September 29, 2003	Monday	Sha’aban 2, 1424

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ISLAMABAD, Sept 28: The Japanese government has withheld the Saarc-Japan Special Fund this year citing non-utilization of the money as the reason, Dawn has learnt through well-placed diplomatic sources.

In an initiative to strengthen the Saarc (South Asian Association for Regional Cooperation) process the Japanese government established the Saarc-Japan Special Fund in 1993.

The Fund comprised two components. One, to be used to finance selected programmes and activities identified and managed by member states and the other for the programmes and activities identified by the government of Japan.

The fate of the Special Fund would be determined after consultations between the Japanese government and the Saarc secretariat.

“The Saarc secretary-general was given the mandate at the Special Session of the Standing Committee in Kathmandu in July this year to go to Tokyo for consultations,” a senior diplomat told Dawn here. However, he said, the consultation process had not yet started.

There was no comment available on the development from the Japanese embassy in Islamabad. When Dawn contacted the embassy officials last week, they were not forthcoming. Without denying or confirming suspension of the Saarc-Japan Special Fund, officials in the political section said they would have to get the brief from Tokyo which would take some time.

Japan has shown keenness for a berth in Saarc and it has been engaged in “quiet diplomacy” to garner support from member states.

While all the Saarc countries have reportedly been receptive to the idea of Japan joining the regional grouping, India has resisted it.

“India’s concern is that Japan’s entry into the Saarc system would hurt its economic interest and reduce its importance in the region,” is how one diplomat interpreted it.

Observers also attribute suspension of the Fund to Japan’s disenchantment with the derailing of the Saarc process and India’s opposition to Japan joining the system, as a member or as an observer.

Saarc groups seven countries of South Asia. These are: Bhutan, Bangladesh, India, Pakistan, Nepal, the Maldives and Sri Lanka.