October 27, 2001	Saturday	Shaba'an 9, 1422

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TOKYO, Oct 26: Japan said on Friday it would suspend sanctions on Pakistan and India, clearing the way for fresh economic aid in a show of support for the two nations during US-led strikes on Afghanistan.

“We have decided to suspend the economic measures we took against India and Pakistan,” Chief Cabinet Secretary Yasuo Fukuda said in a statement.

Japan froze all new loans and grants except for humanitarian aid after India and Pakistan carried out tit-for-tat nuclear tests in May 1998.

While stopping short of announcing fresh aid, Fukuda said Tokyo would discuss specific economic steps later to help ensure political and economic stability in the two south Asian countries.

Fukuda stressed that Pakistan and India had stuck to the self-imposed unilateral moratoriums on nuclear testing declared shortly after the test blasts.

He said Japan may consider reinstating the sanctions in the future if the nuclear non-proliferation situation worsens.

Japanese officials said they wanted to call the lifting of the sanctions a “suspension” to leave the way open for Japan to revive the punitive steps in the event that Pakistan and India scrap their moratorium.

Some politicians in the dominant Liberal Democratic Party are opposed to lifting the sanctions, saying this would run counter to Japan’s policy of seeking nuclear non-proliferation.

“Japan, the only country in the world to have suffered atomic bombings, has an especially strong feeling about nuclear non-proliferation,” a senior Japanese Foreign Ministry official said.

STABILITY THROUGH ECONOMIC AID: Following Islamabad’s decision to support the US-led coalition’s campaign against terrorism, Tokyo pledged to give $40 million in assistance to Pakistan.

Japan has also said it would reschedule some 64.6 billion yen ($525.7 million) of Pakistan’s debt.

“Japan can play a significant role in ensuring economic and political stability for Pakistan and India, neighbouring Afghanistan,” the Foreign Ministry official said.

The United States, for its part, has given Pakistan $100 million in aid and rescheduled $379 million of debt.

The House of Representatives last week also gave its final approval to authorise the waiver of sanctions for two years.

Pakistan has said the crisis may cost it up to $2.5 billion, and officials have held talks with the United States and other donors on possible debt relief and fiscal support.

In telephone talks last week, President General Pervez Musharraf asked Japanese Prime Minister Junichiro Koizumi to review the sanctions as well as cancel $5 billion in debt.

Although it was Japan’s basic policy not to write off such debts, Deputy Chief Cabinet Secretary Shinzo Abe said Tokyo would take into account Pakistan’s views before making a final decision.

Finance Minister Shaukat Aziz was expected to make a four-day visit to Tokyo from Wednesday to discuss the issues with Japanese officials including Koizumi, Abe told reporters.

As of the end of March, the Japan Bank for International Cooperation had outstanding debt exposure of 570 billion yen to Pakistan.—Reuters