Growing South Asian Interests in the Persian Gulf Region:Problems and Opportunities

Jasjit Singh, Director, IDSA


The interests and relationships between the countries of the Persian Gulf region and those of South Asia are rooted in deep and long history. These had been built not only on trade (for which the Gulf region provided the linkage over land and across sea between Europe and the Indian sub-continent, on the one side, but also Africa and India, on the other) but also on cultural and civilisational affinities. Islam travelled to the Indian sub-continent (and beyond) from Arabia and Persian culture has had a profound and deep influence on the evolution of the subcontinental civilisation. This historically continuous close relationship has often also led to a certain tendency for countries of the two sub-regions to take each other for granted.

The Record So Far

However important changes have been taking place, especially during the last quarter of the 20th century. Many parameters of earlier assumptions have altered. The collapse of the Soviet Union has created a northern flank of economically weak states adjoining the Gulf region to the north. The Iran-Iraq War of the 1980s has left bitter legacies which have not shown signs of being attenuated more than a decade later. The invasion and annexation of Kuwait by Iraq against established norms created not only a serious situation for the countries of the Gulf, its impact was felt far and wide. For example, the United States' military presence in the region was not only legitimised but significantly expanded. Kuwait's security dilemma has been made far more complex and uncertain, as has been that of all small states of the region. While Kuwait suffered directly, the Indian economy was adversely affected during 1990-91. The direct impact that year was much more than Rs. 4,000 crore (over $2.2 billion) and the direct and indirect costs combined to add to the worsening balance of payment crisis. India had to single-handedly launch the biggest airlift since the Berlin Airlift to evacuate from Iraq/Kuwait (through Jordan) 117,000 Indian citizens who had suddenly become hostage to the Iraq-Kuwait War.

Earlier, the Iranian Revolution in 1979 and the Soviet intervention in Afghanistan later in the year had fundamentally altered many assumptions and parameters of the past related to the strategic environment of Southern Asia. When the Cold War ended and the Soviet Union dissolved nearly a decade ago, the negative after-effects (and it is difficult to find any positive ones) of the Afghanistan War did not go away. In fact, they may be seen to have intensified a great deal in the 1990s after regional players introduced their own agendas and methods of pursuing their political and ideological agendas. Peace in a war-torn Afghanistan remains elusive after more than two decades of fighting which have only exacerbated violence and hatred making them radical in content. Last year, the war in Afghanistan threatened to spill over into the region but for the restraint exercised by Iran. The rise of what may be termed as the "Taliban Phenomenon" rooted in, but not necessarily represented only by the Taliban in Afghanistan, threatens to have a deep and lasting impact on the civil society and stability of states of the region. The promise of oil and gas in the economically vulnerable and militarily weak states of Central Asia and the Caucasus generated new dreams and geo-political orientations. Narcotics trafficking which started in what was referred to as the "Golden Crescent" mostly to subsidise the Afghan War of the 1980s, has developed indigenous roots and threatens society and state even well beyond the poppy fields and heroin factories of Pakistan-Afghanistan.

Trans-national terrorism has acquired a serious dimension, especially where it is backed by religious extremism and radical ideologies which seek to change society and state through unparalleled violence visited on the innocents. Phenomenal quantities of modern sophisticated weapons normally available only to the more advanced armies have diffused into society, and in the hands of non-state actors, have created a new dimension of the challenge to peace and security.1 The bombing of US military installations in Saudi Arabia indicates some of the dimensions of the threat to peace and stability in the region which now appears to have been linked by a seamless web of terror as the instrument of politics by other means.2 On the other hand, US long-range strikes on targets in Afghanistan (and Sudan) with cruise missiles demonstrated the limitation of the use of high technology destructive force and the vulnerability of the adversary who then tend to increase their reliance on terrorism with modern weapons and means.

