Over the last three years, the Central Asian Republics (CARs) have witnessed significant geopolitical shifts in the region - the resurgence of Russia, China's increasing influence, a colour revolution in Kyrgyzstan, unrest and shift in Uzbekistan's foreign policy, and the growing prominence of the Shanghai Cooperation Organisation (SCO). Since 2004, the SCO's influence and role has been growing in the Central Asian region and the last two summits of the SCO are significant in terms of making the international community take notice of this regional grouping. The Astana summit in 2005 was important for its declaration asking the United States to provide a time frame for the withdrawal of its military forces from SCO territories. The Summit in Shanghai on June 15, 2006, took place against the backdrop of the crisis over Iran's nuclear programme and Iran and Pakistan both seeking full membership in the organisation. The next meeting under the Kyrgyz presidency will be held in Bishkek in 2007.

During the summit, ten documents were signed on a broad range of issues. Important among these are - declaration on the SCO's fifth anniversary, a joint communiqué on closer SCO cooperation, a statement on international information security, a resolution on fighting terrorism, separatism and extremism from 2007 to 2009, an agreement on joint anti-terrorism actions among member countries, an agreement on cutting off infiltration channels of terrorism, separatists and extremists, a resolution of the SCO Business Council, and an action plan of the SCO Interbank Association on supporting regional cooperation. An important aspect of this summit was the Russian proposal for creating an energy club within the SCO. On the sidelines of this summit, business contracts and loan agreements worth some US$ 2 billion were inked. These deals involve a highway project connecting Tajikistan and Uzbekistan, two high-voltage electricity lines in Tajikistan, a cement plant in Kyrgyzstan, and a hydropower station in Kazakhstan.

The other important issue was of full membership for Iran and Pakistan. While Iran was keen to get full membership, President Pervez Musharraf lobbied hard for Islamabad's membership. But China and Russia withheld support for Iran's full membership and the CAR's, in particular Kazakhstan and Kyrgyzstan, were also opposed to it. Pakistan's relationship with the Taliban was seen as a major obstacle in granting it permanent membership.

Iran's participation at the summit was seen by the West as creating a security grouping to oppose the collective forces of the US and NATO. Iranian President Ahmadinejad said that the SCO could "ward off the threats of domineering powers to use their force against and interfere in the affairs of other states." The SCO declaration clearly stated that "diversity of civilization and model of development must be respected and upheld. Differences in culture traditions, political and social systems, values and model of development formed in the course of history should not be taken as pretexts to interfere in other countries' internal affairs. Model of social development should not be 'exported'…" These signals have caused trepidation in Washington.

However, it would be difficult, given the nature of the complexities in Central Asia, for the SCO to become an "OPEC with nukes" or "Asian Warsaw Pact". China and its official media have denied any possibility of the SCO becoming a rival to the US and NATO. At the same time it is unlikely that China and Russia would allow the US to intervene and interfere in their backyard. The relevance and viability of the SCO as a multilateral body would depend on how it evolves in the next ten years.

So far the results for the SCO have been somewhat mixed. The very fact that the SCO has been able to sustain and survive is in itself an achievement. It has managed to settle the border issues among the member states. Though, most delicate issues were resolved bilaterally rather than multilaterally. Central Asian states have been expecting more productive participation by the SCO in providing solutions.

One can enumerate various reasons for the lack of conclusive results. The major shortcomings for the SCO have been mainly the absence of political will and confidence; difference in economic status of member states; competition with other organisations, lack of resources for development, cultural differences and domestic challenges of CAR's. In addition, opposition from the countries that are left out has been a major source of weakness. Finally, lack of clear direction for cooperative endeavours has prevented it from moving forward. However, it can be argued that it is too early to expect conclusive results from the SCO as it would need a time frame to mature and is still in the process of defining its political characteristics and functions.

For China, the SCO provides a perfect political and economic mechanism to contain the Uighur separatist movement, access to Central Asian energy resources and economic benefits. The SCO provides China an opportunity to regain its strategic space which had started waning post 9/11 with increasing US influence. For Russia, the SCO provides an opportunity for strengthening its political, military and economic ties with CARs and for engaging China economically while at the same time balancing US influence. Recent developments indicate that for the time being cooperation between Moscow and Beijing within the SCO and further improvement in their ties may serve as a counterbalance to Washington's Central Asia policy.

