The government of Japan has been very instrumental in providing aid to Pakistan, as it became one of the members of Aid to Pakistan Consortium providing financial assistance to carry out its development programs since 1961.
Japan-Pakistan diplomatic and economic relations have steadily progressed since 1952. It was the year when the two formally established diplomatic relations in the backdrop of the World War-2, as Pakistan got independence in 1947 and Japan had suffered a major setback of its economic downturn. But the history of such relations dates back to pre-partition days when the first ever Trading Company from Japan started its business activities in 1918 and first Japan bank opened its branch in 1925 in Karachi.
The government of Japan has been very instrumental in providing aid to Pakistan, as it became one of the members of Aid to Pakistan Consortium providing financial assistance to carry out its development programs since 1961. Since then, Pakistan has received more than US $12.00 billion financial assistance in the form of loans, grants and technical cooperation for its development programs right from health, education, technical education and skill development to security apparatus at airports and sea ports. Japan has been very generous in providing aid to help out Pakistan in the time of crisis, like the one at the time of earthquake in 2005 in rehabilitation and rebuilding.
Japan is five trillion dollars economy and is one of the largest donors in aid supporting the developing economies of the world. Pakistan is around 350 billion dollar economy with a lot of debt having over riding effect on development projects suffering from debt servicing.
The Japan International Cooperation Agency (JICA) has been very active in providing support to multiple development projects including but not limited to only hardcore projects like Indus Highway, Ghazi Barotha Hydropower, Jamshoro Thermal power, Daudkhel Fertilizer, Kohat Tunnel but also social sectors interventions like children hospitals, basic health units, technical/vocational education, water supply schemes etc. The role of Japanese aid agency has been tremendous and well appreciated in all aspects. It has played an unparallel activist dynamic role in uplifting social sectors of economy of Pakistan. It is one of the reasons that Pakistan and Pakistani people have a lot of regards and respect for Japan keeping Japanese people in highest of the esteem for their unstinted support to Pakistan.
Japan is five trillion dollars economy and is one of the largest donors in aid supporting the developing economies of the world. Pakistan is around 350 billion dollar economy with a lot of debt having over riding effect on development projects suffering from debt servicing. The JICA has been supporting Pakistan all the way for the development of social sectors through bilateral assistance of almost 600 million dollars annually on average. The social sectors assistance programs in the field of education, health and technical/vocational skills development are still underway for the welfare of the people of Pakistan.
The key to economic prosperity is public-private partnership in the new paradigm shift. The Trade Development Authority of Pakistan (TDAP) and Japan External Trade Organization (JETRO) have been effectively mutually working for one and the only objective to enhance trade and investment in both of the countries.
There are about 800 Japanese in Pakistan, while about 18000 Pakistanis are in Japan busy in different businesses, as currently about 85 Japanese companies operating in Pakistan providing employment to ten thousand people and contributing around 65 billion rupees in taxes. The famous Suzuki motors brought affordable brands facilitating the people in the field of automobile, where Japan used to have an edge over others. The Toyota motors are very popular in Pakistan for their durability with performance in rugged barren areas in contrast to other brands from different countries only effectively plying in urban centres. There are bilateral agreements to promote and protect the investment from Japan right from the beginning between the two governments.
There are also bilateral business forums promoting trade and investment in both of the countries. Pakistan-Japan Business Forum (PJBF) is busy promoting businesses in various fields since 2001. The directors, ten from each country of this forum are from business community, who could in effect contribute a lot in business promotion. The directors are elected for a period of three years, which could be extended for another term of three years if mutually agreed. They are in touch with different ministries and divisions, also involving commercial diplomats from embassies, for business promotion holding events, exhibitions in both of the countries through trade delegations. Monthly meetings of this forum are regularly held to further enhance and deliberate on issues of mutual business interest.
There is also a counterpart of the PJBF in Japan called and designated as Japan-Pakistan Business Cooperation Committee (JPBCC). They usually conduct regular monthly meetings along with a mechanism called ‘Joint Dialogue’ for the mutual interest of business promotion in Japan and Pakistan. The meetings are arranged for Government to Government (G to G) negotiations and Business to Business (B to B) interactions. The discussions and deliberations are made through this mechanism of meetings and interactions to promote investment and remove hurdles in the way of business on mutual agreed terms and conditions acceptable to all. The diplomatic channels, especially the economic diplomacy framework, are effectively utilised for improvement and promotion of investment, trade and business.
The key to economic prosperity is public-private partnership in the new paradigm shift. The Trade Development Authority of Pakistan (TDAP) and Japan External Trade Organization (JETRO) have been effectively mutually working for one and the only objective to enhance trade and investment in both of the countries. The results of such efforts of both the organizations are not that bad, rather encouraging needing appreciation. Besides JETRO, there are also Japanese Associations of Commerce having their presence in Karachi, Lahore and Islamabad.
Pakistan has a great potential due to abundant young labor force and a huge economic market. It is also considered as an important country for maintaining and promoting peace and security in the region.
