pressures, Pakistan would be facing the risk of paying back penalties to the Iranian government for falling back on the scheduled completion of its portion of the pipeline due to the erosion of investor confidence as well as pressure exerted by the United States when Iran was under sanctions.

The Post N-Deal Iran however, has allowed for more options to explore the intricacies associated with the pipeline project. The delays which were present when the country was under sanctions could now be tackled, given that this deal opens up Iran to the regional and international market given its massive gas reserves. The Deal however, is also subject to time constraints, where a nine year span as well as Iran’s compliance with the precedents of the agreement which involves the reduction in enrichment activities has to be met in order for speedy gas transactions to take place between both states. Given that Pakistan has become less responsive to international pressure as far as its foreign policy considerations are concerned, this time period allows for more opportunities to engage with Iran to ensure that the project is given due consideration.

18 Sial. S, An Analysis of Emerging Pakistani- Iranian Ties, Norwegian Peace Building Resource Center, Report, 2015, p. 1.

19 Ibid.

20 Sial. S, An Analysis of Emerging Pakistani- Iranian Ties, Norwegian Peace Building Resource Center, Report, 2015, p. 1.

NUST Research Team Monthly Background Paper 15-10-2015

China’s potential as a stakeholder is an important consideration given that $ 46 Million worth of investment was injected into the China Pakistan Economic Corridor which allows for more avenues of regional cooperation21. Given that India has not expressed explicit interest due to its engagements with the United States over the Indo-US Nuclear Deal and its current alliance with the United States, China’s cooperation in having the deal materialize and even acting as a mediator for the issues which range from unit pricing issues to the trust deficits which have surfaced as a result of cross border terrorism and drug trafficking is an area which Pakistani policy makers should explore. China’s policy of cooperation has also heavily relied on impartiality and cooperation with states which have been riddled by sanctions and are governed by regimes which are considered to be regressive, oppressive and dangerous such as Zimbabwe, Iran and North Korea. This allows for China to be considered as a key stakeholder given the historic importance it has placed on its relationship with Pakistan and the Islamic Republic of Iran.

3.2 Pipeline Politics:

A further feature of Iran-Pakistan relations has been the long-running negotiations taking place over Iran’s supplying of natural gas to Pakistan. The pipeline was initially billed as the ‘peace pipeline’ as it was due to transport Iranian natural gas to India, via Pakistan. However, negotiations predictably floundered, and Iran has focused instead on pursuing bi-lateral initiatives with each state in terms of providing access to its hydrocarbon resources. The Iran- Pakistan pipeline was signed off in 2009, with construction on the Iranian side now largely complete; however, the project has been beset by delays on the Pakistani side22. A key concern is that this would mean Pakistani circumvention of the US-led sanctions regime against Iran, which would further complicate its already difficult current relationship with the United States. Keen to

21 Shah, Saeed (20 April 2015). "China’s Xi Jinping Launches Investment Deal in Pakistan". Wall Street Journal. http://www.wsj.com/articles/chinas-xi-jinping-set-to-launch-investment-deal-in-pakistan-1429533767. Accessed 10/13/2015.

22 Masuda Tatsuo, 2007, ‘ Geopolitics of Pipelines: Iran- Pakistan- India Gas Pipeline’, The Third Eurasian Pipeline Conference Report, Harriman Institute, Columbia University, New York, pg.2.

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Increase its export market, Iran had also offered to provide funding for the construction of the pipeline in Pakistan but had to withdraw this offer due to its own financial problems. Both sides had recently been looking at ways to revive the stalled project, but Pakistan has now stated that it cannot continue with its side of the deal due to the sanctions currently in place against the Islamic Republic. For the time being, Pakistan has decided that the likely penalties for not complying with the sanctions regime outweigh access to Iran’s natural gas. The current PML-N government in Pakistan also has particularly close relations with Saudi Arabia, which many feel has exerted pressure on Pakistan to abandon the project. This is where the current nuclear negotiations between Iran and the P5+1 become influential – if a deal is struck whereby sanctions are lifted, then Pakistan will have greater freedom to act, and may be less inclined to follow the advice of its Saudi allies.

