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| Interdependence
for security |
| Ashok V. Desai |
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| Ashok
V. Desai is consultant editor
of The Telegraph |
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Prime minister Chandra Shekhar’s mercifully
short tenure saw some memorable events. The most
traumatic was the queues at petrol pumps. Luckily,
it was winter and scooter-riders did not roast in
the sun. But that did not make them love the government
any more. All heaved a sigh of relief when the clueless
prime minister fell from power.
In those times, only half of the oil was imported.
Today the country consumes twice as much of oil
products, and imports three-quarters of its consumption.
An oil shortage today would be far more disruptive;
no government can afford one. Almost two-thirds
of energy supply now comes from oil. Apart from
the oil dependence of transport, almost all the
privately produced electricity — which has
grown as public utilities have failed industry —
is generated from oil products.
Luckily, the chances of another payments crisis
have receded. With exchange reserves of $84 billion
and rising briskly, payments problems are the last
thing to worry about. Imported oil is now eminently
affordable.
But no country can have the same control on imports
as on its own production. Imports require stability
in oil-supplying countries, good relations with
them, and secure lines of supply. Only a superpower
can aspire to achieve all three; the rest must make
the best bargain they can. The US takeover of Iraq
has an oil dimension; and American ambition is not
confined to Iraq alone. It encompasses the entire
oil-bearing region from Saudi Arabia to Uzbekistan.
Security of oil supplies must be an overriding objective
in our foreign policy; we must ask ourselves what
it means in terms of alliances, equations, and military
investment.
Although the government has followed a liberal oil
exploration policy in the past five years, it has
not been able to interest the oil majors; most of
the blocks have been taken up by Oil and Natural
Gas Corporation (ONGC) and Reliance. And the concessions
have not led to a rise in domestic production; India
has become even more import-dependent.
At the same time, underpricing of domestically produced
oil has been abandoned. This has led to a huge accretion
of profits to ONGC; it doesn’t know where to
invest them. It has taken shares in peripheral concessions
across the world. They may enable it to maintain
growth; but they are not an answer to India’s
oil requirements, which continue to grow. To secure
them, Indian companies need to participate in oil
production in the Middle East and South-east Asia,
both of which are leased out to the — chiefly
American — oil majors. Entry in these regions
would be easier in co-operation rather than in competition
with the oil majors.
Natural gas can replace oil in most uses. India
has the choice of gas from a number of neighbouring
regions — Bangladesh, Qatar and Iran being
prominent. Middle East gas could be liquefied and
transported in ships, or piped across. Pipelines
would be cheaper if the quantities were larger;
and a pipeline across Pakistan would cost half as
much as an undersea pipeline. A pipeline from Iran
and UAE would be just the beginning; if American
plans to exploit Central Asian oil fructify, a pipeline
from there will also become a possibility. The government
has hesitated over such plans for a decade now because
of its Paki-phobia. But vulnerability is mutual;
if India exposes itself to the risk of supply interruptions
in Pakistan, Pakistan would also expose itself to
the risks attendant on putting India’s energy
supply in jeopardy. There is no solution to the
Kashmir problem on its own; but the more mutually
dependent India and Pakistan become economically,
the more difficult they will find it to have a fight.
Hydrocarbons are explosive, but they can be turned
into a force for peace.
It is time that our foreign policy was liberated
from its obsession with Pakistan and the broader
dimension of the country’s survival in an interdependent
world was brought to bear on it. |
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