A major initiative of Japan to help Pakistan

Feb 23 - Mar 01, 2009

It seems that Shaukat Tarin Advisor to the Prime Minister on Finance has done his home work properly before proceeding to Japan with an obvious purpose of seeking its help to Pakistan in its efforts to stabilize its economy.

He was still in Tokyo when an important Japanese newspaper reported that Japan was in the process of inviting more than ten countries to a meeting to be held in late March or early April with a one point agenda of getting financial commitments from bilateral, referred as friends of Pakistan, to support Pakistan Development Programme and thereby strengthen its Government's hand to fight terrorism and extremism.

According to reports, advisor to the Prime Minister on Finance told his Japanese counterpart that Pakistan will not expect any monetary help from Japan, but will definitely appreciate economic assistance against a menu of projects. Shaukat Tarin said this while briefing Japanese media after holding meeting with the Japanese Prime Minister. Tarin said: "We have asked Japan to set up exclusive economic zones in Karachi and Gwadar." He said Pakistan was interested in developing its agriculture, manufacturing and energy sectors with the assistance of Japan, and added that strategic needs of Pakistan, such as development of water resources, roads, railways and poverty reduction were also discussed with the Japanese leaders.

This will be another forum to be formalized at Japan's initiatives. The earlier one had already held two meetings in Abu Dhabi a next is scheduled to meet in March. As announced by the Foreign Minister, while speaking at a meeting of Inter Provincial Coordination on the initiatives of "Friends of Pakistan" on January 29, experts committee meeting will be held in Islamabad end February before the formal ministerial meeting to be held in Abu Dhabi in March. The inter provincial meeting which was held in the Foreign Office was chaired by the Foreign Minister Makhdoom Shah Mahmood Qureshi and attended by the Advisor to the Prime Minister on Finance, Deputy Chairman Planning Commission, Secretary General to the President, Chairman National Reconstruction Bureau and representatives of the concerned ministries.

The Foreign Minister welcomed the participants to the Ministry of Foreign Affairs with following introductory remarks: "We have gathered here today for an important assignment. You would recall that the Friends of Pakistan was launched on the sidelines of the UN General Assembly in New York on September 26 last year. Since then, the initiative has evolved into an important framework for the international community to express its support to Pakistan. It now has a well defined work plan and a clear roadmap. At the Abu Dhabi meeting last November, the High Officials of the Friends unanimously recognized that the friends of Pakistan stand shoulder to shoulder with it in its journey to build a strong, progressive and prosperous Pakistan."

It is important to fully understand and appreciate the strategic vision of this initiative, which was launched by the President of Pakistan. The initiative provides a forum to our friends to "build strategic partnerships" with the Government of Pakistan to foster peace and stability in the region, promote economic development and financial stability, address energy needs and build institutions.

This vision was articulated in the Abu Dhabi meeting with the unanimous support of the FOP. It is now important that we translate this agreed shared vision into actionable programmes. And to this end, today's meeting assumes pivotal importance. All four clusters of co-operation identified in the agreed work plan are important and inter-linked. While development cluster is dealing with a whole range of socio-economic issues from education to health and to economic development, a suggestion has been made to also discuss issues relating to financial stability, market access, and other related proposals.

Security cluster is of profound importance given the prevailing security situation in the country. And so are the energy and institutions building clusters. 'Given the importance of this initiative and the hard work you have all put in, I would like to attend all presentations being made today. Besides the project-based co-operation, we need to make progress on other tracks as well. The idea of World Bank Trust Fund has been stressed by most of the Friends. It is important that the United Nations provides its full support to the initiative.'

The UN brings credibility and positive force to this forum. We had invited Jean Arnault, Assistant Secretary General of United Nations, to Islamabad earlier this week. We held fruitful discussions with him. I am pleased to inform you that the UN has agreed to support the implementation of the Groups' agenda through the activities of its Programmes and the organization of Group's work through the UNDP Office in Islamabad.

Modalities of these arrangements will be worked out by the Government and UN. The importance of advocacy and public diplomacy cannot be over emphasized. We must reach out to parliamentarians, civil society, business community and media in the Friends' countries so that they can provide necessary political support to their respective governments. Javed Malik, Ambassador at Large, has been working on this aspect.

The latest initiatives taken by Japan as reported by the Nikkie Business Newspaper have added new dimension in favor of Pakistan. Friends of Pakistan as a name was popularized by the present PPP government last year as it began the arduous and unsuccessful task of generating support from those it considered friendly countries.

In this context it is pertinent to recall that President Zardari visited several friendly countries within a short span of time seeking 10 to 15 billion dollar bailout package from them that would, at best, be in the form of a grant or, at worst, at a concessional lending rate.

As far back as in 1960 the World Bank organized Aid to Pakistan consortium in an effort to facilitate co-ordination amongst the major providers of assistance to Pakistan as well as for other debtor countries. By 1991 the consortium held about 92 percent of Pakistan's outstanding disbursed debt. The Aid to Pakistan consortium's members included the United States, Canada, Japan, Britain, Germany, France, and international organizations such as the World Bank and the Asian Development Bank. The World Bank accounted for 26 percent of the outstanding debt, and the ADB, which was the largest lender in the early 1990s, accounted for 15 percent. Most non-consortium funding came from Saudi Arabia and other oil-producing Middle Eastern countries. The Friends of Pakistan however included the erstwhile non-consortium members like Saudi Arabia and United Arab Emirates.

Rising extremism and insurgencies in various parts of the country is generally acknowledged to be rooted in illiteracy and lack of economic opportunities. Dealing with such socio-economic factors has long been considered as the only way to effectively deal with rising militancy in the restive border areas with Afghanistan as well as settled areas like Swat. Pakistan simply does not have enough resources to make a difference in the Northern areas and requires external assistance or such was the mantra of not only Musharraf's government but also of the present government. Thus any assistance in this regard that is being provided by the Japanese government must be appreciated.

He said Pakistan was a frontline state in war against terrorism, which had badly affected its economy. "I go back with the hope that Japan as a close friend of Pakistan will stand side by side with it in the war against terror," he said. Responding to a query, the Finance Adviser said: "Our economy is stabilising after the shock of high oil and food prices. However, Pakistan is still in need of five billion-dollar aid per year approximately for the next three to five years." Responding to another question, he said that Pakistan's total local and foreign loan was 46 billion dollar. He said that efforts were being made to reduce current budget deficit and bring down inflation. Fiscal deficit was controlled to a great extent, he added.