The signing of the transit fee accord between Pakistan and Afghanistan in Washington on Saturday on the CASA-1000 project should come as an eye-opener for India’s foreign and security policy establishment — and for Prime Minister Narendra Modi, who is a votary of regional cooperation.

The CASA-1000 project envisages that Kyrgyzstan and Tajikistan, which have large hydroelectric power generation capacity, will supply Pakistan with 1000 MW electricity (roughly bridging 20 percent of Pakistan’s power deficit.) The USAID and World Bank are sponsoring the project.
The sticking point has been the transit fee issue, with President Hamid Karzai’s government adopting a tough stance demanding from Pakistan a transit fee of 2.5 cents per KW. The new government of President Ashraf Ghani has agreed to compromise at 1.25 cents. It’s a notable concession. The Afghan Finance Minister Dr. Omar Zakhilwal, who is a protege of Ghani, signed the agreement.
The US state department spokesperson aptly described the development as an “important step” in Pak-Afghan relations and highlighted that this signifies “one of the first foreign policy achievements of the new government of national unity led by President Ashraf Ghani and the Chief Executive Officer Abdullah Abdullah.”
The importance  that Washington attaches to the CASA-1000 and the unmistakeable import of yesterday’s development for the US’s regional strategies become clear from the fact that the signing ceremony was witnessed by World Bank President Jim Yong Kim and the US special representative for AfPak Dan Feldman.
The CASA-1000 project comes within the ambit of the so-called TUTAP concept developed by the Asian Development Bank with World Bank and promoted by the US. ‘TUTAP’ stands for Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan. The conceptualization is that the abundant energy resources of the Central Asian states — hydrocarbons, electricity and coal — could be tapped to meet the needs of the Afghan and Pakistani markets.
The ADB’s master plan aims at developing a CASAREM (Central Asia South Asia Regional Energy Market) where Pakistan is enabled to tap into Central Asia’s energy reserves through multiple distinct projects.
The US’s geo-strategy is hugely ambitious. At its core, it aims at making Pakistan and Afghanistan stakeholders in partnership, which of course contributes to regional security and stability. Second, Washington’s New Silk Road idea gains traction — connecting the Central Asian region with Pakistan — which makes inroads into Russia and China’s integration projects in Central Asia. (Read he speechby the US deputy secretary of state William Burns at the Asia Society last month.)
Third, the US influence in Central Asia, Afghanistan and Pakistan gets a long-term footing. Trade in electricity under CASA-1000 earns substantial revenue for the impoverished economies of Kyrgyzstan and Tajikistan. In strategic terms, the long-term US military presence in Afghanistan and the establishment of American military bases under the security pact signed in Kabul recently provide the underpinning for the strategy toward Central Asia.
Indeed, all this is unfolding against the backdrop of the assumption of office by a national unity government in Kabul. Clearly, Washington pitched hard for such a government under Ghani that also puts Abdullah as “co-pilot”.
Ghani has excellent equations with Pakistan but an Afghan consensus is necessary for promoting a settlement involving Pakistan and the Taliban. Washington expects Abdullah to give a big hand to Ghani to evolve such a consensus.
Delhi doesn’t seem to comprehend that there is no more any “great game” vis-a-vis Pakistan to be played in the Hindu Kush. The Americans have simply changed the rules of the game and the remaining choice for Delhi now would be to play the game in the Hindu Kush and the Central Asian steppes with Pakistan as team mate.
The American hope was that Delhi would intellectually grasp the seamless advantages in playing the new game and dovetail it with its much-touted ‘development agenda’ — normalization with Pakistan, access to Central Asia’s mineral resources and market and expanding India’s profile and influence as a regional power like China or Russia. But this hope has been dashed for the present.
Of course, Washington would sense that in the present climate of heightened India-Pakistan tensions, involving India in projects under CASAREM becomes a non-starter. On the other hand, the involvement of Pakistan is crucial for the success of any of the US’ New Silk Road projects.
