Non-project Grant Aid to Pakistan

October 5, 2001

  1. The Government of Japan decided to extend a non-project grant aid of 3 billion yen to the Islamic Republic of Pakistan. Notes to this effect were exchanged on October 5 (Fri) in Islamabad between Mr. Sadaaki Numata, Japanese Ambassador to Pakistan, and Mr. Nawid Ahsan, Secretary, Ministry of Finance and Economic Affairs Division of Pakistan.

  2. The aid will be provided as part of the "Emergency Economic Assistance for Pakistan" (approximately 4.7 billion yen in total) announced by the Government of Japan on September 21. This emergency assistance is one item of "Japan's Measures in Response to the Terrorist Attacks in the United States".

  3. After Pakistan conducted nuclear tests in May 1998, the International Monetary Fund (IMF) and other international financial institutions suspended loans to Pakistan and major donor countries took measures that included the suspension of assistance for the country. As a result, Pakistan's economy was in a critical situation. In November last year Pakistan's economic situation has been relieved because IMF approved a loan to support the country's international balance of payments. Nevertheless, Pakistan is still faced with chronic economic difficulties.

  4. The recent terrorist attacks in the U.S. has forced massive numbers of Afghan refugees to pour into Pakistan, putting an increased financial burden upon Pakistan. Meanwhile the decline of economic activities in the country is unavoidable due to the deterioration in security and other factors, and the country's economy is expected to face an extremely severe situation. Taking these factors into consideration and in response to a request from the Government of Pakistan, the Government of Japan has decided to extend 3 billion yen, out of a bilateral aid of 4.7 billion for Pakistan that it announced on September 21, to purchase materials necessary to promote efforts to improve the country's economic structure and to relieve its economic difficulties.

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