ABSTRACT
This chapter argues that with the Soviet invasion of Afghanistan, a major change occurred: security issues began to dominate over economic issues during the 1980s. Similar to the circumstances in the 1950s, a sound security environment had to be created before economic interests could be promoted. This meant that Soviet troops had to be got out of Afghanistan. For Japan the Soviet presence in Afghanistan represented a serious threat to vital energy sources, and therefore Pakistan assumed a major importance in Japanese strategic aid diplomacy. This led to increased economic assistance to Pakistan and enhanced bilateral trade and diplomatic exchanges. Coupled with the gradual deregulation of the economy under President General Muhammad Zia ul Haq, Japan’s increased security interest of Japan in the region gave renewed impetus to an existing but dormant economic relationship.