On its part, Pakistan too will need a lot of cajoling and persuasion to agree to provide any form of access for India to the Central Asian region. The goodwill that Modi created by inviting his Pakistani counterpart Nawaz Sharif to his inaugural ceremony in Delhi in May has been completely dissipated; the two countries are getting mired in a “small war” on their border. Both functioning democracies have given a “free hand” to their respective militaries to fight this ’small war”, which doesn’t require formally declaring war.
Where is the missing link in India’s strategic calculus? Simply put, the imperative need for Delhi today is to figure out that the regional security scenario is changing dramatically and the old calculus has become dated.
Delhi needs to anticipate that Ghani is going to promote in the nearest future a reconciliation process with the Taliban and the transit fee accord is an important pre-requisite for it, being a rare CBM [confidence-building measure] with Islamabad.
The US game plan will be to accelerate the search for a settlement so that the American and NATO forces stationed in Afghanistan do not get caught up in the cross fires of “counter-insurgency” operations. For President Barack Obama it is highly critical that by the end of his presidency in 2016, he could claim “mission accomplished” in Afghanistan. A failure in Afghanistan dooms NATO’s future.
Therefore, the US is encouraging China to play a key role in Afghanistan’s stabilization and the forthcoming international conference hosted by Beijing later this month will underscore the magnitude and criticality of the US-China concord on this plane.
Ghani is attending the forthcoming investment conference in Beijing and has, significantly, chosen China for making his first official visit abroad as president. There is much expectation around Ghani’s meeting with Chinese President Xi Jinping in Beijing.
As Washington sees it, China is well placed to make big investments to kickstart the Afghan economy as well as to moderate Pakistani policies toward Afghanistan. To be sure, Beijing has huge stakes in Afghanistan’s stability and security, given the large-scale Chinese investments. Afghanistan’s mineral resources are estimated to be worth over a trillion dollars and for China’s economy these are covetable supplies and easily accessible.
I often wonder why India has lost the plot. My conclusion is that be it in a person’s life or in the life of a nation, daydreaming doesn’t take one very far. Life is mostly a difficult grind and the ground realities are what matter in the ultimate analysis.
We are locked in the daydream that we can punish Pakistan and bring that country to its knees and dictate our terms of settlement. Whereas, things have never been very different from what Zulfikar Ali Bhutto said — namely, Pakistan will eat grass if need be to retain its deterrent capacity.
Pakistan will never agree to a Kashmir settlement on India’s terms. Thus, there is no alternative to constructive engagement — not engagement for engagement’s sake.
Equally, with China, we are locked in a daydream of being engaged in “cooperation-cum-competition” without realizing the plain truth that we cannot compete with a country that has outstripped our country by almost half a century.
In both respects, Modi offered at the outset of his odyssey in Delhi a refreshing blueprint of new thinking. But as time passed and weeks rolled into months, it all begins to look like old wine in new bottles. The only residual hope is that the exigencies of our domestic politics — state assembly elections and the unfinished succession struggle within the ruling party — are preventing Modi from introducing his new thinking.
The accord in Washington yesterday on CASA-1000 should ring alarm bells in the PMO in South Block. If Pakistani leadership can balance so brilliantly the country’s beneficial relationship with both the US and China, what prevents Modi from doing so?
Don’t problems exist in US-Pakistan relations? Remember how Obama got bin Laden? Isn’t China increasingly frustrated that terrorists based in Pakistan attack Xinjiang with growing frequency and improved skill and expertise?
There is no hope on earth that Ghani will give recognition to the Durand Line and yet CASA-1000 is coming through — notwithstanding the bitter truth that Pakistan has a 2640-kilomtere long disputed border with Afghanistan. Should I say anything more? India needs to get the ‘big picture’ and understand that all our daydreams are mere delusions of grandeur.
Tacstrat
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