ISLAMABAD, May 27: Japan has decided to resume its $500 million annual assistance from the next financial year to help Pakistan undertake mega development projects.

Informed sources told Dawn on Thursday that the Japanese assistance under the Yen Package Loan, suspended in 1998 after Pakistan conducted nuclear device, would be forthcoming from the next fiscal for infrastructure, road and communication projects.

In the wake of the devastating quake last year, Tokyo disbursed a $200 million grant to help survivors.

Japan expects that Pakistan will strengthen democratic dispensation by holding fair and free elections next year. Also, it believes that Pakistan will not achieve real progress unless it concentrated on the education sector. It stresses that Pakistan should allocate at least 4 per cent of its GDP on education.

According to sources, Japan has asked Pakistan to spend adequate funds on social sectors.

Initially, Tokyo has accepted Islamabad’s request to fund the Rs10 billion project for construction of about 3,000km of rural farm-to-market roads in selected districts in the four provinces.

The government of Japan will finance the project in two phases through Japan Bank of International Cooperation.

Japan believes that lack of adequate and dependable communication infrastructure has proved to be the biggest constraint in achieving the desired gaols of development in the country.

“Without such an infrastructure, development cannot proceed in any of the socio-economic sectors in rural areas,” says a source.