Minister of Foreign Affairs John Manley
Press Release Announcing Assistance for Pakistan
October 1, 2001

John Manley, Minister of Foreign Affairs, and Maria Minna, Minister for International Co-operation, today announced new measures to assist Pakistan in recognition of President Pervez Musharraf's decision to join the international coalition against terrorism. Canada will ease sanctions against Islamabad and will convert up to $447 million in outstanding loans, owed by Pakistan to the Canadian International Development Agency (CIDA), to be used for development programming in the social sector.

The announcement follows a telephone conversation between Prime Minister Jean Chrétien and President Musharraf on September 28 during which the leaders discussed the aftermath of the terrorist attacks on the United States.

"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," said Mr. Manley. "Measures announced today clearly demonstrate Canada's strong commitment to helping Pakistan at this difficult time."

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

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 be used for development. Minister Minna stated that Canada will work with Pakistan to ensure that the debt swap will focus on improving social programs. Terms and conditions for the debt conversion are to be determined.

Minister Manley also noted that Canada welcomed President 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 October 1 and 11, 2002. Mr. Manley underscored that Canada was closely monitoring Islamabad's progress on this front.

In May 1998, Canada imposed economic measures on Pakistan and India following their respective tests of nuclear weapons, including: restriction of all new bilateral aid to that which focussed on humanitarian needs; support in international financial institutions only for loans associated with basic human needs; and a ban on military exports. Today, Canada has removed all of these measures against Pakistan except for the ban on military exports. Sanctions against India had been eased last March, and the remaining limitation on Canadian support for international financial institution loans was lifted today. Existing restrictions on military sales to India will remain in place. The long-standing prohibition on nuclear co-operation with both Pakistan and India also remains in place.

In making the announcement, Mr. Manley stressed that Canada remains deeply concerned about nuclear proliferation in South Asia and our policies in this respect are unchanged. Canada continues to call on Pakistan and India to respect UN Security Council Resolution 1172, which calls on both countries to renounce their nuclear weapons programs, to cease development of ballistic missiles capable of delivering nuclear weapons, to sign and ratify the Comprehensive Test Ban Treaty and to join the Non-Proliferation Treaty as non-nuclear weapons states. Canada also encourages India and Pakistan to continue their constructive dialogue aimed at resolving their long-standing disputes.


©2001 Government of Canada.