Pak-Japan economic bilateralism (Pakistan Observer)

HISTORY of relations between Pakistan and Japan dates back to the post World War-II period when devastated Japan was trying to emerge from the ashes of war.

Pakistan itself being in state of infancy, extended a friendship hand to Japan and played a substantial role during its testing times (1947 to 1951). Like a friend indeed, it not only reached out various fields to animate them but tried a level best in restoration of Japan’s sovereignty. Pakistan unlike many other Asian countries forbore from engaging Japan in reparation of war and aimed at building its economy by putting down a foundation of bilateral economic relations.

In May 1957, Japanese Prime Minister Nobusuke Kishi undertook official visit to Pakistan which was also marked as first ever visit from a Japanese premier. Pakistan also bucked up Japan to first constitute diplomatic relations with all Asian countries before establishment of Asian Development Bank.

In 1960s, Pakistan got a meridian position in Japanese pursuit to channelize its assistance to the Asian region and rest of developing world. In November 1961, Japanese Prime Minister Hayato Ikeda visited Pakistan as part of his Asian tours and proffered a loan of 20 million yen to Pakistan.

Even as Japan was recuperating from the backwash of World War-II, struggling to establish friendly relations with Asian nations, Pakistan was trying to lay down itself as a new nation by fortifying ties with many advanced nations like Japan. This actually paved the way to start an important economic relation, as the Official Development Assistance (ODA) program was launched by Japan in 1961of which Pakistan was a major recipient.

The initial aid was 20 million dollars in 1961 and Pakistan swiftly reached up to 80 percent of the total ODA disbursements by 1964. The assistance was aimed at to be utilized primarily for mega projects and industrialization. Still, Japan is one of the largest trading partners of Pakistan with an annual trade more than 4.5 billion US dollars.

Various significant development projects were also commenced by Japan during different time period including the Indus Highway and the Kohat Tunnel, known as symbol of Pak-Japan friendship with provision of soft loan of 80 billion rupees.

A 10 billion rupees grant for Polio Eradication Program in 1996, 11 billion yen grant to Pakistan Institute of Medical Science, technical assistance to establish telephone exchanges throughout Pakistan, assistance to construct the Thermal Power Station Jamshoro and Bin Qasim Thermal Power Station, the Construction of Machinery Training Centre and innumerable other projects in the social sectors under Japanese assistance program have been carried out in recent past.

Several agreements were signed that include the International Postal Money Order Exchange Agreement, the Pakistan-Japan Agreement regarding Establishment of a Telecommunication Research Centre, and the Pakistan-Japan Plan of Operation for Engineering and Economic Survey for Development of a New Ocean Port at Pitti Creek.

Since 1954, in total 5792 Pakistani trainees have been sent to Japan by JICA (Japan International Cooperation Agency). Even today, Japan is still the third largest OECD (Organization for Economic Co-operation and Development established in 1960) donor to Pakistan after USA and UK. The total amount of aid received by Pakistan from Japan up till now is 1278 billion rupees. A declaration was signed on April 30, 2005 that states both the countries would encourage leadership role in various areas and adhered to continue holding dialogues on politics and security.

Japan in all time has patronized Pakistan’s endeavors to corroborate democratic norms to promote social and economic development. In this connection, Friends of Democratic Pakistan Ministerial Meeting and the Pakistan Donors Conference in Tokyo in April 2009 were hosted by Japan.

In 2010, while Pakistan faced countrywide catastrophic flood, Japan plied for the flood relief and rehabilitation travails which include Self-Defense Force, helicopter and medical teams. Pakistan on its side has always demonstrated its suasion and good-will gestures to the Japanese people. For instance in the consequences of ruinous earthquake and Tsunami, Pakistan expressed its solidarity and support to the government and the people of Japan in letter and spirit. Pakistan also turned to lend a greater hand by providing Japan two C-130 aircraft carrying relief goods.

Pakistan is pursuing to develop economic and trade cooperation with Japan and pursuing major energy companies to invest in Pakistan. Prime Minister Mian Nawaz Sharif visited Japan in September 2013 and in meeting with his Japanese counterpart Prime Minister Shinzo Abe sought Japan’s help to overcome energy crises in Pakistan.

Today, Japan is the third largest economy of the world and its total export is more than US$ 500 billion. While Pakistan the first trading partner of Japan in post-war period today only constitutes 0.05 (?) in Japanese imports. Pakistan under the leadership of recent government is focusing on to offer a Special Economic Zone in Pakistan with attractive package which includes benefits of sole ownership, tax exemption and compensation of earning and single window operations. For this purpose Pakistani Finance Minister visited Japan in January 2015 and tried to mobilize Pakistan’s Special Economic Zone Plan for Japanese investors during a delegation level talk held by Pak Japan Business Forum and Japan Pakistan Business Cooperation Committee in Tokyo.

In order to sustain multi-purpose task including political, economic and cultural cooperation dialogues, Pakistan and Japan have also established Parliamentary Friendship Group. Stimulating the objectives of Cultural Exchange Agreement signed in 1957, Pakistan Japan Cultural Association (PJCA) has been established with offices in Islamabad, Lahore, Karachi, Quetta and Peshawar. Hundreds of Pakistani students, researchers, artists and journalists are benefited through this cultural exchange.

Japan being the world’s thirdlargest economy, having achieved remarkable growth in second half of the 20th Century is a partner of Pakistan. However, the trade volume between the two countries is far below the potential. Despite having immense prospects of growth, the trade balance remains in the favor of Japan. It is high time for the two countries to focus on broadening the scope of mutual cooperation by extending it to the areas of trade, investment, energy and infrastructure development including all other sectors of interest.

To make progress for active engagements of the Japan and Pakistan Trade ministries which could act as resource base for exchanging information. Exchange of trade delegations and holding of joint trade exhibitions would also help in promoting bilateral trade.

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