An overview of Pakistan-Japan relations

The year 2017 will mark 65 years of Pakistan-Japan diplomatic relations since in April 1952 it was established. However, mutual contacts had started much earlier when in 1948 the first trade mission from Japan had arrived in Pakistan, which had the same year recognised Japanese Overseas Agency (JOA) resulting in the signing of the first trade agreement in July, 1948.
First Prime Minister of Pakistan, Liaquat Ali Khan, during his visit to Washington in May 1950 had pushed for the early signing of US-Japan Peace Treaty and restoration of Japanese economy after the WWII and which was subsequently signed in September 1951 and commonly referred to as Treaty of San Francisco. It was again the first Foreign Minister of Pakistan, Sir Zafarullah Khan, who was actively involved with the move for Japan's membership to the United Nations and which was allowed in 1956. It may be mentioned that as early as in September of 1954, the United States, France, Great Britain, New Zealand, Australia, the Philippines, Thailand and Pakistan had together formed the Southeast Asia Treaty Organisation, (SEATO) making Pakistan an important and strategic partner of the US from Asia. Today, Japan is now the second largest financial contributor to the UN. Following the establishment of diplomatic relations between the two nations in April 1952, the then Prime Minister of Japan, Shigeru Yoshida, sent a special 3-member Japanese goodwill mission to Pakistan. It was in 1962 that Emperor Akihito and Empress also visited Pakistan as Crown Prince and Crown Princess.
Japan is now a major trading partner as well as a donor to Pakistan. Japan has been a member of the Aid to Pakistan Consortium since 1961 and has been regularly assisting Pakistan with its development programs by providing financial support. Standing as the third largest economy of the world, Japan has a nominal GDP of close to five trillion Dollars, while that of Pakistan 250 Billion. The annual development assistance from Japan to Pakistan over the years has gradually increased and now averages at Dollars 500 Million which includes project loans for infra-structure development, outright grant assistance for the development of social sectors such as Health and Education and technical assistance for the promotion of expertise and technology transfer. Japan is a major contributor towards Pakistan's Polio Eradication and has contributed more than 200 Million dollars; divided equally between grant and soft loans. It is expected that Pakistan will be polio free in 2017 with around 50 known cases as of last year. Japan is amongst the top donors of bilateral assistance to Pakistan and amongst the first to receive from Japan in 1954. Total assistance to Pakistan so far is more than Dollars 12.00 Billion and is funded through Japan International Cooperation Agency (JICA). Japan has been in the forefront to assist Pakistan with its development needs; an example of which was the hosting of Friends of Democratic Pakistan Conference (FDOP) in April, 2009 inviting all friendly countries to make pledges in order to support Pakistan after returning to democracy. Pledges of over Dollars 6 Billion were made by various participating countries, with the then President of Pakistan himself attending.
In Karachi, historically being a commercial hub, Japanese entities were present even before Pakistan's independence with the first Trading Company being established in 1918 and the first Japanese Bank in 1925 and the second anywhere in the world from Japan. Currently, there are over 80 Japan affiliated companies now operating in Pakistan providing employment to over ten thousand and helping the government exchequer annually with over 60 Billion Rupees in taxes. In the industrial sector, Japan leads the automotive sector with almost all known Japanese brands with their presence; the first amongst them to start in 1980 and to be the first ever investment made by Japan overseas in this sector. Ironically and as a percentage, there are more Japanese vehicles plying in Pakistan then in Japan. Recently, a major manufacturer has announced its intention to invest yet another 500 Million dollars to expand their existing facilities. To protect such investments and to further promote it, an agreement was signed between the two governments in 2002.