NUST Research Team Monthly Background Paper 15-10-2015

Chapter 4: Terrorism and Border Skirmishes:

The recent kidnapping of 5 Iranian soldiers serving along the Iran/ Pakistan border which straddles the Sistan Balochistan Province and Balochistan, and their subsequent alleged captivity in Pakistani territory has shed light on the complex relationship between the two states23. This development comes after the visit of the Foreign Minister of Iran, Javad Zarif to Pakistan, where he stressed on the importance of the Pakistan- Iran relationship as well as highlighting the necessity for greater cooperation between Muslim countries to deal with the scrooge of terrorism24.

With western media analysis focused on continued negotiations over Iran’s nuclear program and Pakistan’s internal troubles, there is little written about the relations between the two neighbors who share a 900km border running through the heart of the Balochi cultural region25. This is a relationship that contains myriad complexities and the potential for conflict and cooperation, ranging from tackling Baloch separatism to drug trafficking and pipeline politics. The recent comments of Iranian Interior Minister Abdolreza Rahmani Fazli, who has threatened unilateral action inside Pakistani territory as a means of maintaining Iran’s security and that of its soldiers serving along the border, demonstrate the potential for a rupture and the necessity for pragmatism to prevail26.

The border dispute centers heavily on the wide spread allegations of groups such as Jash Ul Adl which Iran accuses of enjoying the patronage of the Pakistan government to operate amok within

23 BBC News Report, Kidnapped Iran Soldiers Freed in Pakistan By Militants, 2014, < http://www.bbc.com/news/world-asia-26888975>, Accessed 10/13/2015.

24 The Nation, ‘ Javad Zarif Visits Pakistan’, 2015, News Report, < http://nation.com.pk/editorials/10-Apr- 2015/javad-zarif-visits-pakistan> Accessed, 10/13/2015.

25 Baloch, Kiyya. ‘ Border Violence and the Iran Pakistan Gas Project’, The Diplomat, 2015. < http://thediplomat.com/2015/01/border-violence-and-the-iran-pakistan-gas-project/>. Accessed 10/13/2015.

26 AFP, ‘ Nisar Denies Kidnapped Iranian Guards Ever on Pakistani Soil’, DAWN News Report, 2014, < http://www.dawn.com/news/1104563>. Accessed 10/13/2015.

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Its territory27. The relationship has been strained largely due to the attacks on the IRGs or the Iranian Revolutionary Guards, which Iran has repeatedly considered to be a violation of its territorial integrity.

4.1 Countering Baloch separatists:

The Balochistan insurgency has been waged against the government of Pakistan over the premise of systematic political and economic discrimination which has left a footprint on internal security and stability in Pakistan. Addressing the Balochi separatism issue, through reaching out to the Baloch tribals and Sardars through negotiation and arbitration, is a good starting point in light of recent events in the region. The Baloch ethnic group is split between Iran, Afghanistan and Pakistan. In Iran, Baloch separatists have been less prominent historically, but armed groups have stepped up attacks in the last 10 years. In addition, the armed group Junduallah carried out several attacks on Iranian forces stationed in Iran’s Sistan-Baluchistan province from 2004, prior to their leader Abdolmalek Rigi being captured and executed by Iran in 201028.Iran has frequently raised concerns about harboring Jundullah and Jaish ul-Adl militants on Pakistani territory, and it is within this context that recent Iranian comments regarding unilateral actions across the border to maintain its security have been made. Despite the potential for conflict, the subsequent talks held between Iranian and Pakistani representatives since the kidnappings have been largely cordial, with a focus on joint measures aimed at securing the hostages’ release and further cooperation in enhancing the security of the border region. Iranian unilateral action will most likely be held off providing they receive assurances from Pakistan that they are taking the matter seriously. At this time, the Iranian government has been assured by its Pakistani counterparts that they are taking the matter seriously and that troops will be sent by Pakistan to Baluchistan to search for the hostages.

