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Canada lifts economic sanctions on Pakistan

Ajit Jain in Toronto

Canada on Monday announced that it is lifting sanctions against Pakistan that were imposed following its nuclear tests in May 1998. The situation had been further complicated following the military coup in that country.

However, the ban on military exports and nuclear co-operation will continue.

In a statement from Ottawa, Minister for Foreign Affairs John Manley said, "Canada commends the courageous stand that Pakistan is taking against terrorism in the region and believes that its role should be both recognized and supported by the international community."

Canada proposed to convert up to $447 million in outstanding loans, owed by Pakistan to the Canadian International Development Agency (CIDA), into development aid to be used in the social sector.

"The measures announced on Monday clearly demonstrate Canada's strong commitment to helping Pakistan at this difficult time."

Canada had welcomed Musharraf's August 14 announcement of a road map for democracy in which he outlined a phased restoration of democracy in Pakistan culminating in national and provincial elections between Oct 1 and 11, 2002, Manley pointed out.

He also said that Canada was closely monitoring Islamabad's progress on this front.

"This debt-for-development conversion will enable Pakistan to direct much-needed resources to its social programs," Minister for International Cooperation Maria Minna said.

"Canadians have worked side by side with the Pakistani people through a number of recent crises and we will continue to make a difference on the ground in the days to come," she said.

Pakistan has 43 outstanding loans with CIDA, totalling $447-million, incurred prior to 1986 when CIDA moved to an all-grants aid program. These loans entailed payments of $16-million per year.

At Pakistan's request, CIDA has agreed to convert this debt to development aid.

In May 1998, following Pakistan's nuclear blasts, Canada had imposed 'economic measures' against the country.

On Monday, Canada removed all those measures, except for the ban on military exports, said Manley's spokesman Sanjeev Chowdhury.

Sanctions against India had been eased last March and the remaining limitation on Canadian support for loans from international financial institution was lifted on Monday.

As in the case of Pakistan, existing restrictions on military sales to India will continue to remain in place, Chowdhury said, adding so did the long-standing prohibition on nuclear co-operation with both the countries.

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