Features | Security | East Asia

Japan’s Other Territorial Headache

Dmitry Medvedev’s decision to visit a disputed island chain piles the pressure on a Japanese government already wrestling with China.

The decision by Russian President Dmitry Medvedev to become the first Russian (or indeed Soviet) head of state to visit what Japan describes as its Northern Territories couldn’t have come at a much worse time for Japan’s beleaguered government.

The Japanese are still recoiling from their latest confrontation with China over the Senkaku islands (known as the Diaoyu in Chinese), and want this weekend’s Asia-Pacific Economic Cooperation (APEC) summit to be successful enough to allow Japan to start reclaiming some of the international lustre that has been flowing Beijing’s way in recent years.

And, until now, Moscow leaders had always avoided the provocative act of visiting what Russia calls the Southern Kurils for fear of antagonizing Japan. On this occasion, however, Medvedev must have calculated (correctly) that the weak Japanese government, led by Prime Minister Naoto Kan, wouldn’t respond all that strongly to his decision to rekindle the 65-year-old dispute given the ongoing spat with China.

Although Japanese officials warned Medvedev against conducting the visit when his planned trip became known, the Japanese government protested officially only after Medvedev set foot on the island of Kunashiri, recalling its ambassador to Russia for consultations. Japanese officials have also made clear they will still welcome Medvedev to the APEC summit.

The Northern Territories/Kurils dispute dates back to the end of World War II, and has been a prickly enough issue to ensure that Japan and Russia have never actually signed a formal peace treaty (making this the only legally unsettled conflict hanging over from the conflict).

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At the end of the war, the Soviet military occupied the four islands of Habomai, Shikotan, Kunashiri and Etorofu. The Soviet government then expelled most of the original inhabitants and established military bases and other settlements in their place. The Japanese government’s position is that while Tokyo did cede control of the Sakhalin and Kuril Islands to the USSR under the 1951 San Francisco Peace Treaty (which the Soviet government never signed), the treaty’s provisions didn’t apply to the four islands of the Northern Territories because Tokyo has never recognized them as part of the Kuril chain.

Various proposals to divide control of the islands or establish creative shared sovereignty have failed to garner decisive support in both governments simultaneously—whenever one side seemed prepared to make a deal, the other party ended up declining to endorse it.

At present, the most commonly proposed compromise options are: (1) Russia transfers the two southernmost islands (Shikotan and Habomai) to Japan and the two countries jointly develop the other two; (2) Russia transfers three islands to Japan (splitting the difference between Moscow’s recurring offer to surrender two of them and Tokyo’s formal insistence on receiving all four); or (3) the so-called fifty-fifty plan in which the total area of the islands is equally divided, which would result in Japan’s receiving three of the islands and some part of the fourth and largest island. The Soviet government formally offered the first option in 1956, while various Russian leaders and officials have hinted at the possibilities of options 2 or 3 at some track II talks in Washington.

The Russians aren’t the only ones who have seen merit in these proposals. A few prominent Japanese have endorsed the idea of at least considering one of these scenarios, especially the last option. However, each time they’ve immediately come in for sharp criticism at home, which has prevented any attempts at securing broader support. Mainstream Japanese officials have for their part indicated they’ll show flexibility regarding when and how Russia gives the islands to Japan, but they insist that the Russian government formally recognize Tokyo’s sovereignty over all the territories.

The problem for Japanese leaders is that whatever they might think in private, public opinion has always been strongly against any proposed deal. Thousands of the islands’ original inhabitants who were forcibly expelled by Soviet occupation forces after World War II still live in Japan, and these individuals have substantial public sympathy, making it difficult for any government to compromise.

And, although Russian officials have established a procedure that allows the former Japanese inhabitants of the islands to visit them without a visa, it would find conceding ownership of all the islands difficult for a number of reasons, not least because they are now inhabited by tens of thousands of Russians. They are also surrounded by rich fishing grounds and possibly offshore oil and gas reserves, while the Russian government has also invested millions of dollars into developing the islands’ civilian infrastructure. Meanwhile, a foreign military presence on the islands could threaten Russia’s Pacific Fleet, especially its strategic nuclear submarines, which conduct patrols through the surrounding waters.

