Japan has urged Pakistan to address a range of critical issues, including the safety of personnel working on Official Development Assistance (ODA) projects and resolving import restrictions affecting Japanese automobile manufacturers. These concerns were raised during the 8th Japan-Pakistan High-Level Economic Dialogue (JPHLEPD) in Tokyo, according to sources familiar with the talks.
Japan’s Key Concerns
Through non-papers presented by its embassy’s Economic Section in Islamabad, Japan called for Pakistan to fulfill its obligations under the International Monetary Fund (IMF) program. Japanese officials emphasized the need to streamline tax and customs exemption procedures, which they believe are hindered by a lack of understanding of international agreements.
The Japanese delegation presented the following key demands:
- Ensure the safety of ODA personnel and the proper maintenance of facilities and equipment at ODA project sites.
- Provide clear procedures for service tax exemptions and improve communication with provincial governments regarding technical cooperation projects.
- Address delays in domestic processes, such as PC-1 approvals and banking arrangements, to speed up ODA project timelines.
- Eliminate the minimum tax in Special Economic Zones (SEZs) and resolve issues related to advance income tax payments for imports into SEZs.
- Simplify the visa process for Japanese businesspeople.
- Promote the establishment of essential industrial infrastructure, including SEZs, and resolve remaining import restrictions on automobile manufacturers.
- Japanese officials also noted the progress in lifting the ban on Chinese salt or monosodium glutamate (MSG), a significant import issue.
Pakistan’s Requests
Pakistan raised several priorities during the dialogue, including calls for increased economic cooperation and support from Japan:
- Reinitiate yen-loan projects and improve information-sharing mechanisms to facilitate their approval.
- Accelerate decision-making processes for Japanese contractors involved in ODA projects.
- Increase exports to Japan, especially mango varieties and textiles, and establish a Joint Working Group between the Japan External Trade Organization (JETRO) and Pakistan’s Trade Development Authority (TDAP) for trade promotion.
- Expand the Japan Development Scholarship (JDS) program to benefit more Pakistani recipients.
Both sides discussed strengthening existing bilateral frameworks, such as the Japan-Pakistan Public-Private Joint Economic Dialogue and the Joint Trade Commission. The Japanese Embassy committed to addressing the concerns presented in the non-papers, rather than revisiting previous agreements.
The dialogue highlighted Japan’s continued support for Pakistan’s economic development, emphasizing the need to address mutual concerns. By improving project implementation, trade, and investment opportunities, this collaboration could enhance economic ties and deliver long-term benefits to both nations.
