The Hindu : International : Japan to resume yen loans to Pakistan

Online edition of India's National Newspaper
Sunday, May 01, 2005

International

International

Japan to resume yen loans to Pakistan

B. Muralidhar Reddy

Aid signals support for Musharraf's fight against terror

ISLAMABAD: Japan on Saturday announced the resumption of yen loans for infrastructure development in Pakistan. Aid was suspended after Pakistan tested a nuclear weapon in 1998.

Tokyo's decision to revive the programme was announced by the visiting Prime Minister, Junichiro Koizumi, at his meetings with the Pakistan President, Pervez Musharraf and the Prime Minister, Shaukat Aziz. The details of the programme are yet to be announced.

The resumption of the yen loans is expected to substantially boost the infrastructure development in Pakistan. Islamabad was one of the biggest recipients of the Official Development Assistance (ODA) averaging about $500 million a year till it was suspended after the nuclear tests.

In line with the American policy of economic assistance to Pakistan after the September 11 incidents, Japan released a grant of $300 million to Islamabad and rescheduled Pakistan's debt amounting to $4.5 billion. However, it did not resume yen loans.

In the course of the current visit by a Japanese Prime Minister, taking place after a gap of five years, Tokyo wants to send a clear signal that it is fully behind Gen. Musharraf in his "international war against terrorism." Both sides are set to issue a joint communiqué spelling out their commitment to stronger economic and political ties.

Both countries hold divergent views on U.N. reform and expansion of the Security Council. Japan is also concerned about nuclear proliferation, particularly in the context of Pakistan's reported assistance to North Korea.

Mr. Koizumi has sought the support of Pakistan to bolster Japan's bid for a seat on the Security Council. However, Gen. Musharraf reiterated that Pakistan was opposed to the "hasty" expansion of the Security Council as it would only create more centres of privilege. Instead, Pakistan advocated the line of "comprehensive reforms" of the U.N.

During their 90-minute meeting, Gen. Musharraf and Mr. Koizumi agreed that rejuvenating their bilateral economic relationship would contribute significantly to regional progress and stability.

Receiving the Japanese leader warmly at the Aiwan-e-Sadr (Presidential palace), Gen. Musharraf said Pakistan greatly valued its political and economic ties with Tokyo adding that the country looked forward to expanding its trade with the second largest economic power in the world. He apprised the visiting Japanese leader about Pakistan's efforts at bringing about lasting peace in South Asia through the resolution of all issues, including Kashmir with India.

Gen. Musharraf said Pakistan was firmly against nuclear proliferation. "Pakistan is a responsible member of the international community and has a strict command and control system in place and its strategic assets are in safe hands."

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