TRADE, ENERGY, AND SECURITY – POTENTIAL VENUES FOR PAK-IRAN COOPERATION

Abstract

Iran and Pakistan share deep rooted ties of cultural and religious fraternity. Both have maintained close ties and mutual convergence of interests, albeit not to its full potential. Iran and Pakistan were close allies of the US during most of the Cold War. Yet the dynamics altered slightly after 1979 as Iran emerged as an American rival. This at times put the two neighbors at odds especially on the issues of Afghanistan, cross border militancy, and smuggling. Notwithstanding this, the overall posture between the two neighbors has been characterized with that of increasing cooperation in trade and energy. However, the research on on-ground realities of Pak-Iran trade is limited. This study explores the extents of Pak-Iran trade potential and cooperation in the energy sector. The study’s findings are based on qualitative analysis of interviews and secondary data. The analysis reveals that the informal trade volume exceeds $5 bn which can be extended if legal channels are established. Second, there is a need for infrastructural development throughout the trade corridor in Pakistan to facilitate timely, efficient trade. Third, border markets have great potential for enhancing trade efficiency which show promise for expansion. The paper suggests a way forward for the Iran-Pakistan gas pipeline. In its conclusion the paper analyzes the bilateral security dynamics and provides a way forward for strengthening military ties especially with regards to militancy and terrorism.