Pakistan-Japan Business Forum (PJBF) is a Bi-Lateral forum established in 2001 with a view to promote trade and investments between the two friendly countries. To achieve this objective, the formation of its Board of Directors comprises of ten Directors each from Pakistan and from Japan elected for a period of 3 years. Currently, it is led by Sohail P. Ahmed of the House of Habib as its Chairman with Kimihiro Ushimaru, the country General Manager of Marubeni Corporation as the Senior Vice Chairman representing the Japanese side. The Consul General of Japan in Karachi, Toshikazu Isomura is the Patron with the Ambassador of Japan in Islamabad, Takashi Kurai, as the Patron-in-Chief. Amongst the various activities of the forum is holding of events and inviting the decision makers in the government connected to business matters which include the Ministers, Secretaries as well as CEO's of related organisations such as Trade Development Authority of Pakistan (TDAP), Board of Investment (BOI), Federal Board of Revenue (FBR) and the like. Members interact with them as it provides them with a platform to air their views and seek help on matters of interest to their businesses thereby directly bringing it to the knowledge of the concerned. Participation in exhibitions such as Expo Pakistan under Japanese Umbrella, arranging trainings both in Pakistan and in Japan on specialised subjects, managing and linking trade delegations to visit Japan and interact with their potential counterparts as well as liaising with Embassies in both countries to ensure the maximum utilisation of their presence for the business community, are amongst the few initiatives that are undertaken by the Forum. The Board of Director of PJBF meet monthly to review progress. PJBF has also taken the lead to call upon all heads of Bi-Lateral Business Forums operating in Pakistan to jointly come up with a working paper highlighting issues common to all which can then be taken up with the government for corrective measures.
The counter part of PJBF in Japan is Japan-Pakistan Business Cooperation Committee (JPBCC) and which is currently headed by Teruo Asada, the Chairman of the Board of Marubeni Corporation, itself a conglomerate in Japan with a turnover in excess of 60 Billion Dollars as of March, 2016. Delegations between the two alternatively take place each year for what is called the "Joint Dialogue". Meetings are arranged for Government to Government (G to G) negotiations as well as Business to Business (B to B) interaction. It was in November, 2015 that JPBCC, along with a 50-member delegation, visited Pakistan for the Joint Dialogue which primarily discussed the progress since the last dialogue and signed yet another memorandum of understanding reached after the deliberations and addressing the impediments standing in the way of trade and investments as well as the areas where support and contribution towards achieving it can be made by either side. Pakistan's Ambassador to Japan, Farukh Amil, is in regular touch with both JPBCC in Tokyo as well as with PJBF in Pakistan to assist in the matters of investments and improvement in trade; hence supporting the aim of Public Private Partnership which is essential for growth in any country.
Japan External Trade Organisation (JETRO), operating under the Ministry of Economy, Trade and Industry (METI) of Japan was established in 1958. It opened its office in Karachi, the second overseas office anywhere in the world. Currently it is headed by Osamu Hisaki as the Country Director. In a recently published business directory of Japanese and Japanese Affiliated Companies in Pakistan, it mentions the names of almost 60 companies having either 100% ownerships or in Joint Venture with Pakistani companies. JETRO's prime objective, as the name implies, is to promote trade activities and encourage investments between Pakistan and Japan. Almost 200 companies are listed in the directory who are actively involved in business with Japan.
There are three Japanese Associations of Commerce and Industry (JACI) located in Karachi, Lahore and Islamabad. The purpose of JAIC is to meet regularly, exchange notes in respect of trade and investments and convey to either governments their observations regarding business matters that need their attention. Japan's major imports from Pakistan include chemicals, yarn, textile products, leather and metals while Pakistan's major imports from Japan include automobile and automobile parts, steel, rubber products as well as a variety of machinery and Hi-Tech items. Investments by Japanese Companies during the last decade is in excess of $800 Million. The Japanese Companies operating in Pakistan are realizing a sales volume of close to Rs 300 billion. Recent investments into Pakistan by Japanese concerns are Yamaha Motors, NIPRO Corporation, Marubeni-Itochu Steel and Ajinomoto Corporation while several Japanese entities are looking towards Pakistan as a potential destiny. Imports from Japan is close to 2 Billion Dollars while exports from Pakistan stand a little over 200 Million Dollars; thus, tilting the trade balance heavily in favour of Japan. Over 1000 Japanese are resident all over Pakistan which include those from Japanese business houses, Government of Japan, JICA, JETRO and NGO's from Japan operating in Pakistan. Pakistan with its improved security situation, rapid development of infrastructure, consistency in economic policies and above all the investment from China in the form of China-Pakistan Economic Corridor (CPEC) is being viewed by many in Japan as a potential destiny for improved trade and investments.