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Why Iraq is again key to India’s energy needs
With all the brouhaha over the escalation of tension on the Line of Control between India and Pakistan, the visit of Iraqi Prime Minister Nouri al-Maliki received far less attention than it deserved. It was the first state visit by an Iraqi Prime Minister in a decade since the US-led invasion of 2003 and the overthrow of Saddam Hussein. Since then Iraq has struggled to find its feet and al-Maliki, who became Prime Minister in 2006, has had to continuously put down sectarian violence even as he worked to restore its shattered economy. Iraq is important to India because it is among the top five oil producers in the world with proven reserves of 143 billion barrels that could last for a 100 years. With India importing most of its petroleum requirement, Iraq is once again becoming a key player in our energy sector. Especially after the US clamped down on countries, including India, that were importing oil from Iran. Ever since Iraq repaired its devastated oil wells and restarted production, India has steadily upped imports of crude from Baghdad. Today, Iraq is the second largest crude oil supplier to India, next only to Saudi Arabia, and has even overtaken Iran. Last year, India imported crude from Iraq worth US $15 billion, totalling 12 per cent of its imports. With the Shia majority taking over power after 2003, India has signalled that it is putting behind the era of Saddam Hussein and his minority Sunni-led Ba’ath regime. India had supported Saddam over the years, both prior and during the two Gulf wars. In 2003, the NDA government even passed a resolution in Parliament condemning the US-led invasion. It is another matter that post-war assessments indicated that the US and much of the West had committed the “mother of all misjudgements” by toppling Hussein under the guise of dismantling Iraq’s nuclear weapons and his purported links with Al-Qaeda. In the years after, the Coalition Forces came up with no evidence of weapons of mass destruction that Iraq had allegedly possessed. Barack Obama, then a US senator, described it as a “dumb war” and when he took over as President pulled out American troops as fast as he could. It wasn’t as if Saddam Hussein had done much for his country despite the vast resources at his command and so much oil money. In his initial years after he seized power in 1979, Saddam built impressive super highways that connected much of Iraq, with Baghdad turned into a showpiece capital. Electricity in abundance, industry flourished and Saddam was hailed as a visionary. Intoxicated with power, however, he soon exhibited megalomaniac tendencies and the Regime’s last years were oppressive and corrupt. Iraq had become a republic of fear with Hussein tolerating no dissent and mowing down his rivals. Nepotism became rampant and horror stories of his sons’ debauchery and cruelty were in abundance. During the Second Gulf War, I went in a convoy organised by the British Royal Marines from Kuwait to Umm Kasr, Iraq’s second largest port, which had fallen relatively quickly to coalition forces. Fierce fighting was still on for Basra, Iraq’s largest port. We drove to the burning oilfields of Ramallah where a majority of its wells had been set on fire by Saddam’s retreating forces. Though we stood at a distance of a kilometre, the heat from the oilfields was like in a sauna. As we went around nearby villages, we were surprised to see people that were as poor as in Bihar in India. They welcomed the invading Coalition Forces for liberating them from Saddam’s tyrannical regime. Today Ramallah oilfields are back to normal, contributing an estimated 40 per cent of Iraq’s crude oil production with possibly some of India’s oil imports coming from its wells. For India, Iraq is important not just for its potential to meet a substantial portion of our energy needs for decades but also for our food security. India has proposed joint ventures in fertiliser plants which could result in Iraq supplying phosphate and urea at competitive prices for our burgeoning agricultural needs. Indian companies are also participating in Iraq’s reconstruction effort and increasingly exporting a range of goods, including agrochemicals, rubber, paints, machines tools, pharmaceuticals and tea. Iraq also remains an important player in the Middle-East cauldron and its pluralistic and secular traditions act as a major balancing force that has proved useful to India in the past and will do so in future. There was great deal of warmth between Prime Minister Manmohan Singh and al-Maliki during the bilateral discussions and the dinner which he hosted for the visiting dignitary. It heralded a new chapter in India-Iraq relations that deserved to be toasted. raj@tribunemail.com
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