nuclear tests in May 1998, despite strong pleas to refrain from carrying out such tests from Japan and the international community. The Japanese Government responded by strongly protesting to the Pakistan Government for conducting these tests and once again strongly urged Pakistan to sign the NPT (Treaty on the Non-Proliferation of Nuclear Weapons) and CTBT (Comprehensive Nuclear-Test-Ban Treaty) as soon as possible. Japan simultaneously imposed economic measures on Pakistan based on the Principles of ODA Implementation in the ODA Charter which included the suspension of new Yen loans and grant aid with the exception of emergency and humanitarian assistance and Grant Assistance for Grassroots Projects. The Japanese Government has since made it a point to seize every possible opportunity to urge the Pakistan Government to take specific measures for nonproliferation and, most importantly, to sign the NPT and CTBT.

The terrorist attacks on the U.S. in September 2001, however consequently triggered an influx of Afghanistan refugees to Pakistan, worsened public security in Pakistan as well as inflicting other negative effects. This resulted in severely deteriorating the Pakistan economy, and in light of this situation, Japan announced its intention to provide Pakistan with emergency economic assistance of 4.7 billion yen. In October 2001, Japan discontinued the economic measures on Pakistan. This was a decision based on a comprehensive review of all factors, including an evaluation that the above measures had achieved their objective to a certain degree in view of Pakistan's intention to maintain a nuclear-test moratorium and to ensure strict control of nuclear and missile related goods and technologies. The importance of Pakistan's stability and cooperation in the fight against terrorism was also a factor.

In February 2004, the Pakistan Government investigated and publicized a case in which Dr. Abdul Qadeer Khan was charged with leaking nuclear-related technologies. While the Pakistan Government has denied any involvement in the incident and promised to take action to prevent the recurrence of another such incident, Japan has expressed concern over the incident and strongly requested Pakistan to provide further information as well as taking specific measures to prevent such an incidence to recur. In response, the Pakistan Government took positive steps such as exchanging opinions with Japan on export control and submitting a bill for stricter export control to the National Assembly, which Japan has appreciated as intentions to vigorously pursue nonproliferation. Japan, however, in accordance with Japan's ODA Charter, has requested that the Pakistan Government pledge to Japan and the international community to take further appropriate measures to improve the nonproliferation system and reduce the concerns of the international community.

Japan will continue to persuade Pakistan to sign and ratify the NPT and CTBT and take other measures for nonproliferation. Japan will consider taking measures including the resumption of the afore-mentioned economic measures in the event that Pakistan conducts actions contrary to the efforts of the international community on nonproliferation and nuclear arms reduction.

### 3. India

India has been playing an important role for the stability of the South Asia region and increasing its presence in the international community. Japan attaches importance to establish good relationships with India and has been assisting the country to develop socially and economically, recognizing that India is still suffering from serious poverty while it is keeping high economic growth.

Immediately after India conducted an underground nuclear test in May 1998, Japan strongly protested to India and strongly urged the country to stop carrying out nuclear tests and nuclear arms development and to sign the NPT and CTBT as soon as possible. Japan imposed economic measures on India based on the Principles of ODA Implementation in the ODA Charter including the suspension of new Yen loans and grant aid with the exception of emergency and humanitarian assistance and Grant Assistance for Grassroots Projects. Since then, the Japanese Government has seized every possible opportunity to continually urge the Indian Government to take specific measures for nonproliferation and, most importantly, to sign the CTBT.

In October 2001, Japan discontinued the economic measures on India. This was a decision based on a comprehensive review of all factors, including an evaluation that the above measures had achieved objective to a certain degree in view of Pakistan's intention to maintain a nuclear-test moratorium and to ensure strict control of nuclear and missile related goods and technologies. The need to deepen relationships with India, which will play an important role in combating terrorism and in stabilizing South Asia, was another important factor.

India has continued the moratorium, even after the measures were lifted, but in January 2003, India unveiled its nuclear strategy which covered issues such as enhancement and maintenance of nuclear deterrence and use of nuclear arms in retaliatory attacks. Japan has been urging India to make efforts towards arms reduction and nonproliferation and, most importantly, to sign the NPT and CTBT during such opportunity as Foreign Minister Yoriko Kawaguchi's visit to India in January 2003 and the Japan-India Foreign Ministers' Meeting in June 2004.