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Oil vs. democracy: India's strange bedfellows in energy quest

Siddhartha Kumar
From DPA/Antara News, Indonesia
June 14, 2006
link to this article.

As the global scramble for hydrocarbon reserves leaves fewer sources to tap, India is busy forging alliances with pariah states to fuel its booming economy.

Several of its new energy partners have track records of oppression, the stifling of basic freedoms, some even of genocide.

But India's appetite for oil has gotten the upper hand. Energy needs now determine India's foreign policy and have led the world's largest democracy to back repressive and undemocratic regimes through multibillion-dollar energy deals.

The most glaring example is right in the neighbourhood, in Myanmar (Burma). Gaining access to one of the largest energy projects in the region was a key reason for New Delhi to change tack from supporting the democracy movement there to courting an internationally condemned military junta.

India's state-run ONGC Videsh Ltd (OVL) and Gas Authority of India (GAIL) picked up stakes of 20 and 10 per cent, respectively, in the A-1 block of the Shwe gas field off the coast of Myanmar's western Arakan state - estimated to contain up to 102 billion cubic metres of gas.

India is also exploring for gas in another Myanmar block and doing groundwork on a 900-kilometre, 1-billion-dollar pipeline to transport gas from its neighbour, petroleum ministry officials said.

India's investments in Myanmar's energy sector will only enhance the Rangoon military's grip on power by contributing to its largest source of income - energy profits of up to 3.2 billion dollars annually.

New Delhi has ignored appeals by democracy activists and the indigenous Shwe Gas Movement to hold off on the projects. Critics charge that India will be legitimizing military rule, protecting the junta from Western sanctions and making democracy a distant dream for thousands fighting on its behalf in Myanmar.

"People inside the country are very much disappointed with the position the government has taken towards Burma, especially when they realize now that the Indian government is supporting the generals and thus has ignored the aspirations of the Burmese people," said Soe Myint, editor of the Mizzima news agency, which focuses on Myanmar.

Farther afield, Sudan, whose Arab-dominated government is accused of war crimes against the country's black population, has emerged as India's biggest energy partner, drawing investments of more than 2 billion dollars.

The Greater Nile Oil Project, in which OVL has a 25-per-cent stake at 669 million dollars, has been among the biggest overseas projects in terms of yield, officials said.

OVL has earmarked another 300 million dollars for two blocks in Sudan and is also in charge of a pipeline project there.

Energy analysts defended the moves, saying that India was not nearly as hypocritical about its political ideals as the world's oldest democracy, the United States, and was toeing the US line on energy issues in Central Asia, a region brimming with dictators and tyrants.

Washington, warming its ties to New Delhi with proposed support for nuclear power, is also keen to sponsor other energy deals to benefit India - such as a pipeline from Turkmenistan and an Asian power grid from Kazakhstan. The US would stand to benefit by thwarting a planned pipeline project from Iran.

"We have been trying to obtain stakes in Kazakhstan and Uzbekistan," a petroleum ministry official said, requesting anonymity. "The government is trying to facilitate a positive environment for Indian companies to pick up equity."

OVL and Kazakhstan's KazMunaiGaz are jointly to develop oil and gas properties in two blocks in the Caspian Sea region, news reports said.

During Indian Premier Manmohan Singh's recent visit to Uzbekistan, the two countries inked a pact to cooperate in gas and oil exploration and production. GAIL and Uzbekistan's Uzbekneftegaz are also to work together to build facilities in Uzbekistan to produce liquefied petroleum gas.

Energy experts want India to step up its energy diplomacy even further, saying the country is still not "as pragmatic" as other countries.

"A country which imports 73 per cent of its oil cannot look at the political character of governments," energy analyst Narendra Taneja said.

"Gas has no nationality. We need energy to sustain our economic growth, pull people above the poverty line, create jobs. India has no option but to aggressively pursue its energy diplomacy."

Political analysts disagree.

"India definitely should look at long-term solutions for energy needs," Myint said. "More importantly, it should not encourage the regimes or should not be a party in violating the rights of other peoples under the name of energy or development."

Asked recently about double standards on democracy, India's senior diplomat, Rajiv Sikri, made clear that India was not averse to striking deals with pariah states.

"I think we deal with the world as it is," he said. "We deal with many countries, including our neighbours, which may not be democracies. We try and develop mutually beneficial relationships with all countries."

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