Many people expected that the nuclearisation of South Asia last year would create new instability in the region although they were unable to forecast the shape and nature of this instability. Pakistan triggered off a conventional war which India kept limited and contained in spite of the extremely adverse tactical situation. Pakistan's unambiguous military defeat along with the necessity for a political setback finally led to the army once again taking over power in Islamabad. Control over nuclear weapons had become an additional point in the struggle between the elected prime minister and the army chief that finally led to the coup. This is the first ever military coup in a nuclear weapon state and it is not certain what impact this will have on peace and stability in Southern Asia, and by extension on the Gulf region. On the other hand, Israel has extended its envelope of security concerns to the "periphery" which includes Iran as a major threat. The Western world appears to have nearly convinced itself that Iran is likely to acquire nuclear weapons soon although the International Atomic Energy Agency (IAEA) has certified to the peaceful nature of its nuclear programme. Ballistic missiles have been spreading in the Gulf and South Asia since the mid-1980s. Serious steps will have to be taken to ensure that conflict does not erupt in the region and traditional relations are used to build up stronger cooperation for mutual peace and stability in the extended region of Southern Asia.

At the same time, we need to be conscious of the domestic sources of tension and potential instability in the Persian Gulf countries. The dual-containment policy of the United States and most of its allies has resulted in economic, social and humanitarian costs to the people of Iraq for a decade, and in the cost to Iran being raised and kept high now for nearly two decades. In Iraq this has helped sustain an authoritarian regime, reducing the potential for a balanced relationship with countries of the region. Iran has stepped out to rebuild cooperative relations with the countries of Southern Asia, in the Indian subcontinent as well as across the Gulf. The future prospects of enhanced peace and stability in the region will depend on the evolution and development of these relationships.

There has also existed a level of concern regarding the issue of domestic peace and stability in the Persian Gulf countries, especially in some of the Arab states, in the future. Depressed oil prices during the 1990s, the cost of war, and high defence expenditures to sustain very high levels of arms imports have combined to place limitations on the economic strength of some of the Arab states. Changes in social and political systems in an age of globalisation are inevitable. What is often ignored is that change is taking place even if at a slow pace. Only time will tell whether such change would be accompanied by instability and even violence. The interests of all the countries of the Persian Gulf as well as of South Asia (and certainly of India) lie in peaceful change at a pace and direction sought and decided by these countries.

Oil wealth which has been the backbone of Gulf prosperity has been deeply affected by fluctuating oil prices within a fairly low range of about $ 10-20 for a number of years. The impact of reduced oil revenues in states that have had little other economic production base has far- reaching consequences. The rate of output starts to define the level of satisfaction in the country. For the longer term, there is little alternative but to expand the economic base and means of production of the Gulf countries beyond the oil revenues to value-added output and industrialisation. For this purpose, the sparsely populated Arab states require more people, preferably those with skills and professional qualifications who can only come from other countries. The choice would be to admit such people by grant of nationality, or by inducting them on a temporary basis even if that period keeps getting extended for years. Both options have their pros and cons; and the Gulf states should make their choice of policy themselves. But fluctuation in policy would create a negative impact. Expanding the base and span of economic activities is already happening though at varying levels and rates in different countries. Dubai, for example, has come to rely heavily on business and trade activities. Oman was the founder member of IORARC (Indian Ocean Rim Association for Regional Cooperation). Iran's participation in IORARC will add to its involvement in broader economic cooperation. At the same time, mention must be made of the increasing rate of growth of India's economy and the deep crisis in Pakistan's economy. Both require a deeper economic and political engagement with the Gulf region for a number of reasons.

.c.South Asian Interests

The interests and policies of the countries of South Asia toward the Persian Gulf countries is by no means uniform and similar in spite of a common historical heritage. This has a great deal to do with the nature of evolution of the South Asian states rather than any intrinsic reason. Among the South Asian states, India has the largest set of interests in the Persian Gulf on issues which are vital to its national strategic priorities. At this stage, it may be useful to summarise the main interests of these countries in the Gulf region as indicated in Fig. 1.

Fig.1: Comparative List of Interests of South Asian Countries in the Persian Gulf Region.*

Country Interests in Persian Gulf Region

India _ Historical/cultural/civilisational affinity.