For Central Asians, the SCO provides greater manoeuvring capacity to balance the major powers and gain economic and military aid. CAR's are looking to reduce their vulnerability to external powers. Their responses to this new unfolding situation is driven more by their need for economic support and investments in various sectors, and fear of increasing political opposition, than by the fear of great power rivalry and hegemony. Central Asia's desire to cooperate with the SCO is driven not only because the current regimes wish to stay in power but also by the fact and realization on their part of the rise of China. Therefore, the SCO essentially provides a delicate equilibrium among the members in the post-cold war geopolitical paradigm.

India has never featured in this equilibrium, even though Central Asians have always perceived India's potential to be a countervailing factor in this region. For India, containing the unstable situation in and around Afghanistan-Pakistan, ensuring its energy security and stability in CARs, all remain critical and paramount components of its policy towards Central Asia.

India joined the SCO as an observer at the Astana summit. Given its past links with this region, its secular framework, growing economy and strong IT sector, India has much to contribute to the economic development of the CAR's. Though observer status cannot be seen as a step towards full membership, it provides India an opportunity to watch the developments within the SCO. The SCO can provide India a framework wherein it can engage China and Pakistan to improve its connectivity with CARs, address the problem of terrorism, enhance its trade with CAR's and tap its vast energy resources. It would not be in India's interest to be part of the organization if the SCO turns into some kind of military alliance.

India sees no confrontation with China and looks for further cooperation with that country. The future strategic configuration of Central Asia will depend on how regional powers address the challenges and opportunities for cooperation arising from within Central Asia. But the Chinese, Russian and American national interests in Central Asia and Afghanistan will continue to determine the future course of security and stability in the region. India is an important, but not a key, player in Central Asia. Therefore India's primary focus in Central Asia should be damage control; preventing existing problems from escalating into crises to the scale of Afghanistan and working towards economic diplomacy. In this new security paradigm, India's interests require a cooperative relationship with SCO member states.

The future of SCO would depend firstly on how it addresses the conflicting interests of member states and other regional and extra regional players in the region. Secondly, how cooperation and mutually advantageous equality would serve as the basis of the relations among member states and states with observer status. Thirdly, the question of expanding the organization would determine the scope and role of the SCO. Fourthly, the SCO's success in economic co-operation would be conditioned by the fear of smaller SCO members, in that smaller states might fear that their resources would become vulnerable to exploitation by larger members. The geographical configuration and political composition of the SCO reveal the asymmetry among member states. It consists of two major powers and four small states of Central Asia. If the SCO has to emerge as a successful regional organisation, it should develop into an effective multilateral organisation to address security and economic challenges in the region on the basis of mutually beneficial terms among its members.

The Board of Governors of IAEA is scheduled to meet on March 6, 2006 to decide the next step after the passage of the February 2006 resolution against Iran. The crisis is deepening fast. The controversies related to Iran's past procurements and associated deeds seem to be far from coming to a close soon.

The IAEA Board in its February 4, 2006 resolution called on Iran to: re-establish full and sustained suspension of all enrichment related and reprocessing activities, including research and development; reconsider the construction of a research reactor moderated by heavy-water; ratify promptly and implement in full the Additional Protocol and implement transparency measures as required by the IAEA in its earlier reports on the implementation of Safeguards in Iran.

The resolution not only requested the Director General to report to the Board in its March meeting about the progress in Safeguard inspections with reference to earlier assessments, but also "immediately thereafter to convey, together with any resolution from the March Board, that report to the Security Council."

What has been the level of confidence between the IAEA and Iran, before the P-5 decided to favour the February resolution?

The Deputy Director General (DDG) of Safeguards in its brief report of January 31, 2006 provided factual information for further examination into Iran's nuclear programme. The report included the IAEA's demand for clarifications on issues such as procurements and activities related to P-1 and P-2 centrifuges; sources of contamination found in the samples collected from Iran's enrichment related facilities; activities at Lavizan-Shian Physics Research Centre; 'Green Salt Project' concerning the conversion of uranium dioxide into UF4 as well as tests related to high explosives and the design of a missile re-entry vehicle; and a few other technical activities related to other aspects of the fuel cycle. Talking about the activities related to the Green Salt Project, the DDG stated that these "could have a military nuclear dimension" and that they also "appear to have administrative interconnection."

