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TEXT: Diplomatic relations between Pakistan and Japan has reached 70 years in 2022. Pakistan had gained independence in 1947 and Japan at the same time was emerging from the ravages of World War II to regain its position in the comity of nations. Both countries started their relationship as emerging nations. Pakistan was the only major country from South Asia which attended the San Francisco Peace Conference in 1951. Speaking courageously at the conference, Pakistani leaders talked about peace, justice and reconciliation in the aftermath of the world war. Pakistan was in the forefront welcoming Japan’s return to the international community. Such gestures led both countries to establish their diplomatic ties on April 28, 1952. Since then, the Pakistan-Japan relationship has made steady progress and has kept growing to the mutual benefit of both countries. Japan has since remained a cornerstone of Pakistan’s economy as well.

Interestingly, Pakistan was the destination of the first inaugural trade delegation of Japan under the allied occupation in 1949. Within the first decade of Pakistan’s independence, some 50 multinational Japanese companies had already set up their offices, mainly for trading purposes with Toyota Tsusho opening its branch office in 1952. The third ever overseas branch of the Bank of Tokyo, later Bank of Tokyo Mitsubishi and now UFG, was established in Karachi in 1953 while for the opening of the second office of Japan External Trade Organization (JETRO), the location selected was also Karachi. Pakistan was the second largest trading partner of Japan, only after the United States, mainly catering to Japan’s need for raw material such as jute and cotton and fulfilling over 50% of their requirement. The Japanese on the other hand, reciprocated by exporting their technological advances to Pakistan for its benefit. Spindles manufactured in Japan contributed a great deal to the progress of the textile sector in Pakistan and which even today having progressed contributes a major portion towards its export earnings.

Japan has remained as one of the major bilateral development partners to Pakistan since 1954, extending assistance in multifaceted sectors of development. This includes Yen Loan assistance for development projects, grant assistance for social sector projects, technical cooperation for technology transfer and human resource development and grass root support to NGO’s. During the 60’s, Pakistan occupied a prominent place in the allocation of the Japanese assistance to the developing world and remained amongst the top recipients in the region. Japan’s diplomatic relation with Pakistan had, and continues to have, significance. Both nations were supportive of each other having convergent views on major world issues. While Japan was recovering from the aftermath of World War II, Pakistan was trying to establish itself as a new Nation. No wonder, the personal reception and the only one by Showa Emperor, to the visiting President Ayub Khan of Pakistan in December 1960 at Tokyo’s Haneda Airport, became a landmark in Japan-Pakistan diplomatic goodwill. This visit also paved the way to start an important economic relation as the then Prime Minister of Japan, Hayato Ikeda, had just commenced Japanese Official Development Assistance program (ODA) and of which Pakistan became a major recipient. The initial assistance of US$ 20 Million in 1961 swiftly reached 80% of total Japanese ODA by 1964. The assistance was used for mega projects as well as for industrialization. Bilateral trade has however been exceedingly in favour of Japan due to dismal performance on the part of exports from Pakistan and towards which meaningful dialogue is taking place and new avenues of nontraditional items such as agricultural produce, seafood, and information technology in under consideration and which were the main topics discussed at the recently held Joint Dialogue in Islamabad. Business to business and government to government deliberations took place.

Inspired by a common desire to promote and further strengthen relations between the two countries, the Government of Japan and the Government of Pakistan signed a Cultural Agreement in 1957. Nobusuke Kishi, Prime Minister and Minister for Foreign Affairs of Japan and Huseyn Shaheed Suhrawardy, Prime Minister of Pakistan represented their respective countries at the signing ceremony. According to the agreement, it was decided that both countries will provide each other every possible facility to assure better understanding of the culture of their respective country, especially by means of books, periodicals, and other publications; lectures, concerts, and theatrical performances; art exhibitions and cultural films. Under this agreement, both countries have initiated several projects and have conducted various activities for strengthening the cultural ties between them and leading to the formation of Pakistan Japan Cultural Association (PJCA)

On the diplomatic front, Pakistan and Japan found themselves on the same side of the divide during the Korean War and the Cold War. Then Japan, through determination and hard work of its citizens, became a modern industrialized nation and started extending Yen Loan assistance to Pakistan. Yen Credits are extended to developing countries on soft terms, characterized by a low interest rate and long maturity. These loans thus support poverty reduction through economic growth and capacity and institution building. The first Yen loan was provided to Pakistan in 1961. Since then, Japan has supported the development of infrastructure in Pakistan mainly in areas such as telecommunications, transportation and power generation. As such and through this measure, Japanese products were introduced in Pakistan. Development projects of significance funded by Japan include Indus Highway, Jamshoro Thermal Power Station, Kohat Tunnel, Bin Qasim Thermal Power Station, Daudkhel Fertilizer Plant, Ghazi Barotha Hydropower Plant, The Construction Machinery Training Center and countless others in the social sectors under their Grant Assistance program. Diplomatic relations continued to grow between Pakistan and Japan, and several agreements were inked in the ensuing years, such as the International Postal Money Order Exchange Agreement, Pakistan-Japan Agreement regarding Establishment of a Telecommunication Research Centre, Pakistan-Japan Plan of Operation for Engineering, and Economic Survey for the Development of a New Ocean Port at Pitti Creek in Pakistan. Then the Soviet War started in 1980 and Pakistan’s role in securing the withdrawal of the Soviet forces from Afghanistan contributed towards further fortifying Pakistan-Japan ties.