27 Shahid. S. ‘ Eight Iranian guards killed in Jaish ul Adl Attack’, DAWN News Report, 2015, < http://www.dawn.com/news/1174611>. Accessed 10/13/2015.

28 Zia Ur. Rehman, ‘ The Baloch Insurgency: Linking Iran to Pakistan’, Norwegian Peacebuilding Resource Center, May 2014 Report. pp.2-3.

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4.2 Sectarianism as divisive tactics:

Another issue which needs to be highlighted in order for bilateral cooperation to take place is the issue of sectarianism and its significance in the relationship between Iran and Pakistan. The Islamic Republic has historically favored a pragmatic quiescence on sectarian tensions within Pakistan, seeing it as a domestic issue. This should come as no great surprise to those who monitor Iran’s progress, despite the media focus on its patronage of Hezbollah in Lebanon and attempts to depict the avowedly secular Assad regime in Syria as ‘co-religionists,’ Iran has displayed pragmatism on a number of issues that defy its image as a revolutionary actor supporting its Shi’i brethren. Its support for Christian Armenia over predominantly Shi’i Azerbaijan in their conflict over the disputed Nagorno-Karabakh region (in part an outcome of the need to dampen potential separatist agitation amongst its own Azeri population) is a case in point29.

Furthermore, Pakistan’s Shi’i community is not involved in any notable separatist agitation, and thus Iran has been able to build on its confessional linkages in a more benign manner, primarily through its cultural centers and the work of the Islamic Culture and Relations Organization (ICRO). The ICRO runs Iran’s cultural bureaus abroad, and is directly accountable to the Supreme Leader, thus providing a useful diplomatic tool and an extension of Iranian soft power right from the most important center of power in the Iranian political system. It’s worth noting that Pakistan is home to the largest number of Iranian cultural bureaus in the world, with 8 centers in total run by the ICRO, providing cultural activities such as Persian language classes, religious commemorations and joint activities with Pakistani cultural organizations. Persian culture, particularly in art and literature, has a strong tradition in Pakistan, and the cultural links between the nations are an oft-repeated theme returned to time and again in official meetings between the two states.

29 Semerdijan, Harout. Harry, ‘ Christian Armenia and Islamic Iran: An Unusual Partnership Explained’, The Hill, op.ed. < http://thehill.com/blogs/congress-blog/foreign-policy/276961-christian-armenia-and-islamic-iran-an- unusual-partnership-explained>. Accessed 10/13/15.

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4.3 Afghanistan Quagmire:

On Afghanistan, there has long been potential for disagreement as both sides have supported different sides in that state’s protracted internal conflict. Iran has long provided material support to the often persecuted Shi’i Hazara minority in Afghanistan, and was a key ally, along with Russia, of the Northern Alliance in its fight against the Pakistan-backed Taliban prior to the arrival of coalition forces in 200130. Despite this, there is not any sense of any kind of war by proxy being fought here and both states are served far better by a stable Afghanistan, particularly in light of the huge number of refugees that they have both absorbed over the last 35 years. Although they have historically backed different sides, the arrival of coalition forces and Pakistan’s ongoing internal struggle with its own Taliban wing in the form of the TTP has necessitated a shift in its direct patronage of the Afghan Taliban. Since the Taliban’s ouster in Afghanistan, the Islamic Republic has gradually increased its influence in the country, particularly in the East and North which are culturally and linguistically proximate to Iran. Furthermore, while Iran-Afghan relations have been broadly positive, the Karzai government has had a tricky relationship with Pakistan in light of its links with the Taliban regime. Thus, any incorporation of moderate Taliban elements in a future Afghan government may well serve Pakistan’s interests. To this end, accommodation through recognition of informal spheres of influence could serve relations between Iran and Pakistan well, with the latter extending its influence to Afghanistan’s Pashtun heartlands as a means of enhancing control over its porous frontier with that country.