_ Peace and stability in the Persian Gulf region and its peripheral zone.

_ Economic-trade interests.

_ Uninterrupted oil supplies at reasonable prices.

_ Future access to natural gas.

_ Safety and security of sea-lanes of communications.

_ Access to Central Asia (through Iran).

_ Moderating any religious extremism and/or trans-national terro-rism (or support to it) emanating from the region or its periphery.

_ Safety and security of (3.8 million) Indian expatriate population.

_ Continued remittances by expatriate population.

_ Good friendly relations with Muslim countries.

_ Seeking cooperation to control narcotics trafficking and proliferation of weapons in the region.

_ Facilitating Muslim pilgrimage to holy places.


_ Historical/cultural affinity.

_ Islamic religion as the basis of cooperation.

_ Expanding strategic depth into Islamic countries on the western side, mainly in opposition to India.

_ Economic interests (on a smaller scale).

_ Remittances by (declining) expatriate population.


_ Religious affinity.

_ Limited expatriate population and remittances.

Sri Lanka

_ Limited trade.

_ Limited expatriate population and remittances.

* The other countries of South Asia have only limited interests in the Persian Gulf region.

.c.Economic Interdependence

The Persian Gulf region and South Asia represent the immediate and extended neighbourhood for each other where a strong economic interdependence has developed over the years. The two regions have traded with each other for centuries. Oil revenues, especially after the early 1970s, had increased the scope and extent of that trade. The scale and importance of this economic linkage may be judged from the fact that most of the nearly $2 billion "unofficial" trade between India and Pakistan (as compared to the official $200 million trade) is managed offshore from the Gulf countries! India's trade with the Persian Gulf states is now around $10 billion a year, including a fast increasing export market of over $2.5 billion a year. Such trade requires durable peace and stability in the region to sustain itself leave alone for its growth in future.

The energy factor binds the interests of South Asian countries (essentially India's) with those of the Persian Gulf region. India constitutes a major portion of what can only be described as the "energy demand heartland" of Asia which includes China and most states of South-East and East Asia. Around this heartland exists an "energy resource periphery" stretching from Siberia to Central Asia, Persian Gulf, Arabian Sea, South China Sea and East China Sea. Consumption of oil and gas is increasing rapidly in China and India. Oil and gas comprise the only strategic resource base which could become the source of future conflict. The war in Afghanistan (and on and near the western shores of the Caspian Sea) is directly fed by perceptions of the need to gain control over future routes and sources of supply of oil and gas. To illustrate the point of energy needs for the future, it may be useful to look at India's needs and interests which are likely to be met almost entirely through deeper co-operation with the Persian Gulf-Central Asian region which may yet provide the longer term basis of altering India-Pakistan relations into more cooperative interdependence.

India's current oil consumption is around 83 mt. per year. If the Gross Domestic Product (GDP) rate grows at an expected rate of 7 per cent (it has grown at an average annual figure of 6.6 per cent in real terms for the past nine years), the requirement will be 350-400 mt. per year by 2010. Since 1984-85, when oil production was at its peak, India was importing only 30 per cent of its crude supplies. Since then, though production has been increasing, it could not keep pace with rising demand. Therefore, while production of crude was 33.02 mt. in 1990-91, it has been more or less stagnant since then, with production at 33.87 mt. in 1996-97. As a result, India's import dependence on petroleum products has increased from 40 per cent in 1985-86 to about 66 per cent last year. In fact, there has been a 32 per cent increase in imports of petroleum and products in the current fiscal year so far, and imports are estimated to rise from $6.4 billion in 1998-99 to $8.5 billion in 1999-2000.

