Japan Gears Up For Pakistan Talks

Amidst power shortages, political instability and an upsurge in violence, Pakistan’s economic growth has slowed down considerably. The gap between exports and imports led to a serious balance of payments crisis last year. There were concerns that Pakistan might be on the verge of bankruptcy. In November, the International Monetary Fund bridged the worst impasse with a loan of 7.6 billion US dollars to be given over two years.

But more money is needed. Looking beyond the current financial crunch, the US Asia Society think tank claimed in a recent report that Pakistan would need up to 50 billion US dollars in the coming five years to avoid an economic meltdown that could have disastrous political consequences.

But political analyst Hasan Askari Rizvi from Lahore thinks that -- given the effects of the global financial crisis on the donor nations themselves -- it is unlikely that the Pakistani government will get such a large-scale pledge in Tokyo: “I think if they can get a commitment of six to seven billion in the next two or three years, that should provide them enough at least to revive the economy.”

The Japanese prime minister indicated on Thursday that Japan might be willing to support Pakistan with up to one billion dollars.

Aid will have strings attached

Whatever the final outcome, economic issues will certainly be closely linked to politics in Tokyo. The Obama administration in the US says that any further aid for Pakistan will definitely come with strings attached.

“Benchmarks” are the key word in the debate: The Americans want to monitor progress in fighting militancy before continuing aid.

The controversial decision by Pakistan’s National Assembly on Monday to introduce Shariah law in large parts of the country’s northwest will also certainly be discussed on Friday. Critics both in Pakistan and abroad regard it as a surrender to militant extremists.

“I think the West will wait for a couple of months to see in what direction things are going,” predicts Hasan Askari Rizvi. “If the drift towards uncertainty, towards militancy, continues, then definitely their concern will increase.”

“As far as assistance is concerned, they are not going to give it all in one go. It will be provided to Pakistan over time. Even if there are no benchmarks, they will closely monitor what’s happening in Pakistan. And they can refuse to supply aid if they come to the conclusion that things have slipped out of control.”

Reintegration of Iran

Iran will also be on the agenda in Tokyo, with the conferences providing yet another chance for informal interaction between Tehran and Washington -- another sign that Iran is becoming reintegrated into the international community.

Iran has been helping Pakistan by providing oil against deferred payments. But its real goal in Tokyo might be to lobby for another project and make a gesture to Pakistan, says Rizvi: “Iran’s main interest is that the gas pipeline from Iran to Pakistan, and ultimately to India, is approved.”

These plans are not new; but the previous US administration repeatedly put pressure on India and Pakistan to shelve the Iran pipeline plans.