– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

The strategic importance of Iran’s Chabahar port is as a viable alternative land route to Afghanistan bypassing Pakistan. However, more significant is its potential as a new trade route to Central Asia’s minerals and markets of Afghanistan, Turkmenistan, Uzbekistan, Kazakhstan and other Central Asian countries east of the Caspian Sea.
(The article first appeared on South Asia Monitor China sniffs around Chabahar: Will India get its act right? ). 

Recent news of China’s offer to Iran to upgrade the Chabahar port on the Persian  Gulf (72 km west of Gwadar port in Pakistan that is also formally under Chinese control), has once again stepped up pressure on the Indian government to act quickly and decisively in investing in Chabahar.

Several other reasons, besides countering Chinese dominance, have been cited: inter alia access to Afghanistan bypassing Pakistan, role in ending Iranian isolation and facilitating US-Iran rapprochement.

However, this article argues that knee jerk reactions to disparate geo-strategic events and rhetoric are not fruitful in this case. Utility of a port is as good as the logistic linkages that connect it to major areas of influence, markets and investment destinations, infrastructure in and from the port, and most importantly, a clear strategy on how connecting areas are to be used.

And in this context the Indian establishment is making the same mistakes with idea of Chabahar that it has repeated over and over again in the region – lack of a long term geo-strategic plan. The question is not whether India needs to invest in Chabahar or not, the geo-political and energy security stakes for not upgrading are too high. What needs to be asked is the purpose of this exercise, and work backwards for formulating decisions on developing infrastructure, engagement with stakeholders and addressing challenges that exist.

Without a clear plan on how and for what Chabahar is to be used the idea will fall into oblivion like many of India’s other initiatives, including the International North South Trade Corridor (that begins from Bandar Abbas port in Iran and via three separate routes connects to Europe)

Challenges to developing Chabahar Port

Significant challenges exist on the side of all stakeholders, which have to be systematically addressed as part of the broad strategy of developing Chabahar.

Feasibility of Logistical linkages

Despite its strategic location as an invaluable access point not only to Afghanistan, but also to Central Asia, Russia and Europe there is no evidence that traffic has actually increased in Chabahar, or significant investments pumped in. This has raised questions about the logistical linkages from and to Chabahar, including quality of connecting road and rail links, ease of traffic movement, toll and border custom structures and support infrastructure.

Most major road routes at the moment run from Chabahar to northern Iran close to the Afghanistan border and then enter Afghanistan (through either Zaranj in south western Afghanistan and then connect to Highway A77 to Kabul and Qandahar or through north western Herat province), Uzbekistan (via Afghanistan’s Herat province to Tashkent) and Tajikistan (via Turkmenistan). Several alignments on these roads are disjointed and not wide enough to allow movement of big trucks and trailers. Around major cities like Mashhad (north eastern Iran) and Zahedan (east Iran) , significant improvements have taken place, however overall quality of roads requires major investments. In addition, three major rail routes have been proposed in the area that will connect to Herat, network links from Bandar-Abbas and to Central Asian countries.

Two hurdles arise in this regard:

From the Iranian quarter, the most important challenge exists in their ability to complete proposed rail and road links and upgrade infrastructure in the region, given the paucity of financial investments, due to US and EU imposed sanctions.

Second,  no clear mapping of logistical and security challenges has been done on the ground on the route connecting to Afghanistan and Central Asia, including the reign of local ‘warlords’ in the region, crime, extortion and militancy.

The curious challenge of Afghanistan

Notwithstanding multiplicity of intentions, Afghanistan remains central to India’s lean towards Chabahar and is a key stakeholder for development of all proposed connecting infrastructure.

In this regard, another significant challenge to the development of Chabahar, lies in strong ‘alternate power centers’ that exist within the Afghan establishment and have a stake in ensuring that the route through Pakistan’s Karachi port remains viable.