But we must also note the contradiction in the interests of the oil producers and consumers (like India). The producers would need higher prices to enable greater oil revenues. But the consumers naturally seek lower prices. If the price of oil goes up, the consumers from developing countries are bound to economise more on the consumption in an effort to manage the budget. This would reduce demand which unless compensated for by other factors would, theoretically at least, tend to push the price down again. On the other hand, if the oil price goes down, oil revenues drop and in the absence of economic production source in Arab countries, their ability to provide employment and services through expatriate populations may be reduced, which would be to the detriment of the consumers from the developing world who provide such manpower. Thus, a cycle of interdependence which may not be so visible normally gets established wherein the core interests of the Gulf countries have become deeply linked to those of South Asia, especially of India.

Natural gas (NG) accounts for about 8 per cent of energy consumption in the country. The current demand for NG is about 96 million cubic metres per day (mcmd) as against availability of 67 mcmd. The aggregate NG production during 1997-98 was 23 bcm and is likely to peak in the next two to three years. By 2007, the demand is expected to be around 200 mcmd. Though India does not import any NG at present, imports are scheduled to start from 2001-02. In 1996-97, domestic production of NG was nearly 23 bcm, whereas demand was estimated at 30 bcm. By 2000-01, the growth in demand was estimated to reach 55 bcm, whereas supply is projected to be only 28 bcm. By 2005, demand is expected to increase further to nearly 75 bcm.3

The import of NG from Oman and Iran through submarine and onshore pipelines has been considered, although both proposals have run into problems. These pipelines are projected to supply 20 bcm and 27 bcm of NG respectively. Technical (laying pipelines at a depth of 3.5 km) and financial problems (project costs rising to over US $7 billion), along with the prospect of insufficient reserves, have stymied progress on the India-Oman project.4 Pakistan's refusal to allow offshore surveys have added to the complications. Meanwhile, the Iran-India project, with pipelines routed either on the seabed or overland via Pakistan, is uncertain, in view of Pakistan's refusal to allow its territory (both maritime and land) for transportation of oil and gas from the Gulf region to India which has the largest growing market. If Gulf pipelines can be laid across India (through Pakistan) where a network of pipelines is already being expanded, their extension of such a pipeline to South-East Asia also becomes worth consideration.5

One of the most crucial areas that bind the Persian Gulf (and Arab states in particular) with South Asia in serving mutual interests is that of economic interdependence because of the substantive South Asian expatriate population in the region. This population is estimated at around 5.7 million (over 3.8 million Indians, 1 million Pakistanis, 500,000 Bangladeshis and over 200,000 Sri Lankans). Unlike even about a decade ago, the demand is less for unskilled labour and more for semi-skilled and skilled/professional people. This population forms a vital component of the economic activities of the Gulf states. In turn, they also contribute substantively to the foreign exchange earnings of their home country. Remittances by Indian expatriates from the Persian Gulf now amount to approximately $6 billion a year which is a major asset to the country, besides improving the earning capacity of the individuals and the families involved. The process has strengthened mutual interdependence which would be preserved for a long time to come if peace and stability in the region are not disturbed.

Connected with the issues of economic interdependence is the issue of access of South Asian countries to Central Asia (with the exception of Pakistan which has land access, though fouled up by the Afghanistan situation) for trade and transit. Access through Iran, thus, becomes critical for other countries, especially as long as peace does not return to Afghanistan and access to the region is not opened up by Pakistan. India and Iran have worked together for some years to establish agreements and means of such access.

.c.Potential for Instability

A great deal of the potential for instability in the region emanates from intra-regional asymmetries and rivalries/tensions. These extend into disparate political and ideological goals and objectives. Wahhabism has come to be associated with a more than missionary zeal to impose its own version of political and social norms, at times with a heavy hand on Muslim societies. Wahhabi support to the Taliban is but one dimension where religious extremism finds a strong support base in such ideologies. This creates serious problems for multi-ethnic societies with diverse sub-cultures like that in India. Pakistan, in spite of being an Islamic state, has been increasingly sliding down the road of sectarian conflict and violence which is tearing its society apart and has even led to tension in relations between Iran and Pakistan. Saudi Arabia may feel it necessary to promote Sunni orthodoxy bordering on fundamentalism but it tends to divide Muslim communities, besides creating tensions and even conflict with non-Muslim societies. We cannot talk of stability in the Persian Gulf region if destabilisation gets promoted in the contiguous region.

