Economics & Business

Pakistan and Japan onto comprehensive partnership for peace and development

Tokyo: President Asif Ali Zardari and Prime Minister Naoto Kan signed Tuesday a joint statement that promises to take bilateral ties to new heights by deciding upon “a comprehensive partnership for peace and development” through multifaceted economic cooperation.

Briefing media presidential Spokesperson Farhatullah Babar said that the areas of multifaceted economic cooperation identified in the joint statement range from promoting private sector cooperation, joint ventures, food and agriculture, energy and establishment of special economic zones in Pakistan for investment by Japanese entrepreneurs. The expansion of defence related cooperation covers “training of defence personnel and enhancing cooperation between the respective defence educational institutions”.

The joint statement also reaffirms that peace and prosperity in the South Asian region is vital for the peace and prosperity across Asia and the world over. Prime Minister Kan “welcomed the agreement between Pakistan and India on the resumption of dialogue on all issues following the Foreign Secretary level talks in Bhutan on February 6”. He said that President Zardari and Prime Minister Kan also witnessed today signing of a 173 million dollars soft loan agreement for the rehabilitation of roads and bridges in Khyber Pakhtunkhwa province that were swept aside by the recent floods.

The agreement was signed by Secretary Economic Affair Division Sibtain Fazal and President JICA Ms Sadako Ogata. The 173 million dollars loan will be provided on soft terms at 0.01 % per annum interest rate and is repayable after forty years including a grace period of ten years, he said. It is part of the 500 million dollars already pledged by Japan in the meeting last year of Pakistan Development Forum. Under the project 400 kilometers of rural roads, 120 kilometers of provincial roads and over two kilometers of bridges will be constructed throughout the province that were washed during the recent floods. The Joint statement also pledges Japan’s continued support to the development of power sector, water resources and infrastructure in Pakistan.

Prime Minister Kan also hosted a banquet in honor of the President soon after signing the joint declaration and the soft loan agreement to rebuild the damaged infrastructure in KPK. The banquet was also attended by members of the entourage that included Ministers Mir Hazar Khan Bijarani, Makhdoom Shahabuddin, Chairman BOI Saleem Mandviwalla, Foreign Secretary Salman Bashir, Commerce Secretary Zafar Mahmood, Secretary EAD Sibtrain Fazal, Chief Executive TDAP Tariq Puri, Ambassador Noor Muhammad Jadmani, Spokesperson Farhatullah Babar and senior officials of the Foreign Office. Farhatullah Babar said that besides holding summit level talks with Prime Minister Kan and signing the joint statement the President also held a series of separate meetings with different Japanese political and business leaders including Foreign Minister Seiji Maehara, Minister for Economy, Trade and Industry Banri Kaieda, President JICA Ms Sadako Ogata and President of Japan’s leading business and technological conglomerate Marubeni Corporation Mr. Teruo Asad and addressed Japan Pakistan Business Cooperation Committee.

The two sides also agreed to institutionalize mechanics for streamlining trade and commerce between the two countries to take economic partnership to even greater heights. Farhatullah Babar said that multiple messages were consistently conveyed to Japanese political and business leaders throughout the one on one and group interactions.

The messages conveyed during the half a dozen interactions today included establishing a strategic dialogue mechanism at the level of the foreign ministers, enhanced market access through FTA and GSP plus, trade concessions, educational and vocational training for FATA as part of the fight against militancy, enhanced Japanese ODA and support for the up gradation of infrastructure in KPK for facilitating trade on the Pak-Afghan border and beyond. Giving a rationale for why he was asking for this support the President said that Pakistan was the front line state in the international community’s fight against militancy and had sacrificed hugely both in terms of human lives and damage to the economy.

Although Pakistan is fighting this war for its own sake but the militants are also threatening the region and indeed the whole world and it is Pakistan which has stood in their way to halt their march, he said adding that it was imperative that Pakistan was helped by the international community to stop the onslaught of the militants. Pakistan’s economy has been ruined and the best way to fight militants is to shore up his country’s economy he said.