In response to the nuclear tests conducted by India and Pakistan in May 1998, Japan announced to freeze grant aid for new projects and Yen loans to both the countries. However, after President Pervez Musharraf’s visit to Japan in March 2002 and Pakistan’s important contribution to the global fight against terrorism in the aftermath of 9/11, relations between the two countries entered a new era. Japan supported Pakistan’s counter-terrorism efforts by providing fresh water and fuel to Pakistan vessels participating in operation Enduring Freedom - Maritime Interdiction Operation.

Pakistan sincerely appreciating Japan’s generous technical and financial assistance since 1954 issued a special postage stamp in 2004. Japan recognizing the geopolitical importance of Pakistan and appreciating Pakistan’s role in fighting terrorism announced to further expand strong collaboration at all levels. A declaration was yet again signed on April 30, 2005 affirming to work towards a renewed, enhanced and robust relationship. Both sides appreciated the role of leadership exchanges in enhancing bilateral relations in different areas.

To extend support to the democratic Government of Pakistan in its efforts to consolidate democracy in Pakistan and to facilitate social and economic development in the country, Japan hosted the Friends of Democratic Pakistan and Donors’ Conference in Tokyo in April 2009 which conveyed pledges in excess of six Billion Dollars. The then President, Asif Ali Zardari twice visited Japan in 2009 and again in 2011. Both the visits provided further impetus to strong bilateral ties. Japan has supported Pakistan on various fronts as a sincere friend, stepping forward to help Pakistan after the countrywide floods in 2010. It announced contributions for flood relief and rehabilitation efforts at the Pakistan Development Forum held on November 14 and 15, 2010. Japan also sent SDF helicopters and medical teams for relief and rehabilitation of flood affectees. Reciprocating the gesture, Pakistan also expressed its solidarity and support to the government and people of Japan in the aftermath of devastating earthquake and tsunami that hit Japan in March 2011. Government dignitaries visited the Japanese Embassy to convey their sympathies and express solidarity with the people of Japan. Two C-130 loads of relief goods were provided by the people of Pakistan. Representing the sentiments of the entire Pakistani nation, Pakistan Embassy with Noor Muhammed Jadmani as Ambassador in Tokyo, along with the Pakistani community personally helped the victims by providing them hot food, disposable water bottles and other goods, and voluntarily worked in the shelters to provide relief to the affected.

Japan is the third largest economy in the world with a GDP of over 5 trillion Dollars. It is also a major trading partner of Pakistan as well as a major donor. Their total global imports are in excess of 500 billion Dollars with Pakistan's share at a mere 0.05 %. Our imports from Japan are around 2 billion Dollars while our exports stand at a meager 250 million Dollars as an average on an annual basis. To bridge this gap, Pakistan needs to move away from traditional export of raw materials and concentrate more on value added goods. Pakistan stands amongst the top producers of cotton, wheat, fish, sporting goods, cutlery, gems, surgical instruments, fruits, dairy products, and the like. If only Pakistan succeeds in acquiring state of the art technology by inviting joint ventures with Japanese Companies, the trade gap can be substantially reduced. Information Technology is an emerging sector which has already been introduced and a couple of Japanese companies are already in operation.

Pakistan is strategically located besides offering a market with over 220 million people. It has the requisite manpower available and is blessed with natural resources that any nation can desire. As such, it offers immense opportunities to Japanese investors to come, establish and expand their businesses. All Pakistan needs to do is to provide the necessary infrastructure and requisite business environment. In today's world, governments are competing amongst themselves to attract investments and with the markets in and around Pakistan; there is no reason why Pakistan should be left behind. Pakistan is now offering Special Economic Zone to the Japanese with attractive benefits such as sole ownership, tax exemptions, repatriation of earnings and single window operations. The Board of Investment set up for this purpose is making efforts while National Industrial Parks, another organization under the Ministry of Industries is offering developed industrial estates in different provinces at very reasonable terms. Japanese businessmen as well as Japanese Government have been in discussion with their counterparts on this matter. Such combined efforts portraying public-private partnership will bring about meaningful results to attract joint ventures for Pakistan which in turn will provide job and business opportunities to Pakistanis. Currently there are over 80 Japanese entities operating in Pakistan.

Pakistani businessmen are being encouraged to establish contacts with their counterparts in Japan for joint ventures and export of value-added goods from Pakistan. Both the Pakistan Embassy in Japan and Pakistan Japan Business Forum in Pakistan (PJBF) are available to assist and connect the business communities of both the nations. Pakistan Embassy in Tokyo is very actively pursuing the agenda of increasing trade between the two nations and bringing investments into Pakistan from Japan. Towards this Pakistan’s Ambassador in Tokyo, Raza Bashir Tarar is exploring all avenues available to impress upon the Japanese businessmen the opportunities Pakistan offers by way of natural resources as well as human resources to them. Similarly, Pakistan-Japan Business Forum and its members are pursuing with Pakistan authorities to minimize the bottlenecks that stand in the way of trade and investments between Pakistan and Japan. The 7th Government and 9th Business Joint Dialogue held in Islamabad with PJBF participating with over 100 delegates has paved the way to a better understanding between the governments and the business communities of the two nations.



Chairman Pakistan-Japan Business Forum

Copyright Business Recorder, 2023


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