Neighbors

• India has asked the US and the European Union (EU) not to be hasty to take Iran to the UNSC. It said as a signatory of the Nuclear Non-Proliferation Treaty, Iran has rights to develop, use, and source technologies for civilian purposes. It therefore called for a more detailed IAEA study to determine the nature of its “research” at Nantz. At the same time, the Russian proposal of a joint venture to jointly enrich uranium in Russia is one way out especially since Iran also seems to be supportive of that idea. The EU had supported this idea also before Iran had unilaterally terminated conversation with the EU-3 (Britain, France, and Germany). Iran also unilaterally broke the IAEA seals at Nantz breaking the Paris Agreement, which prohibits Iran to restart operations before a consensus is reached. The US is also on record to support this plan but Iran’s chief negotiator, on return from China, said that this proposal may not be enough for their “energy needs.” China has close to USD 80 billion investments in Iran’s Yadaravan oil field and is signing up other deals. Iran is trying to hold India oil contracts to India’s decision on this vote. Iran’s National Iranian Gas Export Corporation (NIGEC) refused to honor an agreement signed by an earlier Government with Indian oil majors Indian Oil Corporation (IOC), Oil and Natural Gas Commission (ONGC), and Bharat Petroleum Corporation Limited (BPCL) saying that it needs a Government ratification of the MoU worth USD 20 billion. Iran also tried to equate itself to India and claim rights a la the Indo-US civilian nuclear deal. India has rejected this claim saying that India is not a signatory to the NPT or a Paris Agreement nor did it clandestinely acquire nuclear weapons technology as Iran did.

World

• The United States submitted an aide mémoire seeking India to reconsider its decision to invest in a Syrian oilfield.  The memo handed to the External Affairs Ministry by senior US diplomats accused Syria of not fully co-operating with United Nations investigations on its role in the assassination of former Lebanese Prime Minister Rafiq Hariri. It said that this was not the “right time to send mixed messages to the Syrian Arab Republic Government (SARG).” The US fears that the Syrian Government will “exploit” the proposed joint-venture investment with China of USD 573 million to mean that it is not “isolated and therefore not comply with” United Nations Security Council (UNSC) Resolution obligations. The UNSC had unanimously passed two resolutions “mandating complete cooperation by the Government of Syria with the UN’s investigations.” It is not known whether a similar a memo has been issued to China. Indian officials told the US officials that the Oil & Natural Gas Commission (ONGC) would proceed with the deal in co-operation with the China National Petroleum Corporation (CNPC) with the acquisition of 37% stake in the al-Furat oil and gas fields from Petro-Canada. This oil field with proven reserves of 300 million barrels of oil is partly owned by Shell. India considers this investment strategic both from the perspective of quantifiable assets but also as means to further its incipient oil partnership with China. This memo comes on the heels of another controversy of the US Ambassador’s comments that the Indo-US civilian nuclear deal may be in jeopardy if India does not vote with the US and Europe against Iran at the International Atomic Energy Agency (IAEA) this week. There is increased fear in India that the US is leveraging the Indo-US nuclear deal for civilian use to curb Indian decision-making to meet its own ends.

• With a large majority in the recently concluded polls in Palestine territory, Hamas is set to form a Government that will surely not be recognized by many countries and likely seriously affect the peace process. Israel rejected Hamas saying that it was “not a partner” in the peace process and that the Government will be reduced to irrelevance. International aid for Palestine may also be affected, as most donor countries are unlikely to support the Government especially if they do not disarm. A major sticking point is the Hamas call for the destruction of Israel. Congratulating the Palestinian people, the United States, Russian, United Nations Secretary General, and European Union have asked Hamas to recognize Israel’s right to exist, give up its arms, and follow the peace roadmap authored by this quartet. Exiled Hamas leader Mashaal said that in Arabic the correct translation is “End to Israeli occupation” and said that his group does not “want to eliminate them, only to obtain our rights.” He said, therefore, this clause would remain as part of their charter. He also said that his group would “certainly not” disarm as long as the Israeli occupation continued. He maintained, “Only force has produced results.” He also rejected the “one-sided” roadmap to peace as “unacceptable.” Arab League Society General Amr Moussa said that Hamas must accept the Beirut initiative that called for Arab recognition of Israel. An opinion poll in Israel shows that the population is equally divided on talking or boycotting the Hamas.

• The US Secretary of State Condoleezza Rice said that India has some “difficult choices” to make before the Indo-US civilian nuclear deal could move forward. Refusing to elaborate on what those choices were, she said both sides are making progress. There are fundamentally three issues that are stopping the forward movement. Firstly, the US wants India to place its fast breeder reactor (FBR) program under International Atomic Energy Agency supervision citing Japan as a country that has already included its technology under IAEA. India says that this is not an apt comparison because Japan is not a nuclear weapons state as India is and Japan is also a Nuclear Non-Proliferation Treaty (NPT) signatory that India is not. Besides, since FBR is non-military in nature, why should this be an issue? Secondly, the US wants India to vote against Iran at the IAEA so the issue can be refer the case to the United Nations Security Council (UNSC) for punitive economic sanctions for clandestine procurement, proliferation, and unilateral abrogation of international treaties. The US also wants India to terminate Liquefied Natural Gas (LNG) and oil deals with Iran. India says that it is against Iran’s nuclear weapons but also wants a formula that does not push Iran into a point of no-return. India, as an energy deficit country, desperately needs gas and oil and will go forward on all deals that will secure its energy. Thirdly, the US wants India to terminate a contract with Syria because that country is not cooperating fully as required by the UNSC in the assassination of a former Lebanese Prime Minister. India says that the US is using its civilian nuclear deal as a leverage to control what it does to further its national interests. India fears that the control will not be limited to Iran and Syria but extend to potential deals Sudan, Venezuela, Chile, or Bolivia. With the US raising these conditions at the last minute, it is highly unlikely that the civilian nuclear deal will be completed by the time the US President George Bush visits India in March.

• The Saudi Arabian King Abdullah bin Abdul-Aziz al Saud completed his four-day state visit to India. Abdullah officiated as the Chief Guest at the Republic Day parade. India and Saudi Arabia have signed accords to cooperate bilaterally, regionally, and internationally to combat terrorism; Abdullah had called for a war on terrorism “irrespective of religion” and for “as long as it takes.” The Delhi Declaration also says that Saudi Arabia endorses the ongoing peace process between India and Pakistan. On the economic side, the two sides agreed on an energy partnership with complementary and interdependence of the two countries. The partnership also envisages long-term contractual agreements that will guarantee continued, increased, and stable supply of oil, refinery, and technology to India and joint ventures globally. Apart from oil, the two countries agreed to cooperate on communication, agriculture, biotechnology, and non-conventional energy technologies. Further, India would offer post-graduate and doctoral education to Saudi students. Saudi Arabia is the largest producer of and has the largest known reserves of crude oil in the world. India is Saudi Arabia’s fourth largest trading partner. A large number of Indian expatriates live in and Haj pilgrims visit Saudi Arabia. Indian major conglomerate Reliance Industries announced plans to set up a USD 8 billion oil refinery project in Saudi Arabia.