Such remarks tend to question the validity of Iran's claims that its nuclear programme is purely for peaceful purposes and that these are under the authority of the Atomic Energy Agency of Iran and thus separate from any connection with the military establishment.

Meanwhile, Western media extensively reported about intelligence inputs on Iran's efforts regarding modifications in missile systems to enable nuclear payloads, something that Colin Powell had hinted almost two years ago. For now, neither does Iran admit, nor is the IAEA in a position to establish, any military link with the ongoing nuclear programme of the country. There is therefore a felt need to examine the veracity of Iran's declarations that it is adhering to its NPT obligations.

Has Iran maintained appropriate transparency with the IAEA?

Even after three years of extensive inspections, the IAEA still requires additional information to rule out inter-administrative linkages within Iran and its outside support agencies through the Pakistan based A Q Khan network.

The IAEA finds that Iran's declarations on past procurements and interaction of Iranian officials with the Khan network are still not coherent. Iran admitted to have acquired the P-1 design with samples of centrifuge components in 1987; and between 1994 and 1995 it procured a duplicate set of P-1 drawings along with components for 500 centrifuges. The IAEA in its September 2, 2005 report raised the question as to why the P-1 design similar to those that had been provided in 1987 were delivered again with the offer made in 1994. Till date, Iran has shown inability to produce documents or other information about the meetings that led to the procurement of 500 sets of P-1 centrifuge components in the mid-1990s.

Despite the fact that Iran acknowledges that it received the P-2 design in 1995 and that around 13 meetings took place between Iranian representatives and the Khan network intermediaries, Tehran denies that any delivery related to centrifuges took place after 1995. The international inspection agency is still awaiting clarifications concerning the delivery of large quantities of magnets (900 pieces for P-2 centrifuges) from a foreign entity in mid-2003.

Iran also admits that a private contractor manufactured seven rotors for P-2 and had performed mechanical tests between early 2002 and June 2003 without using nuclear material (GOV/2004/83). However, the IAEA is still to verify the progress since then and come to a final conclusion on Iran's statement that it did not pursue any work on the P-2 design between 1995 and 2002 or after 2003.

In addition, the IAEA is yet to complete the assessment of the 15-page document describing the procedures for the reduction of UF6 to uranium metal in small quantities, and for casting of enriched and depleted uranium metal into hemispheres, all of which is related to the fabrication of nuclear weapon components. This document was first made available to the IAEA by the Iranians during the October-November 2005 meetings. Till date, it is not clear as to when and why Iran received this document from the network. In its latest report, the Director General of the IAEA mentions that "Although there is no indication about the actual use of the document, its existence in Iran is a matter of concern."

What is the IAEA's overall assessment of the situation?

Iran is fast losing patience in its efforts to get a clean chit from the IAEA. But the international inspection agency is not in a position to "conclude that there are no undeclared nuclear materials or activities in Iran." According to the latest report which is under review by the Board Members for the March 6 meeting, the Director General's assessment is that "It is regrettable, and a matter of concern, that the above uncertainties related to the scope and nature of Iran's nuclear programme have not been clarified after three years of intensive Agency verification. In order to clarify these uncertainties, Iran's full transparency is still essential." Implicit in this statement is the view that Iran has not provided satisfactory clarification to the IAEA on many outstanding issues.

Another issue is of inadequate transparency. The Director General mentions: "Such transparency should primarily include access to, and cooperation by, relevant individuals; access to documentation related to procurement and dual use equipment; and access to certain military owned workshops and R&D locations that the Agency may need to visit in the future as part of its investigation."

What is the status of implementation of Safeguards in Iran now?

Confidence building has been the most significant aspect of Iran's cooperation with the IAEA. The measure of voluntary suspension of enrichment-related and reprocessing activities by Iran served as an effective tool to minimize the degree of mistrust among the views of US, Britain, Germany and France vis-à-vis Iran.