Farhatullah Babar said that the tone and tenor of the President emphasized recognition of interdependence stating that if Pakistan depended on the international community for assistance the world also depended on Pakistan for continued peace and security. Appreciating the President’s point of view the Japanese Minister for Economy, Trade and Industry said that Pakistan was fighting for the entire world and the best way to support it was through economic development. These sentiments were later also echoed by the Foreign Minister, the Prime Minister and the business community.

President Zardari also used the occasion of his visit to announce the establishment of a special economic zone for Japanese investors on over 2,000 acres of land near Karachi wherein special concessions will be offered to Japanese investors to set up industries. He said the Japanese investors will be allowed to set up special captive power plants in the proposed special zone to meet their power needs. They would also be allowed to export their produce from Pakistan to countries in the region where Pakistan is so strategically located that half of Indian and Chinese markets and the markets of Central Asian states were closer to Pakistani ports than from anywhere else. It will be a win-win situation in which Japanese investors will have easy access to a huge regional market and special incentives to produce and export whereas Pakistan will benefit by way of jobs to its people, he said.

Farhatullah Babar said that the President also floated the idea of convening a tripartite conference of corporate leaders of Afghanistan, Pakistan and Japan to further explore the prospects of joint economic collaboration as a means to fighting militancy. The President said that the government was also prepared to consider allowing the Japanese investors to raise equity from the local stock exchanges for viable projects in Pakistan. He said there was enough liquidity in the market that could be mopped up for viable projects by reputed Japanese business houses.

Meanwhile President Zardari and Japanese Prime Minister Noato Kan were present when Japan International Cooperation Agency (JICA) and Economic Affairs Division of Pakistan singed an agreement for the ODA (Official Development Assistance) loan. According to the agreement, Japan (JICA) will extend a soft loan worth 14.7 billion Yen (Approx Rs 14.90 billion) to the Government of Pakistan for the “Khyber Pakhtunkhwa Emergency Rural Road Rehabilitation Project”. Madam Sadako Ogata, President of JICA and Sibtain Fazal Halim, Secretary Economic Affairs Division of Pakistan inked the agreement here at Tokyo.

The funds for the project will be released after obtaining the legal opinion of Pakistan’s Ministry of Law, Justice and Parliamentary Affairs. The project will address early restoration from the flood disaster which has brought serious damages throughout the country in the recent months. With another Japanese ODA loan agreement up to 5 billion Yen for “Emergency Import Support Loan”, signed on January 21, 2011, the Japanese ODA loans of total 19.7 billion Yen will be extended to flood disaster restoration activities in Pakistan. Both ODA Loans are extended on soft terms with interest rate of 0.01 percent and repayment period of 40 years including grace period of 10 years.

As a leading bilateral donor for Pakistan, JICA participated in the Damage and Needs Assessment (DNA) for the 2010 Pakistan floods, which was led by World Bank and Asian Development Bank. According to the DNA, while the total damages are estimated at more than 10 billion US dollars (around 820 billion yen), the medium and long-term reconstruction cost is estimated at about 8.9 billion US dollars (around 730 billion yen). The international community’s support has been strongly requested to assist such reconstruction activities. As a result of discussions with government of Pakistan, JICA identified two assistance projects, namely “Emergency Import Support Loan” for budgetary support; and “Khyber Pakhtunkhwa Emergency Rural Road Rehabilitation Project” for the restoration of flood damaged roads in Khyber Pakhtunkhwa.

With signing of this loan agreement, the pledges of USD500 million made by the government of Japanin PakistanDevelopment Forum held in November 2010 stands fulfilled. The funds will be released by the government of Japanthrough JICA and United Nations Agencies.

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Omer Azam

Omer Azam is Social Media Marketer, very active on propeller; he is very much interested in International Politics.

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