.c. Aggressive religious extremism has been promoted in the region by some players which tends to point the finger at the Cold War policies related to opposing the Soviet Union in Afghanistan of which the Taliban phenomenon is perhaps the most radical demonstration. Trans-national terrorism has been on the increase and Osama bin Laden is symbolic of the trends and effects of modern, highly motivated, religion-driven trans-national terrorism with modern means of violence at the disposal of the perpetrators of such violence. Narcotics trafficking and money laundering have found refuge in the Gulf region in the past as the case of the Bank of Credit and Commerce International (BCCI) indicates.6 Afghanistan has been the epicentre of religious extremism mixed with narcotics and trans-border violence. But the religion-based armed violence has spread inevitably to sectarian conflict. This is most visible in the deepening and expanding Sunni-Shia conflict in Pakistan during the 1990s.

Security of small states is a serious problem as the invasion and annexation of Kuwait demonstrated in 1990. Very low density of population, high per capita incomes, narrow national decision making base and ideological/political tensions with states of the region add to the sense of vulnerability. Heavy reliance on expatriate labour from poorer countries of the Middle East in the past has created an additional sense of vulnerability. Not all the expatriate populations have kept away from local and regional politics.

With regard to the individual states of South Asia and the Persian Gulf countries, the strategic logic of interests is somewhat different in each case. It is only in the case of India that a correspondence and interdependence of interests across the board, especially in economic and trade areas, exists as a factor of stability since it has established a high level of interdependence on secular factors. While some elements of such interests are present in Pakistan and the Gulf countries, these get submerged by religious factors. Pakistan's goal is to exploit the Muslim religious factor to its advantage in seeking the support of these states against India. A number of states of the region have sided with Pakistan in the past in its bilateral disputes with India. The fact that India has the second largest Muslim population among the countries of the world is apparently not known or is consciously ignored. Serious tension and confusion is caused among the Muslims of India by the projection of politico-economic differences and disputes in Islamic terms which then creates tensions and an undesirable sense of vulnerability among them to their detriment in a liberal but secular polity. But with the economic life of most Gulf countries dependent on a large expatriate population from South Asia, peace and stability in the region could be affected by the injection of the bilateral disputes of the countries of South Asia into the Persian Gulf region. The risk is obvious in view of the attempts to use religion as the basis of inter-state relations.

During the 1990s, the attempt to build leverages essentially against the West (especially after the Kuwait War) depended heavily on getting unity among Islamic states and projecting "Islamic" issues in the international arena. This led to Kashmir and Bosnia being increasingly a theme of Organisation of Islamic Countries (OIC) resolutions. But Islamic unity has remained as ephemeral as ever before, otherwise Bangladesh would not have sought independence, Iraq should not have tried to destroy Kuwait as an independent prosperous state, and Afghanistan should not be at war with itself with the Mujahideen on one side and the mujahid Taliban on the other. Religion has not succeeded in moderating, leave alone removing, the intra-Islamic tensions and disputes. Many states, therefore, prefer to depend upon the United States to provide military security. This creates its own set of problems because of the more orthodox (leave alone radical) Muslim population's and clerics' objections and opposition. In fact, many acts of terrorism in the region have been inspired by this problem.

There is also a serious problem for peace and stability created by the US policy of "dual containment" of Iraq and Iran. This receives an element of support from some regimes in the region, primarily because of the apprehensions about the intentions of Saddam Hussein and the distrust of Iranian policies. As for the latter, the more recent efforts of Iran to establish greater trust in the Arab states across the Gulf are to be welcomed and they need to be fully reciprocated. The problem of US policies which tend to introduce a mini-Cold War in the region continues to dog the region and beyond. But it ought to be clear to an impartial observer that containment in the post-Cold War era is neither feasible nor desirable. The prospects of peaceful change would be higher if containment strategies are replaced by a carefully crafted strategy of engagement. Some signs of change in US policy can be discerned; but the issue is that of its being enough or being too little and too late. It will certainly remove the problem for many states to have to choose between supporting US military presence in the region and regional cooperation to reduce potential instability and challenges to peace and security. The problem, most people would agree, is not the US military presence in the region and its engagement with countries of the region, but of the terms of that engagement. The sooner steps are taken, therefore, for the re-integration of Iraq into the international community and of "normalisation" of Iran, the better it would be for regional peace and stability.

