ISLAMABAD, Aug 12: Japan is likely to resume its $500 million annual assistance to Pakistan during the current calender year especially to help reduce the wide spread poverty and create new job opportunities across the country.

Diplomatic sources told Dawn here on Thursday that Japan intends to resume its financial assistance under the 32nd Yen Package Loan during 2004. Most of the funding under the 31st Yen Package Loan was offered to Pakistan before Tokyo suspended its assistance following nuclear tests conducted by the then government of Nawaz Sharif in 1998.

Sources said that Y7.2 billion yen were disbursed to Pakistan for the Kohat Tunnel despite the suspension of Official Development Assistance (ODA). However, they said it was little unclear whether the resumption of aid would be under 32nd or 33rd Yen Package Loan because of extending one time funding for Kohat Tunnel.

The decision to resume the country's assistance by Japan was taken after having received a number of formal requests from Pakistan recently. Sources said that Japan has also agreed to ask its investors to increase their investment in Pakistan.

The issue was reportedly discussed during President Gen. Pervez Musharraf's meeting with Japanese Foreign Minister Ms. Yoriko Kawaguchi on Wednesday. The president said Pakistan needed foreign investment specially from Japan to alleviate poverty through the setting up of new industries in various fields including oil and gas, telecommunication, infrastructure development, Information Technology (IT) and housing & construction.

Sources said that the Japanese foreign minister assured the president that two investors' delegations would shortly be visiting Pakistan to explore the opportunities for making new investment.

Unlike the United States and the western countries, Japan has not been issuing negative travel advisories for its citizen to visit Pakistan. However, it has been cautioning them by saying that they should visit Pakistan on their own risk.

"This caution was only for tourists but investors were never asked anything on this behalf", a source said adding that the Japanese government would now encourage its investors and tourists to visit Pakistan.