However, over the last six months, Iran has been fast shifting gears to test the patience of the IAEA. Iran broke the voluntary suspension on enrichment related activities in August 2005 and started the conversion process line at Esafahan. It has produced approximately 85 metric tons of uranium hexafluoride gas (the feed material of enrichment) since September 2005. Subsequently, it removed the Agency seals on January 10, 2006 from the facilities at Natanz, Pars Trash and Farayand Technique and started 'small scale R&D' at the Pilot Fuel Enrichment Plant (PFEP) in Natanz. It resumed enrichment tests on February 11, 2006 by feeding a single P-1 machine with UF6. On February 15, 2006, it started feeding a 10-machine cascade and, according to the latest IAEA report, a 20-machine cascade was subjected to vacuum testing on February 22, 2006. Despite the resumption of manufacturing of components, conversions and feeding of UF 6 into centrifuges, the level of success is not clearly known as yet.

Another significant aspect of Iran's nuclear programme that has remained contested is its insistence on the construction of a heavy-water moderated reactor. Iran decided in the mid-1980s to replace the Tehran Research Reactor, since according to Iran it has been reaching the safety limits of operation. This new reactor, according to Iran, is being planned for medical, industrial isotope production and R&D purposes. Though the engineering construction of the plant is ongoing, its commissioning date of 2007 is likely to be postponed till 2011.

In the given background of Iran's nuclear programme involving complex technical processes and gaps in information available to the IAEA, a definitive assessment of implementation of Safeguards in Iran remains difficult. However, previous IAEA assessments clearly indicate that Iran has failed in a number of instances over a long period of time to fulfil its Safeguards obligations.

Based on the IAEA's reports, US, Britain, France, Russia and China (P-5 of UN Security Council) voted in favour of the February 2006 resolution requesting the Director General of the IAEA to report the developments on the implementation of inspections in Iran to the UN Security Council. Instead of attempting to improve the level of confidence and credibility with the IAEA, Tehran chose not to relent on the demands of the February resolution to restore voluntary suspension. Though the situation has still not reached the stage of posing an imminent threat to international peace and security, the loose ends of Iran's commitment to international agreements remain a cause of concern for the international community.

In the third round of talks held in New Delhi on June 22 with the 11-member People's Consultative Group (PCG), the Centre gave an assurance that it would engage with the United Liberation Front of Asom (ULFA) directly within a fixed time frame. Union Home Minister, Shivraj Patil, who represented the Centre, also told the PCG that their demand to release ULFA Vice Chairman Pradip Gogoi, Cultural Secretary Pranati Deka, Publicity Secretary Mithinga Daimary, Executive Committee Member Ramu Mech and Ideologue Bhimakanta Buragohain would be considered in consultation with the Assam Government. The Home Minister also urged the PCG to impress upon the ULFA to sincerely work towards the establishment of a peaceful environment to facilitate direct talks at the earliest. At the end of the three-hour long engagement, the two sides issued a joint statement expressing the hope that they would base their future action on restraint. The PCG expressed satisfaction at the Home Minister's vision for a negotiated settlement with Assam's largest separatist group, and promised that it would appeal to the ULFA to adopt peaceful methods and in the process create a secure and stable environment in Assam conducive for direct peace negotiations.

But the positive effect that the third round of talks was meant to reflect and the pathway paved for direct negotiations were negated to a large extent by the spate of bombings in Assam that preceded the talks. Explosions occurred in Haibargaon, Golakganj, Dhubri and Mangaldoi on June 8 injuring 28 people. A wave of bomb blasts was triggered off in Guwahati and Naharkatiya on June 9 and 10. A grenade was thrown in a politician's house in Naharkatia and oil and gas pipelines were also blown up. Significantly, the ULFA owned up only to the attack on oil installations. The Guwahati bomb blasts in the crowded wholesale vegetable market of Machkhowa killed six people and injured at least 20. On June 11, suspected ULFA militants blew up railway tracks with a remote controlled bomb between Borhat and Sapekhati in Sivasagar district and attacked a police party at Makum in Tinsukia district injuring two policemen and a civilian. On June 12, a bomb blast in the oil town of Digboi killed one person and injured 12 others.