There is a perception propagated mostly in the West about the risks of nuclear and missile proliferation. It is true that the region has six out of the eight nuclear weapon states. But of these, only in the case of Israel are its weapons oriented to the states of the region; and the United States has in the past held out a nuclear threat in the region. Pakistan's nuclear posture also has relevance because of the "Islamic" overtones in its orientation, especially when seen in the context of Pakistani ambitions of assuming a leadership role among the Muslim states. India's nuclear weapons have been clearly defined as required for deterrence, only for self-defence against a nuclear threat to India. Iran's position is not easy as it is now bracketed by two nuclear weapon states (Israel and Pakistan, of which the former has increasingly articulated the Iranian threat as the new problem) and is hemmed in by the third (the United States) from the south, with the fourth (Russia) to the north. But objectively speaking, there is little evidence of Iran moving toward a weapons programme although it could if it wished to do so. Unfortunately, the Western countries' policies of targetting Iran (a non-nuclear member of the nuclear Non-Proliferation Treaty_NPT) as a proliferation risk may finally become a self-fulfilling prophecy.

Iraq has been de-nuclearised_for the time being. But it would be useful to remember that it obtained technology for its nuclear and missile programme from West European countries. India was approached but in spite of close relations and Iraq's offer of paying well, India did not transfer any technology.

As regards ballistic missiles, concerns are expressed so often by conventional wisdom about the increasing capability of Iran. Two aspects need attention. Saudi Arabia was the first Persian Gulf country to introduce intermediate-range missiles in the region. In fact, at that time, Chinese supply of these missiles violated the MTCR (Missile Technology Control Regime), the missile non-proliferation regime set up by the US along with some of its allies. But this never attracted any criticism leave alone any non/counter-proliferation steps by the United States. Iran suffered heavily during the War of Cities phase of the Iran-Iraq War when Iraq regularly targetted Tehran in 1988. This is believed to have been a major factor that led to Iran being forced to accept the "cup of poison" of ceasefire. It would be logical to expect Iran to look to ballistic missiles for strategic deterrence against the missile threat that has only intensified since 1988 in spite of concerns so frequently articulated. But it is surprising that Pakistan's acquisition of 1,500-2,500-km range ballistic missiles has attracted less attention than the missile tests of Iran!

.c.Strengthening Peace and Stability: Opportunities for Cooperative Engagement

India looks to the countries of the Persian Gulf not only in terms of historical and cultural affinity, but as a partner in the growing economic strength of its one billion people with the world's second largest market growing rapidly. And its approach would be beneficial not only to India but also to all countries of South Asia and the Persian Gulf. The basic approach of strengthening peace and stability in the region should be seen in terms of not religious affinity but of future mutual economic benefit and prosperity. This would require:

l Strengthening economic interdependence through Persian Gulf participation in the grand enterprise of Indian economic-industrial-technological growth. The Indian economy has grown at an average annual growth rate of 6.6 per cent during the past nine years.

l Moderating if not eliminating cross-Gulf tensions.

l Re-integrating Iraq into the international community with dignity and sensitivity at an early date.

l Strengthening cooperation between Gulf Cooperation Council (GCC) South Asia-Iran.

l Change in the US policy of dual-containment which has long outlived its utility if it had any. The UN sanctions policy would also require modification if not a substantive change.

l Addressing the negative impact of religious extremism, trans-national terrorism, narcotics trafficking and trans-national crime.

l Bringing peace to war-torn Afghanistan and, as the new ruler of Pakistan stated, "see a truly representative government in Kabul."7

.c.Strengthening Interdependence

In terms of policy options to achieve these goals, let me address two issues that could form the basis of future action.

