The president of the Japanese Association of Commerce and Industry (JACI) in Pakistan, Hyashi Otani said at a press conference on April 23 that his association strongly favoured fixed capital investment in Pakistan by Japanese industrialists, besides full-scale resumption of economic assistance from the Japanese government to Pakistan, including the revival of yen credit.
The JACI is the representative body of 29 Japanese companies operating in Pakistan, out of which seventeen are based in Karachi, six in Lahore and six in Islamabad.
The association held its 25th annual general meeting in Karachi the other day after which the newly elected president addressed a press conference.
He disclosed that a powerful delegation of Japanese businessmen and investors would be shortly visiting Pakistan under the leadership of Toru Tsuji of Marubeni Corporation, who has been recently elected as the Chairman of Pakistan-Japan Business Co-ordination Committee in Tokyo.
The delegation is expected to explore avenues to establish feasible industrial projects of a wide range with direct Japanese investment.
According to the JACI president, the economic policies consistently followed by the Pakistan government under the dynamic leadership of General Pervez Musharraf over the past four years have successfully led Pakistan towards a strong tempo of economic growth as could be noted from major economic indicators.
He specially referred to Pakistan's bold decision to join the coalition under the leadership of the US government after the events of September 11, 2001, to fight against international terrorism.
In this context he announced the resolve of the Japanese private sector to extend full support to Pakistan's development efforts and thereby to effectively assist in the programme for poverty reduction.
The resolutions passed by JACI at its annual general meeting included a strong plea to the Japanese government to fully revive its official assistance including yen credit to Pakistan at the same level as it was before suspension following Pakistan's nuclear test explosions on 29th May 1998.
Another resolution advised the Japanese corporate sector to make investment in Pakistan in development projects and thereby make a contribution to dissemination of Japanese technical know-how besides expansion in bilateral trade between the two countries.
It is reassuring to note that Japan's leading business firms which had so far seemingly restricted their sales of Japanese goods specially plant and machinery in Pakistan, have now come out with a firm decision to actively participate in the country's industrial development along with transfer of technology.
It is however yet to be seen how soon private capital flows from Japan would pick up momentum. For this purpose, the Japanese investors would have to come up with concrete proposals along with estimates of capital outlets, sources of financing, etc.
As is well known, Japanese investment in Pakistan is largely confined to automobile industries in which the beginning was made with the assembly of imported CKD units.
At the present moment, the deletion level in most of these plants is hardly more than 50 percent and the goal of 100 percent manufacture remains far from the reach.
Thus one may expect an end to the long spell of reservations on the part of Japanese corporate sector about investing in Pakistan in a diversified range of industrial projects.
It was also pointed out by the JACI president in his press conference that a number of Japanese companies were still maintaining a negative attitude in so far as investment in Pakistan is concerned and therefore a consensus among a majority of Japanese corporate sector leaders is yet to emerge on the issue of capital investment.
Moreover, it is common knowledge that the Japanese corporate sector's life style requires a comfortable social atmosphere in a foreign country where they decide to make large-scale fixed capital investment.
Such an atmosphere is available to them in most of the South East Asian countries. As to whether they will be satisfied with the social conditions in Pakistan, is anybody's guess.
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