Pakistan and Japan entered progressive partnership soon after World War II which ended in 1945 with Japan having suffered a major setback to its economy while Pakistan had emerged as an independent nation in 1947. Diplomatic relations between the two were established in 1952 but the interaction had started much earlier. Japan is a major trading partner as well as a donor to Pakistan.
Japan has been a member of the Aid to Pakistan Consortium since 1961 and has been regularly assisting Pakistan with its development programs by providing financial support. Standing as the third largest economy of the world, Japan has a nominal GDP of over four trillion Dollars, while that of Pakistan nearly 400 Billion and growing.
The annual development assistance from Japan to Pakistan over the years has gradually increased and now averages at Dollars 600 Million which includes project loans for infra-structure development, outright grant assistance for the development of social sectors such as Health and Education and technical assistance for the promotion of expertise and technology transfer. Japan is amongst the top donors of bilateral assistance to Pakistan. Total assistance to Pakistan so far is well in excess of Dollars 12.00 billion and is funded through Japan International Cooperation Agency (JICA).
Japan has been in the forefront to assist Pakistan with its development needs; examples of which include, but not limited to, Ghazi Barotha Hydropower Project, Modernization of Daudkhel Fertilizer Plant, Indus Highway, Jamshoro Thermal Power Station, Kohat Tunnel and numerous other in the social sectors such as construction of children’s hospitals, providing equipment to basic health units throughout Pakistan, supporting technical and vocational education, improving supply of drinking water, helping improve environmental conditions and even modernizing safety measures at major airports and sea ports with state of the art screening equipment most of which are funded through outright grant-in-aid to Pakistan.
Karachi, historically being a commercial hub, Japanese entities were present even before Pakistan’s independence with the first Trading Company being established in 1918 and the first Japanese Bank in 1925. Karachi was amongst the five major cities frequented by Japanese businessmen and clubbed together with New York, London, Hong Kong and Singapore. Currently, there are over 80 Japanese Companies now operating in Pakistan providing employment to over ten thousand and helping the government exchequer annually with over 60 Billion Rupees in taxes. In the industrial sector, Japan leads the automotive sector with almost all known Japanese brands with their presence; the first amongst them to start in 1980. To protect such investment and to further promote it, an agreement was signed between the two governments in 2002.
Pakistan-Japan Business Forum (PJBF) is a Bi-Lateral forum established in 2001 with a view to promote trade and investments between the two friendly countries. To achieve this objective, the formation of its Board of Directors comprises of ten Directors each from Pakistan and from Japan elected for a period of 3 years. Currently, it is led by Murtaza Mandviwalla as its Chairman with Itaru Nakamura, the country General Manager of Marubeni Corporation as the Senior Vice Chairman representing the Japanese side. The Consul General of Japan in Karachi, Masaru Hattori is the Patron with the Ambassador of Japan in Islamabad, Shuichi Akamatsu, as the Patron-in-Chief. Amongst the various activities of the forum is holding of events and inviting decision makers in the government connected to business matters which include the Ministers, Secretaries as well as CEO’s of related organizations such as Trade Development Authority of Pakistan (TDAP), Board of Investment (BOI), Federal Board of Revenue (FBR) and the like. Members interact with them as it provides them with a platform to air their views and seek help on matters of interest to their businesses thereby directly bringing it to the knowledge of the concerned. Participation in exhibitions such as Expo Pakistan under Japanese Umbrella, arranging trainings both in Pakistan and in Japan on specialized subjects, managing and linking trade delegations to visit Japan and interact with their potential counterparts as well as liaising with Embassies in both countries to ensure the maximum utilization of their presence for the business community, are amongst the few initiatives that are undertaken by the Forum. The Board of Director of PJBF meet monthly to review progress in each sector it promotes. Recently, an Export to Japan Seminar was organized by PJBF in collaboration with JETRO, JICA, Embassy of Pakistan in Tokyo and for which the Japanese Ambassador in Islamabad specially travelled to Karachi to attend. Pakistan’s Ambassador in Tokyo joined online and addressed the gathering to impress upon the potential Pakistan holds for export of its products and services to Japan.
The counter part of PJBF in Japan is Japan-Pakistan Business Cooperation Committee (JPBCC) established in 1984 and which is currently headed by Akira Terakawa, the Chairman of Marubeni Corporation, and itself a conglomerate in Japan. Delegations between the two alternatively take place each year for what is called the “Joint Dialogue”. Meetings are arranged for Government to Government (G2G) negotiations as well as Business to Business (B2B) interaction. The last meeting was held in Islamabad in September 2022. Last August, the Pakistan Investment Seminar with the Board of Investment (BOI) and the Japan External Trade Organization (JETRO) was held in Tokyo. Federal Minister of BOI, Chaudhry and Murtaza Mandviwalla, Chairman of PJBF were in attendance. More than one hundred Japanese companies participated in the seminar.
Japan External Trade Organization (JETRO), operating under the Ministry of Economy, Trade and Industry (METI) of Japan was established in 1958. It opened its office in Karachi, the second overseas office anywhere in the world. In their published business directory of Japanese and Japanese Affiliated Companies in Pakistan, it mentions the names of almost 60 companies having either 100% ownerships or in Joint Venture with Pakistani companies. JETRO’s prime objective, as the name implies, is to promote trade activities and encourage investments between Pakistan and Japan. Almost 200 companies are listed who are actively involved in business with Japan. JETRO in Pakistan is headed by a Japanese and has now a new chief, Masatomo Itonaga, replacing Kazu Yamaguchi who just returned last year after a successful stay of nearly five years in Pakistan.
There are three Japanese Associations of Commerce and Industry (JACI) located in Karachi, Lahore and Islamabad. The purpose of JAIC is to meet regularly, exchange notes in respect of trade and investments and convey to both governments their observations regarding business matters that need their attention. Japan’s major imports from Pakistan include chemicals, yarn, textile products, leather and metals while Pakistan’s major imports from Japan include automobile and automobile parts, steel, rubber products as well as a variety of machinery and Hi-Tech items. Investments by Japanese Companies during the last decade is close to a Billion Dollar. The Japanese Companies operating in Pakistan are realizing a sales volume of over Rs.300 billion. Imports from Japan is close to 1.5 Billion Dollars while exports from Pakistan stand a little over 200 Million Dollars; thus, tilting the trade balance heavily in favour of Japan. Nearly 800 Japanese are resident all over Pakistan which include those from Japanese business houses, Government of Japan, JICA, JETRO and also NGO’s from Japan operating in Pakistan.
Pakistan Japan Dosti Zindabad!
The author is a founding member of Pakistan-Japan Business Forum and its former Chairman.
Copyright Business Recorder, 2025
Comments