The energy demands of India and the countries around it are likely to increase at an almost exponential rate in the coming decade if the process of socio-economic development and industrialisation has to keep pace with the needs of the times. Among the various sources of energy, oil and gas stand out as critical. Large countries like India and China are importers of oil. The Persian Gulf region contains over 60 per cent of the world's resources of hydrocarbon energy resources. Nearly 40 per cent of the world's crude oil imports pass through the Straits of Hormuz. Oil and gas pipelines from Oman and Iran to India, and from Turkmenistan to Pakistan through Afghanistan have been under consideration. Disruption or disputes over supply of oil and gas could once again be a serious source of insecurity. It is relevant to note that the previous oil shocks had a profound and deleterious effect on the economies of developing countries like India.

One of the many areas of potential regional cooperation rests with the oil and gas pipelines from West Asia to South Asia. Access to oil and gas supplies from Persian Gulf region and Central Asia will be an important factor in future for the economic growth and well-being of countries of South Asia. In the case of gas (as also oil) pipelines originating from Oman/Qatar, the option to use the ocean route poses its own challenges in techno-economic as well as politico-security terms. But their transportation across the narrow Gulf and joining with an overland pipeline to South Asia would create tremendous opportunities for co-operation. This may seem unthinkable to many at this point. But this may become absolutely necessary for mutual benefit in the not too distant future. In that case, the critically relevant countries involved will be Iran, Pakistan, and India, besides extra-regional countries like the USA, whose policies and actions would influence the politico-security situation. In the case of pipelines from a Central Asian country, Afghanistan (and Iran) becomes a critical factor as an additional transit country.

Logically, oil and gas pipelines through Pakistan to India and further east offer the most beneficial option. Political difficulties will need to take the economic realities and compulsions also into account. There is concern in India that any overland pipeline through Pakistan would provide the latter with a stranglehold over India's well-being and security. At the same time, there is a strong opinion in Pakistan which objects to any form of economic cooperation with India. There are concerns about the security of such pipelines. But an objective analysis would reveal that the bulk of the concerns are not supported by facts.

Overland oil/gas pipelines from West/Central Asia through Pakistan to India would strengthen the economic growth of both Pakistan and India. Both have opted for liberalised economies and rapid growth of export-led industrialisation which will require much higher levels of energy consumption than the current levels, especially in India, whose population crossed the one billion mark in August 1999. The ability of these countries (and, in fact, the whole region) to successfully cope with the revolution of rising expectations depends heavily on the success of such growth. The alternative is continued poverty and inequity with predictable consequences.

As regards security of potential overland pipelines, it needs to be noted that conceptually, such pipelines would be similar (though in a reverse direction) to the water flowing through the Indus River system from India to Pakistan. India and Pakistan finalised the Indus Waters Treaty in the late 1950s. This treaty has withstood the test of time (and three wars, besides continuing political tensions and numerous downturns in relationship) since then. Knowledgeable people on both sides agree that the treaty has been meticulously implemented in letter and spirit during the past four decades. It needs to be remembered that Indus water is as critical to Pakistan and its economy as the oil/gas pipelines will become to that of India. There is, thus, little cause for apprehension with regard to the security of the pipelines. The incentives to sustain potential pipelines would be even greater with the inevitable participation of third and fourth partners in the arrangement. This would open a new era of regional cooperation wherein all countries of the region will benefit. In fact, investments by the Persian Gulf countries in industrial enterprises in India run by gas/oil transhipped through the pipelines could further cement not only the economic viability of the project, but also work to expand the economic production base of these countries beyond the oil industry. The interdependence thus created would naturally moderate negative impulses in political relations if and when they tend to crop up.

