KARACHI, March 5: Japan is reviving its official economic ties with Pakistan as a 30-member delegation --officials and businessmen--visits Karachi and Islamabad from Monday and meet President , Prime Minister, several ministers and hold discussions on specific business and economic cooperation.

The economic ties are being revived after seven years' suspension following Pakistan's nuclear explosion in 1998. Japan maintained business relations but cut off official development assistance which is now being resumed with an expected inflow of $170 million.

The areas where Japanese assistance is being explored are infrastructure development, vitalization of Karachi development programme, acceleration of work on textile city initiated by Pakistan-Japan Business Council and JETRO jointly.

According to business sources the Japanese team is being led by Parliamentary Secretary Mr Akihiko Yamamoto and includes the Chairman of Japan-Pakistan Business Cooperation Committee Mr Tohru Tsuji. The delegation includes officials of Japanese ministry of trade and industry, JETRO and JBIC and also businessmen from giant business corporations.

On Monday the delegation is holding a joint business meeting with Pakistani members of the Japan Pakistan Business Council. The expected speakers are the Governor of the State Bank Dr Ishrat Hussain, Communications Minister Shamim Siddiqui and Japanese Ambassador in Pakistan Mr Nobuki Tanaka.

Mr Farrukh Sheikh, Chairman of Pakistan-Japan Business Council in Pakistan will join the Japanese delegation to Islamabad where it is expected to meet President General Pervez Musharraf on Tuesday and Prime Minister Shaukat Aziz on Thursday.

Besides meeting with the Commerce Minister Humayun Akhtar, Industries and Production Minister Jehangir Tareen and State Minister for Privatisation Umer Ghumman, the Japanese delegation is holding an extensive and in- depth Government-Government-Private sector consultation on Wednesday to discuss a heavy agenda that would focus on Pakistan's infrastructure development.

The Japanese and Pakistani officials and the businessmen will discuss how to motivate Japanese investment in Pakistan in textile, automobile, chemical, pharmaceutical, telecommunications and energy.

The meeting will explore measures for enhancement of bilateral trade that amounts to about $1.8 billion. The meeting will discuss capacity building of Pakistani manufacture through human resource development and technical training.

Pakistan's Foreign Minister Mr Khusrhid Kasuri is reported to have given several specific proposals for Japanese assistance in Pakistan during his official visit to Tokyo last month during which he met ministers, political leaders and officials.

Sources expect resumption of official assistance from Japan with a loan of $170 million for construction of a barrage at Khanki and up-gradation of power distribution system at National Power Control Centre (NPCC). Japan is set to have three conditions for resumption of official assistance. These are ensuring human security and development, building up of a sound market economy and achievement of a balanced socio-economic growth.

Before suspension of official assistance in 1998, Japan has been one of the main countries that offered grant assistance to Pakistan in many areas. Japan's total private investment remains mainly in automobiles which has been the top profit making sector and got all tariff protection from the government.

Pakistan maintains a perpetual deficit trade relationship with Japan and has suffered more than $2.20 billion loss in last three years. About seven years ago there were 45 Japanese companies mostly trading houses in Pakistan. The numbers of these companies are said to have come down. But with resumption of official assistance, the private sector relationship in trade and industry is expected to pick up and many new Japanese companies are expected to open their offices in coming months.