Reacting to the violence, Home Secretary V K Duggal said, "ULFA is adopting tactics to pressure the Centre. These are tactics we understand and we can reply to them…these are not good tactics." The ULFA was quick to deny any hand in or knowledge of the attacks and its chief Paresh Barua stated, "those who want peace dialogue in Assam scuttled are using mercenaries to stage such attacks so that we can be blamed." In contrast, the Assam Police (AP) asserted that the scheme and tactics involved in the bombings clearly indicated the hand of the ULFA. The pattern of the attacks had a strong resemblance to earlier such attacks by the group. Inspector General of Police (Special Branch) Khagen Sharma insisted on June 9 that "though there is no evidence yet that the ULFA was involved, the needle of suspicion points to them." He went on to state in a press conference on June 14 in Guwahati that similar bomb attacks have been on the rise since 2004, when a 16-member team trained in using explosives and bombs in Batrossi Hills of Mansera district in Pakistan clandestinely crossed the border into Assam with the help of Pakistan's Inter Service Intelligence. But the ULFA, in an email put out by Paresh Barua, blamed the AP of engineering the latest attacks in order to stall the June 22 peace talks with the Centre. But this, by any account, seemed like a fictitious claim dished out by the ULFA leaders to steer the spotlight away from the outfit in the immediate aftermath of the bombings.

A cursory glance at the ULFA's spate of violence in recent years indicates that it has been involved in the killing of innocent civilians - a principal reason for its loss of support among the Assamese people. On July 1, 1991, it was involved in the kidnapping of a Russian mining engineer and 14 Indian nationals; the Russian and several of the Indians were later killed in captivity. The group was indicted in the kidnapping and murder of social activist Sanjay Ghosh in 1997, which provoked international condemnation. But the most dastardly attack carried out by the ULFA was the Dhemaji bombings of August 15, 2004 in which several school children were killed. In a subsequent email statement, ULFA's chairman, Arabinda Rajkhowa, claimed that though unfortunate the school children had been used as a shield by the Indian occupation forces to defy the outfit's boycott call of Independence Day celebrations. This was the first public acceptance of "terror bombing" tactics by the ULFA.

The ULFA's latest bombings raises the question of the outfit's commitment to peace. Its terror tactics could be viewed as an attempt to demonstrate its ability to strike and kill in the wake of reports in the Assamese press about its waning influence in the state. ULFA chief Paresh Barua, in a statement on June 10, had threatened four journalists including the editor of The Sentinel D N Bezboruah for exposing the outfit's eroding support base. Given this, the Centre should have postponed the June 22 talks with the PCG. Moreover, the Centre's willingness to hold direct talks with the ULFA, despite its suspected hand in the recent bomb blasts, could set a dangerous precedent. Similar violent acts could be engineered by other militant groups in the Northeast, primarily aimed at increasing stakes in the political gamble of power sharing.

Interestingly, the ULFA was distinctively silent during the Assam elections earlier this year. The Assamese perceive the ULFA as an aging force, whose earlier euphoric declaration of a Swadin Asom or Independent Assam lost much of its shine after its linkages with the illegal Bangladeshi migrant community came to light. The outfit is also suspected of maintaining bases in Bangladesh. The people of Assam have come to look upon the ULFA as interest-driven, wanting to capitalize on its earlier "sanctified" image of fighting for Assam's liberation for its own economic and political ends. It no longer captures the imagination of the masses. But it is important to engage the group and extract a commitment of cease-fire from it. Willy-nilly, given its loss of popular support, it has no other option but to resort to peace initiatives with the Centre.

The peace process, which was kick started in October 2005, is a step in the right direction. An outfit, towards the fag end of its existence, could "up the ante" with violent demonstrations to project power. More importantly, the recent violence is also indicative of the outfit's inability to control its cadres. That is reason enough for the Centre and the ULFA to work out the modalities of a ceasefire. But the Centre must be wary of not succumbing to pressure tactics by the group. The road to peace in the state has taken its first tentative steps and is a welcome development.

After his landmark speech on energy independence on the eve of India's 59th Independence Day, President Abdul Kalam emphasised upon the importance of alternative fuel development to surmount the growing challenges to energy security in his opening address at the Bio-Diesel Conference on June 9, 2006. His emphasis on energy independence places immense importance on India's energy security, as the country is increasingly dependent on imported fuels. Kalam's speech focused on the importance of biofuel development in India as a means to address the challenges to liquid fuel demand against the backdrop of resource degradation of, and supply challenges to, traditional fuels. Today, India's energy mix is dominated by coal, followed by oil and natural gas. As petroleum sources increasingly become dearer and the usage of other traditional sources such as coal and biomass burdens the environment and human health, transition to renewable and alternative sources evince greater prospects in the search for energy independence. Energy transition does not mean a complete shift to non-traditional sources and ignoring the present pattern of fuel dependency, but is largely meant to address the growing demand for generation of heat energy, electricity and liquid fuel.