.c.Moderating Tensions

To start with, we need to accept that Persian Gulf-South Asia co-operation for peace and stability will be increasingly needed in future. Both sides can play a positive role in moderating tensions in their own as well as in the other regions. For example, both Iran and the GCC countries could contribute a great deal to moderating tensions between India and Pakistan without mediating or taking sides. Some attempts in recent years have been made to moderate cross-Gulf tensions. But a great deal of work needs to be done before peace and stability can be made durable. Given the nature of relations and conflicting interests of various countries of the region, especially the rivalries and ambitions of Saudi Arabia and Iran, the two larger powers of the region, official processes will take time and effort with the natural risk that they could get stalled by misunderstanding and unforeseen circumstances. Yet regular dialogue and exchange of views would be necessary for re-vectoring thinking and policy toward more cooperative framework. This could be best achieved by a Track-II process not dissimilar to the CSCAP (Council for Security Cooperation in Asia-Pacific) process. There is a need to take a leaf from the Association of South-East Asian Nations (ASEAN) in this regard. Institutions dealing with study and research in strategic issues and international relations are growing in capability, strength and credibility both in the Gulf region as well as in South Asia. It is time that they start being utilised for exchange of views on issues affecting peace and stability in Southern Asia and beyond. The deliberations among the institutions would be available to governments to accept and follow up or reject. But the greatest advantage of such a semi-official forum would be a continuing process of dialogue and exchange of views and perceptions and through that route, a reduction of mistrust and misunderstanding.

.c.Conclusion: India and the Gulf Countries

India has the world's second largest Muslim population. It is likely to continue to remain politically neutral in intra-Arab or intra-Islamic rivalries. It has also not supported the extreme approach of containment of Iran. In fact, it has sought to implement the strategy of "constructive engagement" that the US advocates with respect to other countries like China, but has not been willing to apply to Iran so far. As it is, containment of a middle power is neither feasible nor desirable in the post-Cold War era. Seen from this perspective, India has sought to provide the function and role of a bridge across the Gulf even if it is not seen as such by many in the region. The fact that deep human and economic stakes define the practical dimensions of an old historical and cultural relationship is an important factor shaping the Indian approach which has always placed higher emphasis on peace rather than security.

There are strong and varied incentives for India to maintain co-operative relationships with all the states in the region. The expatriate population is likely to undergo changes in future depending upon how much the GCC countries move away from near total dependence on the oil economy. Increasing demands of employment of nationals would tend to reduce the opportunities for employment of expatriates. But expansion of the base of economic production would increase employment opportunities. In all likelihood, more skilled manpower would be needed in future when the Gulf countries expand economic opportunities in the region. The Gulf crisis of 1990 had cost India heavily in economic and human terms because of the disruption of trade and economic activities when it was also faced with a serious challenge to evacuate more than 200,000 Indians from Iraq and Kuwait in 1990 completely through its own resources. Now there are more than 3.8 million Indian expatriates working in the Persian Gulf states and this is a major contribution to the economic growth and stability of not only these states but also of India. It has also deepened the understanding and interdependence of the two sides. But this large Indian expatriate population is also hostage to the prospects of peace and stability in the region. This only adds to the stakes India has in enhancing peace and co-operation and points to the way ahead for deeper cooperation between the states in the Persian Gulf and India.



1. For an exhaustive study, see Tara Kartha, Tools of Terror: Light Weapons and Indian Security (New Delhi: Knowledge World, 1999).

2. For an interpretation of religion to justify terrorism, see Brig. S.K. Malik, The Quranic Concept of War (Lahore: Wajidalis, 1979).

3. Special Correspondent, "Natural Gas: Imports to Meet Supply Gap", The Hindu Survey of Indian Industry; 1997 (1997), p.161.

4. See Narsi Ghorban, "Middle East Natural Gas Pipeline Projects: Myth and Reality", The Iranian Journal of International Affairs, Fall 1996, p.649.

5. Aurangzeb Z. Khan, "India and Pakistan: Bilateral Cooperation in the Energy Sector", Stimson Centre Report, 1997, p. 93.

6. For an account, see Jonathan Beaty, The Outlaw Bank (New York: Random House).

7. General Pervez Musharraf, speech delivered as the chief executive of Pakistan on October 17, 1999, Dawn International, October 18, 1999.