Pakistan had one major setback when like the other western countries Japan also suspended its major assistance to Pakistan in 1998 when Pakistan exploded nuclear test. One major loss was suspension of Yen loan to Pakistan and other industrial and technological aids. Since then Pakistani government at its highest diplomatic channels has been trying to convince Japan to restore all its grants, agreements and business deals with Pakistan.
Soon after the change of Government in Pakistan in 1999, Mr. Ichiita Yamamoto visited Islamabad from 26 to 27 of October 1999. The main objective of the visit was to pursue the Japanese goal of early signing of CTBT by Pakistan. In February 2000, Mr. Ryozo Kato, the Deputy Foreign Minister and the Chairman of the senior officials preparatory committee for the G-8 countries, visited Pakistan from 15-17 of February 2000. The visit was in the framework of Japanese ongoing dialogue with Pakistan and India on non-proliferation and disarmament issues and the security situation in South Asia. In April 2000, Mr. Seishiro Etoh them member of the House of Representatives visited Pakistan (from 24-26 of April, 2000). Mr. Etoh met General Pervez Musharraf and discussed the issues on signing of Test Ban Treaty by Pakistan. In August 2000, then Prime Minister of Japan, Mr. Yoshiro Mori visited Pakistan (from Aug 20-21) as part of his tour of South Asia. The Prime Minister called on Pakistani President and held wide range of talks of regional and international issues. The Japanese Prime Minister expressed the desire for resumption of full economic cooperation if Pakistan could sign the CTBT. In February 2001, Pakistan-Japan Business Forum was established to further enhance and give boost to existing economic and trade relations between two countries.
Pak-Japan relations remained dormant until slight tenderness when Pakistani President General Pervez Musharraf visited Japan in March 2002. President Musharraf emphasized during his visit to re-establish bilateral economic dialogue including discussion on the resumption of the yen loans. Then in January 2005, Pakistani Minister for Commerce, Economy, Trade & Industries visited Japan in January 2005. His visit managed to convince the Japan’s government to consider the resumption of suspended economic and trade relations.
The recent visit of Pakistani Foreign Minister Khurshid Kasuri to Japan and held talks with the Japanese leadership including Prime Minister Junichiro Koizumi and now the visit of Prime Minister Koizumi to Pakistan bring high level of hope the leadership of both the countries will reinstate and further enhance its mutual relations.
Pakistan enjoys cordial friendly relations with Japan. Both countries have always demonstrated mutual trust and propitious respect for each other’s concerns and interests. Pakistan and Japan share a centuries-old common heritage which invariably links the two countries in strong, historical bond of cultural cooperation. The rich archeological areas of Buddhist and Gandhara civilization in northern Pakistan are the major attraction for Japanese tourists.
Pakistan and Japan had established formal diplomatic relations on 28th April 1952. In 1957, Pakistan and Japan signed a Cultural Agreement in 1957 by which both countries exchange cultural troupes on a regular basis.
Japan is on the biggest trade-partners of Pakistan. Japan is one of leading trade partners of Pakistan being the largest investor (60% of total FDI) in Pakistan followed by USA (38%) and UK (23%). Major sectors of Japanese investment, based on the number of Pak-Japan joint venture projects are automobile (motorcycles and automobile related sectors), finance (Leasing, investment) and power (IPP). Japan is the largest donor of Pakistan providing commodity loans, grants and technical assistance. Through Aid-Pakistan Consortium launched in 1961, Japan has been extending Official Development Assistance (ODA) to Pakistan. Japan has been providing Yen loan assistance to Pakistan and the assistance was doubled following the Soviet invasion of Afghanistan until the imposition of sanction on Pakistan in 1998 when Pakistan exploded nuclear test.
At present, Pakistan-Japan bilateral trade is around US$ 1.5 billion, but it is well below the potential between both the countries.
The current visit of Prime Minister Koizumi is expected to have bilateral talks on the principle of mutual benefits and support on international level. Japan is expecting Pakistan’s support to Japan on Japan’s goal of a permanent seat in UN Security Council while Pakistan is looking for Japan to resume Yen Loans to Islamabad and establish more business agreements in private sectors as well as at government level. It is also expected that the leadership of both the countries will also discuss the security situation in South Asia, Pakistan growing friendly relations with India towards the solution of Kashmir and the upcoming parliamentary polls in Afghanistan where Japan is a major donor.