ALLAMA I.I.QAZI CAMPUS JAMSHORO Ph.D Thesis Pakistan-Japan Political and Economic Relations in Post Cold War Era: Challenges & Responses KHALIL-UR-RAHMAN SHAIKH A THESIS SUBMITTED TOWARDS THE PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF DOCTOR OF PHILOSOPHY DEGREE IN POLITICAL SCIENCE OF THE UNIVERSITY OF SINDH AREA STUDY CENTER FOR FAR EAST AND SOUTH EAST ASIA UNIVERSITY OF SINDH, JAMSHORO PAKISTAN SEPTEMBER 2011 AREA STUDY CENTER FOR FAR EAST AND SOUTH EAST ASIA, UNIVERSITY OF SINDH, JAMSHORO, PAKISTAN CERTIFICATE This is to certify that Mr.Khalil-ur-Rahman Shaikh S/O Muhamamd Bux Shaikh has carried out his research work on the topic entitled as “Pakistan-Japan Political and Economic Relations in Post Cold War Era: Challenges & Responses” under my supervision. His research work is original, distinct and his thesis is worthy of presentation to the University of Sindh for award of Degree of Doctor of Philosophy in Political Science. Professor Dr.Lutufullah Mangi Supervisor Department of International Relations University of Sindh ACKNOWLEDGEMENT In the beginning I would like to say thanks to my supervisor Dr. Lutfullah Mangi for his advice, guidance and cooperation. In spite of busy schedule, he dedicated time to read draft several times and improved it. I would also like to pay my deepest sense of gratitude to Japan Foundation for granting me short fellowship which enabled me to visit Japan and conduct interviews of diplomats, professors and other persons directly or indirectly related to Pakistan-Japan relations. During my stay in Japan I also visited various universities and libraries to collect the valuable material. The research conducted in Japan has certainly enriched my thesis and made it of international level. In the last let me pay thanks to Mr. Noor Muhammad Jadmani, ambassador of Pakistan in Japan for his support and cooperation during my stay in Japan. His guidance enabled me to meet the former ambassadors of Japan in Pakistan and Japanese Professors. I Abstract The post cold war era (1991 onwards) did not much influence the relations between Pakistan and Japan. However, nuclear explosions undertaken by two major countries of South Asia in May 1998 strained relations between Japan and Pakistan. The former imposed economic sanctions against India and Pakistan and severely condemned nuclear proliferation in the region however 9/11 incident and self moratorium by Pakistan compelled Japan to lift the sanctions. Japan held the problem of Kashmir as the main cause of tension between the two rival countries and offered to hold international conference. The nuclear tests undertaken by India and Pakistan increased fear of Japan for likely breaking of nuclear war between the two countries. It held that problem of Kashmir is behind the nuclear tests.1 Pakistan has been receiving bilateral and multilateral aid from Japan. Latter has been extending Official Development Assistance to Pakistan since 1960. It was extended due to Pakistan’s political role in South West Asia, Islamic countries and maintenance of its traditional relations with Japan and its geo-strategic position. Pakistan is the beneficiary of General System Preferences (GSP) introduced by Japan. Although GSP is meant to encourage the imports but its conditions are strict on the commodities in which developing countries have competitive edge for example, textile and footwear but conditions are most lenient for the products in which developing countries are less competitive, such as machinery which limits 1 June 4, 1999, Associated Press of Pakistan.. II the significance of the GSP scheme. Thus, Pakistan could not take much benefit from the scheme as it ultimately contributed to Japan. The cordial and warm relationship between Pakistan and Japan got new impetus when both joined U.S-led coalition on war on terror. Though, there were exclusive reasons which motivated both the countries to join the coalition but common factors also contributed in this regard. Emergence of new convergence in relations between Pakistan and Japan benefited the former. Latter withdrew its economic sanctions against Pakistan imposed in view of atomic explosions in May 1998, restored Official Development Assistance and rescheduled its loan. The immediate objectives of war on terror were to uproot hide outs of Al- Qaeda and install democratic government in Afghanistan where as long term objectives are to destroy terrorist organizations of global reach and their networks including finances. The coalition on war on terror will have to go for indefinite period to combat terrorism. Thus, being partners of the coalition, Pakistan and Japan should evolve mutual long term strategy. Moreover, both the countries should develop common policy outside the coalition which must