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 Politics & Policy

Pervez Musharraf visit to Japan

Gen. Musharraf tried his best to make the visit as productive as possible

Mar 25 - 31, 2002

The outcome of President General Pervez Musharraf 4-day official visit to Japan has evoked mixed reactions. It has not been successful in the sense that it failed to achieve any fresh grant or loan but it has certainly helped in a better understanding of Pakistan's economic and political problems and obtain a solemn pledge from the host country for its continuous political support and economic assistance in future.

General Pervez Musharraf's visit had both political and economic content. As far as political aspect is concerned it is reassuring that the Japanese Prime Minister endorsed Pakistani position on tension in South Asia.

However, economic aspect of the visit has left much to be desired. Japan being Pakistan's biggest trading partner (with balance of trade dangerously favouring Tokyo), Islamabad legitimately expected some economic relief or concessions. In the post-September 11 period, Pakistan has successfully negotiated debt relief packages with some countries including the United States that has agreed to write off debt worth about 1 billion dollar but Japan so far has given no indication of providing any relief on $ 5 billion debt. Again Pakistan was seeking restoration of normal export credits, export insurance for Pakistani exporters and better market access but no meaningful progress is in sight. The only positive indicator is an agreement to initiate high-level economic policy dialogue to institutionalize the existing economic cooperation.

That any fresh financial aid from Japan was unlikely was predicted by the head of Economic and Development section of the Japan embassy in Pakistan Miss Asoko Okai on the very day President Musharraf left for Tokyo. In a press interview categorically said "as President Pervez Musharraf embarks on the tour of Japan, he would get latter's solemn pledge for continuous political support and economic assistance in the future, but announcement of any further ODA loan or financial grant is highly unlikely. Japan has categorically informed Pakistan that waiver, or swap, for its $5 billion debt, which it owes to Japan, is not possible due to legal bindings."

"Japan played key role to get the best possible agreement for Pakistan in Paris Club meetings for the rescheduling of its $15.5 billion loans. Now bilateral arrangements between the two countries for the rescheduling of $5.8 billion Pakistan owes to Japan, have to be concluded by the end of September this year. This will also be done in the best possible way", Okai added.

About the possibility of new commitments during President Musharraf's tour of Japan, she said: "Well, it's none. For the time being, we will wait and see the economic situation of the country and then decide. This is also not a matter to be discussed at such a high level".

It cannot, however, he denied that Gen. Musharraf tried his best to make the visit as productive as possible. His main focus has been the business community and to allure foreign investment in Pakistan. In his address to the Pakistan Japan Forum on Tuesday the day he arrived in Tokyo President General Pervez Musharraf extended an open invitation to Japanese investors to use his country as a hub of industry to export their products around the world. Elaborating upon the business prospects in Pakistan, he pointed out that economic revival being one of the four goals of his government, many and varied are the opportunities unfolding in widening range, as it is working determinedly for opening up the market and reducing tariff as a committed member of the World Trade Organization. This, he made it a point to explain, why his government has opened all the sectors of the economy to foreign investors. The economic relationship between the countries as marked by Japan's top position among bilateral donors to this country and quite strong Japanese presence in our trade and industry, the need for elaborating upon the prospects of further strengthened ties must have been felt due to the economic degeneration caused by long decades of economic mismanagement from the thrust of flawed governance.

On the second day of his 4-day official visit to Japan, President General Pervez Musharraf held a meeting with the top executives of 20 leading corporate companies and invited them to make investment in Pakistan in a wide range of profitable projects. He impressed upon them the importance of Pakistan's commercially strategic location from where, he pointed out, the Japanese entrepreneurs could successfully seek export outlets into the Middle East countries and Central Asian Republics, besides South Asia. He also emphasized that after the return of peaceful political conditions in Afghanistan with Pakistan's active support to the coalition partners in the war against terrorists in Afghanistan, access to the entire Central Asia was no more difficult to take advantage of. In this context, he advised the Japanese investors to participate in the laying of a gas pipeline from Tajikistan to Pakistan via Afghanistan, which would benefit Pakistan's economic development. The President also pinpointed the avenues of oil and gas development, energy sector, information technology and medium scale industries in which Japanese investors could support development efforts in Pakistan.

The Finance Minister, Shaukat Aziz, offered a concrete proposal to the Japanese entrepreneurs in his meeting with them when he said that the government would be prepared to allocate special industrial areas in the different Export Processing Zones in Pakistan exclusively for Japanese investors. He pointed out that they would be enjoying tax holiday, including zero tariff facilities in addition to freedom from labour laws in these zones.