Publication: Eurasia Daily Monitor Volume: 2 Issue: 193

As Russia has failed to secure any significant economic commitments from Tokyo,

notably on the Japan-bound Pacific oil pipeline route, the Kremlin is losing

interest in resolving a long-standing territorial dispute any time soon.Russia

appears to have ruled out any compromise over the Kuril Islands, a dispute dating to

the last days of World War II, as the federal government in Moscow has decided to

increase funding for this territory.

On October 13, the Russian government approved a blueprint to develop the Kuril

Islands through 2015. Prime Minister Mikhail Fradkov reportedly told the cabinet

meeting that the Kuril Islands remain Russia’s “strategic outpost.” Fradkov also

suggested investment to develop the infrastructure and fishing industry there.

Vladimir Yakovlev, minister of regional development, warned the meeting that “tense”

social and economic conditions in the Kurils could eventually undermine Russian

national security. He suggested raising funding in order to improve the situation.

Subsequently, the government pledged to invest more than 15 billion rubles ($526

million) in the Kurils in the next decade. For 2006, the government promised to

allocate 2.5 billion rubles ($88 million), up roughly six fold from some 400 million

($14 million) this year.

Russian Defense Minister Sergei Ivanov strongly backed plans to raise funding to

develop the Kuril Islands. He suggested that the Russian Defense Ministry should

have a right to control the development of the local infrastructure, because more

than half of the islands’ current residents are Russian military personnel and their

dependents (Itar-Tass, RIA-Novosti, October 13).

With these announcements, Moscow has demonstrated its intention to take care of the

Kurils on its own. However, an earlier government blueprint for the Kurils Islands,

approved back in 1993, failed to bring planned results. Economic Development and

Trade Minister German Gref conceded that only 40 out of the planned 153 projects

have been completed. The Kuril economy was supposed to grow nearly threefold, but

the actual growth rate was limited to 20 percent within the past decade.

Nonetheless, one Russian top official bluntly told Tokyo to forget about the Kurils.

Last August, President Vladimir Putin’s special envoy in the Far East, Konstantin

Pulikovsky, declared, “Russia does not have any problem regarding the Kuril

Islands.” Relations between Russia and Japan are good enough even without a peace

treaty, he said. In the meantime, the Kuril Islands are set to become “a beautiful

corner of a prosperous Russia,” Pulikovsky said.

Since earlier this year, Russian officials have advocated plans to give the Kurils a

much needed development boost. Moreover, in June 2005 Nikolai Patrushev, head of the

Federal Security Service (FSB), the agency in charge of the country’s border-guard

forces, traveled to Sakhalin region and the South Kuril Islands to inspect border

facilities. In an apparent symbolic gesture, local serviceman reportedly erected a

Russian Orthodox cross and chapel on the Kunashir shore, a site that can be seen

from Hokkaido. The message was clear: the Japanese should forget about the “Northern


A search for compromise seemed feasible just last spring, when Japanese sources

floated a possible compromise. Instead of a 50-50 split of the total area, perhaps

there could be a 37-63 arrangement, with the smaller part going to Japan. Russian

academics have also been exploring compromise solutions. Vasily Mikheyev, head of

the Institute of Far Eastern Studies of the Russian Academy of Sciences, suggested a

sort of trade-off: Japan should take two islands instead of four it currently claims

and sign a peace treaty with Russia in exchange for Russian support of Japan’s bid

for a permanent place at the UN Security Council. By now, these ideas have seemingly

dropped into irrelevance.

Last year, Russia indicated that a major energy deal with Tokyo was possible. In

December Prime Minister Fradkov approved the Japan-bound Taishet-Nakhodka pipeline

over another route through China. But then the Kremlin appeared upset by Japan’s

stubborn stance on the territorial dispute and Tokyo’s reluctance to commit any

funding for the Pacific pipeline. Subsequently, Russia revealed plans to build a

branch oil pipeline to China first, instead of giving priority to linking the

pipeline to its Pacific coast as sought by Japan.

Moscow also announced that it no longer needed Japanese investment in the pipeline

project. According to Russian Deputy Foreign Minister Alexander Yakovenko, “Russia

is not making the building of the oil pipeline contingent on its relations with

Japan. We have sufficient resources to build this oil pipeline independently.”

Responding to a question about a peace treaty with Japan, Yakovenko said it would

not be signed during Russian President Vladimir Putin’s upcoming visit to Japan. He

said, “negotiations are in progress,” but due to differences in positions, “they are

not moving very quickly” (Izvestiya, RIA-Novosti, October 5). As Moscow has been

upset by Tokyo’s obduracy, China now appears poised to replace Japan as the main

beneficiary of a trans-Siberian oil pipeline.