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Michael Cotter: "Turkmen Gas Delivery to South Asia Is Quite Realistic"
12 September 2002

Ex-US envoy asks India and Pakistan to resolve differences
From Tariq Saeedi

Ashgabat: Michael Cotter was US envoy in Turkmenistan from 1995 to 1998, the years when Trans-Afghan Pipeline took birth on the drawing tables of Bridas and Unocal. It was also the time when the Taliban came into power and the whole region felt tremors of an unstable Afghanistan.

Ambassador Cotter is not only a witness to history in the making but for three years he helped shape the course of history in Central Asia. His insight carries great significance in today's scenario. Analysts consider him an authority on Central Asia, especially Turkmenistan. Besides English language that is his mother tongue, Cotter speaks Spanish, French and Turkish.

I contacted Ambassador Cotter recently at his residence in Pittsboro, North Carolina and asked him a few questions about the prospects of Trans-Afghan Pipeline (TAP) and related matters.

He sees excellent chances of success for TAP but links it with improvement of relations between India and Pakistan.

Here is complete text of Michael Cotter's interview:

About chances of success of Trans-Afghan Pipeline project: In the long run I think they are excellent. I believe the natural market for Central Asian oil and gas is the sub-continent, where there is a deficit of those commodities and large economies that need energy resources.

Snags in the way of TAP: The snags I see are simple: an unsettled geo-political situation in the sub-continent will scare away potential investors. Another issue is the size of the market and willingness to pay what it will require to make the project feasible. For instance, I understood way back in 1997 that projections of Pakistan's economic growth and ability to pay for gas were insufficient to justify the project without additional markets.

Why US energy films have not shown any interest in the revived TAP: US firms will be interested when market projections justify the project and the geo-political situation is stable. The US government will not pressure US firms to enter against their better judgment. There may also be an issue of lingering lawsuits from Bridas, although I don't know whether they are still a problem.

Will India eventually buy from TAP: Will India agree to buy? In principle yes, but again it depends largely on a solution to other outstanding issues between Pakistan and India. I find it hard to believe India will agree to import gas and/or oil through Pakistan as long as the two countries are on a war footing.

Effect of ground realities in Afghanistan on TAP: These pale by comparison with ground realities in the sub-continent. Obviously, as long as the central government in Afghanistan remains weak, and warlords like Ismael Khan control the areas through which any pipeline will go, the prospects are limited. I think those problems can be resolved. Even in 1997 the problem was not who in Afghanistan controlled the route, because UNOCAL could have worked out terms to make sure all Afghan players were winners. The real problem then was unwillingness of the World Bank to finance the project with the Taliban in power.

Any other comments: The foregoing makes clear that both Pakistan and India need to re-evaluate their relationships in light of the potential benefits available to both in Central Asia. As time passes, Central Asian energy will find other outlets and at some point not be available easily to South Asia.

With a new world order in Central Asia, Pakistan and India need to find a way to put old disagreements behind them and look to the future.

Allowing Kashmir to drain treasuries and prevent other economic developments, including accessing Central Asian resources, is the height of folly by both countries.

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