The chart of imports and exports from Pakistan to Japan or from Japan to Pakistan, one can vividly note down chemicals, yarn, textile products, leather and metals being imported by Japan, while automobile, auto parts, steel, rubber products, heavy machinery and hi-tech items being imported by Pakistan. Naturally, the imports of one country are, in fact, exports of the other country being mutually exclusive. The sales of Japanese products and items in Pakistan range in billions. The exports from Pakistan to Japan are a little more than US $200 million, whereas imports from Japan to Pakistan are almost around US $1500 million. The recent investment by Japanese companies is in Yamaha motors, Marubeni-Itochu steel, Morinaga, Ajinomoto and NIPRO corporations.
The newly signed grant-in aid Japanese projects in the year 2019 along with project details are here under:
Newly Signed Grant Aid in 2019
| Sector | Project name & outline | Amount* |
| February 19 | ||
| Health | The Project for Nutrition Support for Malnourished Children and Pregnant and Lactating Women in the Hosting Districts of Afghan Refugees in Khyber Pakhtunkhwa (through WFP) ?Distribution of dietary supplements for 30,000 babies and infants and 28,000 pregnant and lactating women. Training for female health workers. | USD3.67 million |
| Peace Building Health Water Supply Education | The Project for Stabilization through Inclusive Livelihood in the Tribal Districts of Khyber Pakhtunkhwa (through UNDP) ?Rehabilitation of the basic infrastructure such as water-supply facilities for those who have returned to their communities after being displaced by the mopping-up operations against terrorists starting from 2014 (17,500 beneficiaries). Vocational training for the young population (6,000 beneficiaries). | USD3.73 million |
| Disaster Management | The Project for Strengthening Preparedness for Tsunami and Earthquakes in Coastal Areas in Pakistan(through UNDP) ?Improvement of the early-warning system for Tsunami, construction of evacuation centers, formulation of the guidelines for school children and training for capability to cope with disasters (1.5 million beneficiaries). | USD3.81 million |
| April 23 | ||
| Health | The Project for the Extension of Intensive Care at Maternal and Child Health Care Centre and Children’s Hospital in Pakistan Institute of Medical Science (PIMS) ?Establishment of an intensive care ward for mothers and children who require urgent attention, which will enable to accommodate 300 intensive-care patients a year in 2024. Provision of the medical equipment such as infant incubators. | USD33.55 million |
| Counter Terrorism Improvement of logistics | The Economic and Social Development Program ?Installation of the security inspection equipment such as X-ray cargo scanners for the smooth checking of explosive devises, arms and illicit drug at the dry ports, which handle 25% of the international cargo in Pakistan. | USD17.6 million |
| June 14 | ||
| Education | The project for Promoting girl’s education through Improved Leaning Environment in KP ?Construction of schools for girls who have currently no access to education (1,500 girls direct beneficiaries, and 51,900 residents indirect beneficiaries) | USD0.63 million |
| July 25 | ||
| Human resources | The Project for Human Resource Development Scholarship ?Providing an opportunity to 20 young civil servants to study in Japan, who are expected to play a variety of roles in formulating and implementing economic and social development policies in Pakistan. | USD2.98 million |
| August 5 | ||
| Agriculture | The Project for Agri-food and Agro-industry Development Assistance in Pakistan (through UNIDO) ?Support to create a value chain of agricultural products by the provision of agro-processing equipment, construction of storage warehouses and technical assistance for producing, processing and distributing agricultural products. | USD5.19 million |
| October 29 | ||
| Health Education Water Supply | The Project to improve the environment of health, education, water and sanitation for Afghan refugees and Pakistani communities (through UNHCR) ?Rehabilitation of medical facilities and supply of medical equipment (50,000 beneficiaries). Rehabilitation of schools and extension of classrooms (2,000 beneficiaries). Construction of tube wells and water distribution facilities (18,000 beneficiaries). | USD2.2 million |
| November 17 | ||
| Education Social Welfare | The project for Developing educational support system for Children with Disabilities in Haripul District ?Support to popularize inclusive education which enables disabled and healthy children study together (1,600 children direct beneficiaries and 5,400 residents indirect beneficiaries). | USD0.44 million |
| December 9 | ||
| Governance | The Project for strengthening the rule of law in the newly integrated areas of Khyber Pakhtunkhwa for its peace building (through UNDP) ?Construction of police stations, formulation of annual police program and training for the tribal police (7,500 beneficiaries). | USD3.53 million |
| December 11 | ||
| Health | Polio Eradication Program (through UNICEF) ?The program enables 20 million children who are less than 5 years old be vaccinated. | USD4.49 Million |
*Recalculated figure at a rate of 107.9 yen per dollar.
In addition to the above mentioned, the Government of Japan provided USD185 thousand in total as the Grant Assistance for Grassroots Human Security Projects to support the following three development projects on education and social economic development formulated by the NGOs deeply related to Pakistani local communities. 14,000 persons have benefitted through these projects.
- March 11: The project of expanding a public elementary school in Patoki Kasur district, Punjab
- March 11: The Project for Improving Facilities of Girls Primary School Shaikhabad, Peshawar District, Khyber Pakhtunkhwa
- November 6? The Project for Street Pavement in Six Villages UC Beer, District Haripur, Khyber Pakhtunkhwa
Pakistan has a great potential due to abundant young labor force and a huge economic market. It is also considered as an important country for maintaining and promoting peace and security in the region. Year 2022 will mark the 70th anniversary of the establishment of diplomatic relations between Japan and Pakistan. Throughout these years, the Government of Japan has supported Pakistan in its efforts to improve the socio-economic development and it stands committed to continue this support even in the future.
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