NUST Research Team Monthly Background Paper 15-10-2015

4.4 Wider geopolitics and their bearing on the Iran/ Pakistan relationship:

The last point takes us to the wider geopolitical currents that also have a bearing on relations between Iran and Pakistan, particularly in light of the US and Saudi positions. Although there was a noticeable détente in Iran’s relations with Saudi Arabia under Rafsanjani and into the Khatami era, relations between the two states have dipped considerably in recent years31. This is not only due to the recent entrenchment of the sectarian divide in the Middle East, and subsequent proxy battles for control among competing belligerents in its myriad conflicts, but also a result of increased Iranian confidence in its position in the region following the fall of two hostile neighboring regimes in the form of Saddam’s Iraq and Taliban Afghanistan32. Pakistan- Saudi relations have been traditionally close, however, this has not significantly hampered relations thus far with Iran (the pipeline issue notwithstanding).Indeed, Pakistan sees itself as something of a mediator between the two, and has given Iran assurances that it will not assist in Saudi nuclear arms development. Similarly, Iran’s good relations with India are not a hugely destabilizing force in the Iran-Pakistan relationship. Iran has trod a careful line on Kashmir, offering rhetorical support for the Muslim population there but little more as it desires good relations with India. Both sides therefore have potential bargaining chips, but pragmatism has prevailed. Pakistan’s at times troubled relationship with US, while a significant influence as noted above vis-à-vis the pipeline issue, has also been largely put to one side in dealings between the two states, with the focus being primarily on bi-lateral and regional concerns. Interestingly, the domestic unpopularity of Pakistan’s historical alignment with US foreign policy objectives is borne out by the high esteem with which the Pakistani population holds the Islamic Republic. A 2013 global attitudes survey conducted by Pew saw 69% of Pakistanis surveyed as viewing Iran favorably, with Indonesia the only other country to record a majority holding a favorable view of the Islamic Republic with 55%33.

NUST Research Team Monthly Background Paper 15-10-2015

Conclusion:

The above factors have pointed to a relationship which is fraught with potential difficulties and open to manipulation of competing agendas. Both states are, perhaps sometimes unfairly, painted as problem cases in the international system with powerful internal tendencies (be they official or unofficial) that seek to challenge the international status-quo. This, along with the above external and internal pressures makes the continued common-sense approach of both governments laudable at a time when opposing views, be they religious/sectarian in nature, or security-driven are sustaining some of the world’s bitterest conflicts. The relationship between the two states is founded on a pragmatic need to maintain a working relationship despite differing security alignments, more pressing concerns within their own ‘regions,’ and a lack of ideological confluence. Yes, there will always be competing pressures but the relationship has been largely characterized by tactful diplomacy when bellicosity could easily prevail. Despite the firm statements coming from Iran with regards to the recent kidnappings and Pakistan’s responsibility for ensuring the soldiers’ safe return, both sides have sought to work together on this issue. Furthermore, the recent upturn in the trajectory of Iran’s relations with the West, although still dependent on a mutually agreeable outcome of the nuclear talks, will also help keep ties on a sound footing.

NUST Research Team Monthly Background Paper 15-10-2015

Policy Recommendations:

 Reengage with the current Iranian regime and consider initiatives such as the Joint Economic Commission to address issues and opportunities related to bilateral trade.

 Underline the significance of issues related to projects such as the IP Gas Pipeline which includes Cost Pricing as well as delays in construction which have been subject to international pressure.

 Envisage the prospect of a Joint Counter Terrorism mechanism, which can draw heavily from the precedents of the National Action Plan to control cross border terrorism.

