Russo-japanese Relations Improving

Recent statements suggest that Japanese Prime Minister Junichiro Koizumi is optimistic about reaching a settlement with Russia over the four islands that Stalin seized from Japan at the end of 1945 (Asahi Shimbun, July 20). Japan has refused to sign a peace treaty with Russia formally ending World War II until the Northern Territories dispute is resolved.

The plan apparently is to raise the issue with President Vladimir Putin at the Asia-Pacific Economic Cooperation summit in Chile in November, clearing the way for a signing ceremony during Putin’s planned February 2005 visit to Japan to mark the 150th anniversary of the first commercial treaty between Russia and Japan.

Koizumi’s optimism apparently stems from the fact that Russia has committed itself to construct a Japanese-financed oil-export pipeline (see EDM, July 16) to the port of Nakhodka, in place of a line into China. Having confidently opened up relations with North Korea with his visit to Pyongyang in 2002, Koizumi seems to be hoping for a similar diplomatic coup in Moscow. It fits in with Koizumi’s quietly assertive agenda, namely to step up Japan’s military cooperation with the United States and to turn Japan into a more “normal” member of the international community.

Perhaps Koizumi is also drawing confidence from Putin’s stronger political position: his creation of a loyal parliament, his re-election as president, his defeat of the oligarchs and, more recently, of the generals. Perhaps Koizumi believes that Putin wanted to return the islands earlier, but political obstacles prevented him from doing so. It is true that Putin has a much freer hand than he did twelve months ago — but there is no reason to believe that he has any desire to give away any Russian real estate.

Another factor encouraging Tokyo is progress in the exploitation of the Sakhalin oil and gas fields — although Moscow has never hinted at any linkage between the territorial dispute and the energy projects, which Russia regards as mutually beneficial business activities. The first contracts were signed ten years ago, but the projects were delayed by arguments over production sharing agreements, environmental concerns, and escalating costs. Japanese customers are supporting the construction of an LNG plant on Sakhalin rather than a pipeline to carry gas from Sakhalin I, a project strongly encouraged by the Japanese government but carrying substantial financial and ecological risks.

Last year Tokyo power companies agreed to buy 35% of the first 10 million tons of liquefied natural gas from the $10 billion Sakhalin II project, expected in 2007. Sakhalin II is jointly owned by Shell (55%), Mitsui (25%) and Mitsubishi (20%). The lead partners in Sakhalin I are Exxon (30%) and Japan’s Sodeco (30%). Sakhalin I started pumping oil in 1999, down a pipeline to the port of DeKastri, with output of a modest 1.4 million tons in 2003.

In 2002 a compromise plan, for Japan to receive two of the islands now while continuing to negotiate over the others, collapsed after revelations of corruption in the allocation of aid money to the Hokkaido constituency of the legislator promoting the deal, Muneo Suzuki. In the wake of the scandal Koizumi downsized Northern Territories cooperation programs, and the issue appeared shelved.

In any case, there was no evidence that Russia itself was interested in Suzuki’s compromise deal. No progress was made on the issue at the Putin-Koizumi summit in January 2003, at which point Ekspert magazine commented, “Everybody — here and there — knows that we won’t give up the islands.” Subsequent diplomatic contacts, such as a visit to Moscow by former Prime Minister Yoshiro Mori at the head of a business delegation in April 2004, or the Moscow visit by Foreign Minister Yuriko Kawaguchi in June, have produced no visible progress.

With respect to the Northern Territories both Russians and Japanese are motivated by the same force: wounded national pride. That is why the search for a reasonable compromise has proved so difficult. Japan invokes claims of historical justice and international treaties. The Soviet seizure of the Northern Territories and expulsion of the inhabitants represented a flagrant violation of international law. But Russia regards the islands as compensation for their wartime losses at the hands of the Nazis and believes that the whole issue should be set aside now that the Cold War is over.

Putin has made the preservation of Russia’s territorial integrity an absolute priority, so it is hard to see him signing away the islands under any circumstances. On the contrary, last summer Putin organized the first large-scale naval exercises in the Russian Far East since the collapse of the Soviet Union, and has allocated money to rebuild the garrisons on the island. Moscow regards them as strategically vital to close off the Sea of Okhotsk and preserve it as a secure area for Russian nuclear submarines, a vital component of its nuclear deterrent. During his visit to Kamchatka in June, Putin refuted suggestions that Russia might close its submarine base in Petropavlovsk-Kamchatsky and concentrate its submarines in the Northern Arctic fleet.