Despite many technological and economic limitations, experimental and small-scale commercial production of non-traditional sources in India has seen remarkable achievements over the past few years. While renewable energy is expected to contribute a 10 per cent share to total electricity production by 2012, biofuels have already made a promising start by replacing petroleum fuels in many of the experimental transportation operations and in some commercial usages. In this context the President emphasised that since the country has 30 million hectares of usable wasteland out of the total 60 million, our aim should be to produce a minimum of 2 tonnes of bio-diesel per year per hectare, which will result in the production of 60 million tons (mt) per year in full capacity in an optimistic environment.

While traditional approaches seek to define energy security as the supply security of imported petroleum fuels, in a realistic approach, it by and large indicates the supply security of various fuel types at an affordable price in order to run the economic engine of a country. According to the President, our target is to achieve energy security by 2020, leading to energy independence by 2030 and beyond. In other words, energy security will be achieved by a combination of various supply sources and subsequently external supply of fuels can be substantially reduced or replaced by domestic production. But, with a production of 60 mt biodiesel a year by 2030, the plan to achieve energy independence appears unachievable given that demand for liquid fuel is expected to increase from 119 mt in 2004 to above 271 mt in 2030.

Since India's available oil reserves are expected to last only for 18.5 years at the current rate of crude oil production, energy independence cannot be achieved unless the country finds some major new oil reserve or increases the expected production of biodiesel to meet the demand. Moreover, in India, import dependency on oil amounts to above 70 per cent of the total consumption, which would make it difficult to manage without external supply of liquid fuels. If this trend continues, by 2030 India would end up importing almost 100 per cent of liquid fuel demand. Given the above-mentioned challenges, complete energy independence appears to be an ambitious plan for the country, though self-sufficiency in supplying a certain percentage of energy requirements, i.e. the annual growth in demand, can still be considered a possible option.

Be that as it may, according to the British Petroleum Company Limited, India's oil consumption in the year 2005 witnessed a 3.5 per cent fall compared to the consumption in 2004. This decrease is due to growing energy prices worldwide. But in the long term, we cannot expect this trend to continue due to the possible increase in demand from various sectors. Hence, it appears to be the ripe time for development of biofuels in order to supplement demand growth with a certain percentage of supply.

While biofuels might not play an exclusive role in achieving energy independence, transition from traditional sources to a mix of renewable, biodiesel, ethanol, liquefaction of coal, coal bed methane and gas hydrates together would have a strategic role in this regard. According to the Directorate General of Hydrocarbons (DGH), India has enormous potential in coal bed methane and gas hydrates reserves. The total prognosticated gas available from the gas hydrate deposits is placed at 1894 trillion cubic meters, while the current estimated gas reserves in India amount to only 1.10 trillion cubic meters (38.9 trillion cubic feet). Though gas hydrate exploration is at present limited to experimental levels, even a small percentage of commercial extraction could possibly minimise India's concerns about fuel supplies for the transportation sector.

As the crude oil import bill of the country has reached US$38.77 billion (Rs 171,702 crore) in the year 2005-2006, import dependency would place a larger economic burden in coming years. In this context, transition to non-traditional sources would become critical in substantially reducing import dependency and thereby minimising the energy import bill. Achieving energy independence by 2030 can be a pragmatic plan, provided energy transition is encouraged in both commercial and non-commercial sectors and also made economically viable.

Today, the major obstacles to energy transition include the lack of sufficient technology to explore various types of alternative and renewable sources, the lack of sufficient investment, concerns about relatively high capital cost and production cost of energy transition, and lastly optimism about a fall in oil prices in the policy making circles. Despite these factors energy transition is increasingly becoming a strategic necessity as availability, accessibility and affordability of imported fuels have been significantly affected by various external challenges.

Energy transition will not only secure fuel supply but also help the country address another important challenge to development - unemployment. The President also noted that the employment generation potential of biofuels would help empower farmers economically in India's rural areas. Energy transition could be a slower process than expected now, but is a critical step towards energy independence and economic development of our country.