ISLAMABAD, Oct 29: Finance Minister Shaukat Aziz left for Tokyo on Monday as the special envoy for President Pervez Musharraf for seeking major debt relief from the Japanese government.

According to official sources, the finance minister, who left via Beijing, will deliver President Musharraf’s letter to the Japanese prime minister seeking generous financial support for improving the economy of the country.

The resumption of $400 million to $500 million annual assistance and getting certain debt relief, including debt write-off, is on the agenda of the talks. Pakistan has already called for a major debt write-off from Japan.

Although Japan initially regretted that it could not write any debt off due to legal and constitutional hitch, sources said the finance minister would raise the issue by saying that similar arrangements were also likely to be made by the United States and some European countries.

Sources said that the US government had conveyed to the Musharraf government that a bigger economic package was being finalised, including possible loan write off or a swap to convert the loans into social sector funding.

A source close to the Japanese embassy, when contacted, said that road was now open for resuming Official Development Assistance (ODA) for Pakistan. He said that Japan wanted to know the “immediate needs” of the government to offer any support.

Mr Aziz will brief the Japanese prime minister and other officials about the state of the economy, with special reference to Sept 11 terror attack on America that also created serious economic difficulties for Pakistan.

So far the US-led coalition has committed $800 million cash grant, including $600 million by the US.

However, according to the finance minister, nothing has reached in the kitty. In addition, $600 million ($320 million by the US) had been offered for internally displaced persons (IDPs) in Afghanistan, but nothing for the 2.5 million Afghan refugees living in Pakistan for the last many years.

The European Union has offered some market access to Pakistan’s textile sector by lowering its 10 per cent tariff which will help earn an additional $400 million during the financial year.

As far as Japan is concerned, it has emerged as the largest donor to Pakistan, as it disbursed $495 million in 1998, despite sanctions Tokyo had imposed on Islamabad following the May 28, 1998, nuclear tests.

However, Japan continued to extend assistance for the ongoing projects, such as OECF yen loans, grant aid and technical cooperation.

In 1998, the net disbursement of Japanese assistance amounting to $495 million included $424 million in yen loans, $56.65 million as grant aid and $13.94 million as technical cooperation.