go beyond the status of Pakistan as a front line state. Japan is pursuing India and Pakistan to sign the NPT and the CTBT. Both the countries have not turned down Japan’s urge of signing of CTBT in clear terms. Pakistan should see its interest beyond India and link it with the United States. Signing the CTBT by India cannot extend defense shield to Pakistan as it III has received threats from terrorists and sympathizers of India. Pakistan wants to maintain minimum defense capability. Moreover, India has developed nuclear arsenals and Pakistan considers it as a threat to its very existence. Compelling by the situation, it had to go for option of acquiring nuclear technology and developing atomic bomb. Japan is not in a position to pressurize India to such an extent that it may bow down to Japanese demand and sign NPT and CTBT. Moreover, it also seems impossible that Pakistan will accept Japanese pressure in this regard. However, it may be concluded that irritants like NPT and CTBT will not much influence Pakistan and Japan relations and political and economic ties between the two countries will grow stronger day- by- day. IV CONTENTS Acknowledgement I Abstract II Contents V ABBREVIATIONS X LIST OF TABLES XIII Chapter.1 Introduction 1 1.1 Introduction to Pakistan Japan Relations 1 1.2 Justification of the Study 4 1.3 Research Methodology 6 1.3.1 Conceptual Framework 6 1.3.2 Objectives of the Study 12 1.3.3 Hypotheses 12 1.4 Organization of the Thesis 13 Chapter 2 Pakistan & Japan Political Relations (Since 1990) 19 2.1 Historical Background 19 2.2 Relations after 9/11 22 2.3 Pakistan-Japan Relations & U.S Factor 24 2.4 Foundations of the Bilateral Relations 26 2.5 Geo- Strategic Importance of Pakistan 28 2.6 Foreign Policy 35 2.7 People -to -People Contact 39 V 2.8 Security Dialogue 47 2.9 Democracy in Pakistan 51 Chapter. 3 Pakistan Nuclear Program and Japan 55 3.1 Pakistan’s Nuclear Program 59 3.2 Security of Pakistan’s Nuclear Program 65 3.3 Japan’s Nuclear Program 67 3.4 Japan’s Reaction on Pakistan’s Nuclear Tests 70 3.4.1 Reaction from Japanese People 71 3.4.2 Reaction from Government of Japan 71 3.4.3 Pakistan- North Korea Nuclear Connection: Japan’s Reaction 75` 3.5 Proliferation is not Restricted to Pakistan 86 3.6 Nuclear Issue as Divergence Between Pakistan and Japan 88 3.7 Kashmir and Nuclear Issue 89 3.8 Current Status on Nuclear Proliferation 90 Chapter. 4 Economic Ties Between Japan and Pakistan 92 4.1 Background of Economic Relations 92 4.2 Economic Interests of Japan in Pakistan 97 4.3 Economic Relations after 1991 99 4.4 Reasons of Decline of Pakistan Export to Japan 103 4.4.1 Quota System 103 4.4.2 Lack of R&D 103 4.4.3 Un- competitive 103 4.4.4 Anti Dumping Duties 104 4.4.5 Japanese Diplomacy to Increase Demand of its Products 104 4.4.6 Distance 104 4.4.7 Competition 104 4.4.8 Posting of Staff in Source 105 4.4.9 Uneasiness of Pakistani Exports 105 4.4.10 Language Barrier 105 VI 4.4.11 Convincing Retailer Instead of Wholesaler 105 4.4.12 Improvement of Living Standard of Japanese 106 4.4.13 Lack of Quality Consciousness 106 4.4.14 Lack of Government Support 106 4.4.15 Narrow Base of Exports 106 4.5 Development of Karachi 107 4.5.1 Establishment of Economic Zone in Karachi 109 4.6 Trade between Pakistan and Japan 112 4.7 Aid by Japan 117 4.7.1 Economic Aid 117 4.7.2 General System of Preferences 127 4.7.3 Official Development Assistance 128 4.7.4 Aid Through Consortium 133 4.7.5 Japan’s contribution to Five Year Plans of Pakistan 135 4.8 Investment by Japan 136 4.9 Remittances by Pakistanis Living in Japan 143 Chapter. 5 Japan and Kashmir Problem 146 5.1 Location of Japan and Kashmir 148 5.2 Importance of Kashmir for Pakistan 147 5.3 Indian View on Kashmir 150 5.3.1 Peace Process 152 5.4 Japan and Problem of Kashmir 154 5.4.1 Japan- India and Kashmir Problem 158 5.4.2 Japan’s Kashmir Policy after cold war 161 5.4.3 Japan’s Kashmir Policy after 9/11 163 5.5 Japanese People and Kashmir Problem 165 5.6 Human Rights in Kashmir and Japan 166 5.6.1 Reasons Behind Japan’s Policy Violation of Human Rights 170 5.7 Solution of the Problem of Kashmir 173 5.8 Japan as Mediator 178 Chapter. 6 Terrorism and Pakistan-Japan Relations 184 VII 6.1 Cooperation Between Pakistan and Taliban Government of 185 Pakistan Afghanistan 6.2 Incident of 9/11 186 6.3 Japan’s Support to the U.S 186 6.4 Change in Japan’s Pacifist Policy 188 6.5 Emergent of Terrorist Movement 191 6.6 Relations of Pakistan and Japan Before 9/11 191 6.7 Similarities in Terrorist Attacks on Pakistan & Japan 192 6.7.1 Pro Communist Factor 192 6.7.2 Support to Palestine Cause 193 6.7.3 Targeting Common People 194 6.7.4 Highjacking of Airlines 194 6.7.5 Targeting Alien Interests at Home 195 6.7.6 Attacks on Government Functionaries 196 6.8 Japan Joins