Second, the uncertain situation in Afghanistan post the withdrawal of US troops also indicates that India must proceed with caution. As much as Indian pro-active involvement is required to stabilize the region, one of the most important reason for developing Chabahar, remains commercial and investment potential. Like the ‘Wait and watch’ attitude of the Chinese in the Aynak (in Logar province) copper mines where almost no mining activity has commenced, even though it was awarded in 2007 and several other infrastructure projects, India needs to see where the balance of power tilts post 2014. Exploitation of rich mineral deposits in north and central Afghanistan, including Hajigak (iron ore mines in Bamiyan, where India’s Iron and Steel Consortium has won mining rights), can only be viable with the support of the Afghan government, whose legitimacy is uncertain at the moment.

Absence of strategic planning by India

The last challenge for India centres on an absence of strategic planning on how Afghanistan and Central Asian markets and investment opportunities are to be tapped. Separate plans will have to be drawn out for strategic purpose of both International North South Trade Corridor and Chabahar and logistic linkages, since India has emerged as a prime player in both these initiatives. The plan is to use Bandar Abbas as a gateway to economic relations with larger Commonwealth of Independent States and Europe and Chabahar for Afghanistan and Central Asia. However, little planning has been done on capitalization of trade and investment opportunities, barriers that exist and political negotiation strategy in these countries.

A blueprint also needs to be made about how the US establishment will be tackled over proposed massive investments by India into the Iranian infrastructure. And here India has the potential to play a strategic game – a) by reducing US’s dependence on Pakistan for supply routes, and b) creating ‘economic stakes’ for Iran to be drawn out of isolation and integrated with transnational commercial activities.

Balancing out the Odds

Notwithstanding the challenges to development of Chabahar port and logistic linkages that have been highlighted above, the aim of this piece is not to question the Indian decision to invest in Chabahar, but rather to suggest steps that can help make an informed decision. Strategically, development of Chabahar can be a ‘Game Changer’ for all those involved:

For India, it can give access to new markets and investment opportunities, securing the hydrocarbon supplies. For Iran, it will inject much needed resources into the economy – whether in the form of cash or creation of infrastructure and help the regime in integrating with the global commercial activities. For Afghanistan, access to an alternative warm water port can help reduce dependence on Pakistan’s Karachi port and give a boost to investments in the country.

And for the US, an alternative logistics route can open up that bypasses Pakistan, thus reducing dependence of US and NATO forces on Pakistani establishment. In addition, the trade and transport movement that this will unleash has the power to create ‘economic stakes of stability’ for Iran.

However, certain operational, logistical and security related questions will determine ‘How, When and in what way’ should these investments be made by India. A Four-Step Approach is proposed:

Step 1: On-ground visits and surveys must be undertaken on priority to understand the operational, logistical and security feasibility of the port and which logistic linkages should be developed. Combining sophisticated technology tools like Geographic Information System, Intelligence and Risk Management Systems etc with pro-active ‘on-ground’ intelligence can help in determining the nature and timing of investments.

Step 2: A Return on Investment must be calculated for investments in Chabahar – centering on geo-political stability and energy security on the one hand, but also trade and investment feasibility.  For this, India must get right its strategic vision for the region, including its export and investment model in Afghanistan and Central Asia, access to hydrocarbon resources and how a network of pipelines, roadways and railways can help further its vision.

Step 3: It is necessary to understanding all relevant stakeholders, their motivations and especially where the balance of power is likely to tilt in Afghanistan.

Step 4: Formulation of a strategy to negotiate with the US and other Western powers. The biggest challenge for engaging with Iran remains the US intolerance of any country engaging in commercial relations with Iran. India has rightly played the card of access to Afghanistan as the sine-qua-non of their interest in Chabahar to get a US bye-in. The Indian diplomacy will have to work overtime to ensure more such strategic initiatives.

Conclusion:

Development of Chabahar and its logistic linkages presents a unique opportunity to India to strengthen its geo-strategic hold in Afghanistan, Iran and Central Asia, to secure its supplies of energy, to boost trade and investment and play a counter to Pakistan and China. However, the capitalization of this potential will require careful planning – strategic, operational and commercial.

In addition, the ground level operational questions will have to be in the framework of India’s broad strategic vision in the region: Trade and Investment, Geo-political and Energy security and Ripple effect for creation of additional infrastructure – pipelines, highways and railways.

 

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