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| Japan initiated its economic assistance towards Pakistan with provision of technical assistance in 1954; loan aid in 1961 and grant aid in 1970, which has continuously played an important role in country's development. The accumulated total of Japan’s economic assistance to Pakistan was US$ 5,237.30 million until CY 2005 on disbursement basis. (Technical Assistance: $ 329.97 million, Loan Aid: $ 3,636.47 million, Grant Aid: $ 1,270.86 million). | ||||||||
| In response to the nuclear tests conducted by Pakistan in May 1998, economic measures were imposed and then loan and grant aid to new projects was suspended. However, the Government of Japan continued to provide grant assistance on emergency and humanitarian basis and grant assistance for grassroots projects, technical cooperation and loan aid to ongoing projects. | ||||||||
| After the simultaneous terrorist attacks of September 11, 2001, recognizing Pakistan’s efforts to contribute to strengthening the international coalition against terrorism, and in view of Pakistan’s difficult domestic situation, Japan decided to discontinue the economic measures imposed in May 1998 and an announcement to this decision was made on 26th October 2001. Subsequently, Japan pledged a grant of US$ 300 million on November 2001 that has not only been disbursed but also reached US$ 30 million over and above the commitment by April 30, 2005. Japan also rescheduled debt worth US$ 4.5 billion in March 2003 in pursuance of agreed minutes of the Paris Club. Moreover, the Japanese Prime Minister has recently announced the resumption of Yen Loan programme to Pakistan to enhance country’s capacity to undertake large-scale infrastructure development projects. | ||||||||
The Government of Japan provides ODA based on requests made by the Government of the Islamic Republic of Pakistan, which is classified, into following three types:
Loan Aid is extended on “soft” terms, characterized by a low interest rate and a long maturity. ODA-Loans have been extended towards basic economic and social infrastructure projects that provide indispensable underpinning for Pakistan's national development. The Yen- Loans thereby support poverty reduction through “economic growth” and “capacity-and institution-building”. Japan Bank for International Cooperation (JBIC) is an official agency with a statutory mandate to provide Japan's Yen-loans.
Grant Aid is bilateral cooperation extended to support development projects and social sector activities in various sectors, including health, education etc. with an aim to benefit basic human needs. Substantial grant aid is also extended in the form of budgetary support. Grant Assistance for Grassroots Human Security Projects (GGP) is another important component of grant aid through which flexible and timely support is provided to non-profit organizations for small-scale social sector development projects all over Pakistan.
Technical Cooperation contributes directly to the human-resource development through the transfer of technology. The areas covered by technical cooperation are diversified and include such sectors as agriculture, education, health, industry, infrastructure and environment. Some of the ongoing activities are dispatch of Japanese Experts, Senior Volunteers (SV), Japan Overseas Cooperation Volunteers (JOCV) in various fields and so on. Japan International Cooperation Agency (JICA) is an official agency with a statutory mandate to implement the technical cooperation.