Study Reports

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Pakistan has long been in the doldrums, without being able to overcome structural problems due mainly to frequent regime changes and incoherent policies. The nuclear testing that Pakistan conducted in 1998 prompted the country's isolation from the international community and leading to a long-lasting economic crisis. President Pervez Musharraf, who took power through a military coup in 1999, mended the country's relations with the international community with a policy change toward the Taliban in Afghanistan and a commitment to work with other countries in combating terrorism in the aftermath of the terrorist attacks in the United States. The new government has shown enthusiasm in restoring law and order and national pride by launching reforms of various kinds. By 2003, the rapid recovery of macroeconomic fundamentals is witnessed. The latest view of Pakistan's macroeconomic performance shows strong recovery from the prolonged stagnation of the 1990s. However, the sustainability of the current rapid recovery process is still unknown given the fact that Pakistan experienced the V-shaped economic recovery twice in the past regimes. The present government still faces many challenges including rampant terrorism, high poverty rate, Kashimir conflict with India and contraband traffic form Afghanistan

Japan has been proactive in extending assistance to Pakistan, taking into consideration two major factors: the important socioeconomic role that the country plays in Southwest Asia and the Islamic countries; and high development demand in Pakistan (the country is committed to development and reform in the face of many socioeconomic problems at home). To promote the stability of Pakistan and support the country's commitment to antiterrorism, in 2001 Japan lifted the economic sanctions that it had imposed following the 1998 nuclear testing and provided $4.7 billion in emergency economic aid, as well as $300 million in grant aid over the last two years.

With recent changes and developments in and around Pakistan, together with ongoing discussion of effectiveness of the use of ODA in Japan, the need for re-identifying direction of development in Pakistan and Japan's ODA to the country emerged. JICA set up the study committee on Japan's ODA to Pakistan in November 2001 following the first and second committees in 1991 and 1996. The third study committee was established to accomplish two major goals. One was to get to the bottom of the challenges facing Pakistan from a socio - structural perspective, while paying attention to new developments in and around the country so that analyses of sustainability of present economic recovery and development process become possible. The other was to explore both desirable directions for the development of Pakistan and the optimal approach for Japan's ODA to the country from the medium- and long-term perspectives based on the factors and paths to make present development sustainable.

The report in English is a Summary Discussion of the main report. The full report is provided only in Japanese.