 Ensuring that the relationship with Iran is independent of coercive international pressure, given the sovereign status of Pakistan.

 Highlighting the need for more control over cross border illegal trade where a joint mechanism could focus on dealing with documentation regarding agricultural and non – Agricultural goods as well as weapons and drug smuggling.

 Monitoring the status of the P5+1 Iranian Nuclear Deal as any prospects for cooperation would hinge heavily on Iran’s compliance with the precedents of the deal, which will have a bearing on trading prospects between both states.

NUST Research Team Monthly Background Paper 15-10-2015

Bibliography:

Blogs:

Semerdijan, Harout. Harry, ‘ Christian Armenia and Islamic Iran: An Unusual Partnership Explained’, The Hill, op.ed. < http://thehill.com/blogs/congress- blog/foreign-policy/276961-christian-armenia-and-islamic-iran-an-unusual- partnership-explained>.

Journals:

Project on Middle East Political Science, Iran and the Nuclear Deal, POMEPS Studies, 13, 2015.

Roundtable Report, Pakistan- Iran Relations, Challenges and Prospects, Foreign Policy Series, FPS.IR.1

Journal Articles/ Reports:

Alam Shah, Iran Pakistan Relations: Political and Strategic Dimensions, Strategic Analysis Vol. 28, No. 4, 2004.

Masuda Tatsuo, 2007, ‘Geopolitics of Pipelines: Iran- Pakistan- India Gas Pipeline’, the Third Eurasian Pipeline Conference Report, Harriman Institute, Columbia University

Munir. M 2013, Iran Pakistan Gas Pipeline: Cost- Benefit Analysis, Journal of Political Studies, Vol.20, Iss.2

Salehzadeh A., Iran’s Domestic and Foreign Policies, National Defense University, Department of Strategic and Defense Studies, Series 4, Working Papers, No. 49.

Shah, Saeed (20 April 2015). "China’s Xi Jinping Launches Investment Deal in Pakistan". Wall Street Journal.

Sial. S, An Analysis of Emerging Pakistani- Iranian Ties, Norwegian Peace Building Resource Center, Report, 2015

NUST Research Team Monthly Background Paper 15-10-2015

Sial Safdar, 2007, ‘ IPI Energy Security and Strategic Conflicts’, Pakistan Institute for Peace Studies Zia Ur. Rehman, ‘ The Baloch Insurgency: Linking Iran to Pakistan’, Norwegian Peacebuilding Resource Center, May 2014 Report.

Newspaper Articles:

Tehran Times Report, 2007, ‘ Iran to give Peace Pipeline Contract Finishing Touches this week’, PIN, Tehran.

Tehran Times, 2008, Pakistan, Iran Finalize Gas Pipeline Deal, APP, Tehran.

Websites: AFP, ‘ Nisar Denies Kidnapped Iranian Guards Ever on Pakistani Soil’, DAWN News Report, 2014, < http://www.dawn.com/news/1104563>.

Baloch, Kiyya. ‘ Border Violence and the Iran Pakistan Gas Project’, The Diplomat, 2015. < http://thediplomat.com/2015/01/border-violence-and-the-iran-pakistan-gas- project/>.

BBC News Report, Kidnapped Iran Soldiers Freed in Pakistan By Militants, 2014, < http://www.bbc.com/news/world-asia-26888975>

Shahid. S. ‘ Eight Iranian guards killed in Jaish ul Adl Attack’, DAWN News Report, 2015, < http://www.dawn.com/news/1174611>.

The Federation of Pakistan Chambers of Commerce and Industry 2003-2008 < http://www.fpcci.com.pk/trade-with-countries/Iran.pdf>

The Nation, ‘ Javad Zarif Visits Pakistan’, 2015, News Report, < http://nation.com.pk/editorials/10-Apr-2015/javad-zarif-visits-pakistan> .

NUST Research Team Monthly Background Paper 15-10-2015