Even if they privately wanted to hand the islands over, Russian leaders would also find themselves facing stiff public opposition—Medvedev was undoubtedly aware of the PR benefits of visiting the islands with a camera crew filming him asking after the health and living conditions of the local Russians and pledging further infrastructure improvements.

The problem for both countries is that although in political terms they’ve found it easier to stand by their principles rather than face down nationalists in their own countries, there are considerable costs to failing to resolve the issue, not least the lack of a formal peace treaty and the discouraging of potential investors and other business deals due to the uncertainty surrounding the issue.

The sovereignty dispute has also fostered mutual distrust over alleged territorial violations. Russian ships regularly detain Japanese sailors who attempt to fish in the waters surrounding the islands, charging them with violating Russia’s maritime boundaries. In August 2007, a Russian coast guard ship killed a crew member of a Japanese fishing boat with a warning shot aimed at the vessel. In turn, the Japanese government has alleged that Russian military aircraft have periodically violated Japan’s air space. The Russian and Japanese media regularly criticize the exercises one side conducts in the proximity of the other, while the two governments have objected to each other’s defence cooperation with third parties.

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For years, Japanese leaders have pursued a strategy of limiting economic ties with Russia to pressure Moscow to make concessions on the island dispute. But Japan’s hopes of exchanging greater Japanese economic support for territorial compromises by Moscow have wavered with the resurgence of the Russian economy over the past decade. As a result, the Russian side appears to have achieved its objective of bracketing the territorial conflict while the two countries develop economic ties. And growth bilateral trade has been strong in recent years—it reached $20.1 billion in 2007, a 65 percent increase over the previous year and a fourfold increase over the 2000 level of $5 billion. Meanwhile, two-way commerce exceeded $30 billion in 2008, making Japan Russia’s third largest trade partner in Asia.

Yet despite the recent uptick, Russian-Japanese commerce seems modest compared with the exploding economic exchanges elsewhere in the Asia-Pacific region, especially considering the Russians (who want Japanese financial and other assistance in developing eastern Russia) and the Japanese (who eye Russian energy exports) seem like natural partners. Only a small fraction of Japanese exports flow to Russia, while Japanese investment in Russia remains low compared with other countries.

There’s potential for the two countries to do much more together, not least co-operation in the nuclear energy sector. In March 2008, AtomEnergoProm, which controls Russia’s non-military nuclear entities, and Japan’s Toshiba, which owns Westinghouse, signed a preliminary agreement to explore possible civil nuclear power cooperation, including in areas such as developing new nuclear plants, uranium enrichment facilities and other civilian nuclear technologies. Such a partnership would allow them to compete better with US and European nuclear companies. Last March, the two corporations announced they were studying whether to establish a joint venture to construct a uranium enrichment plant in Japan that would draw heavily on Russian technology and provide reactor fuel to Japan and other Asian countries.

So what are the chances of a change in heart on either side? Until 2008, some Japanese had hoped that they could wait out Vladimir Putin’s presidency and deal with a more pliant successor. The expectation was that, with new Russian leadership, the two governments could reach a settlement at the sidelines of the July 2008 G8 summit in Hokkaido, which is located near the disputed territories. But Putin’s decision to become prime minister after leaving the presidency, combined with the selection of mentee Medvedev as his successor, has meant that the current government still aggressively defends Russia’s territorial claims.

That said, even while Medvedev was breaking precedent and visiting Kunashiri, Russian officials were suggesting that he still stood by Moscow’s 1956 offer to return two of the islands go back to Japan in return for a peace agreement.

But the reality is that Russian leaders have had little incentive to seek deals with the succession of weak prime ministers in Tokyo, who lack the domestic influence to secure major concessions among the political establishment or society—especially now that bilateral economic ties are developing regardless of the sovereignty issue and Japanese leaders are anyway preoccupied with an increasingly assertive China.

And with Kan’s poll ratings dipping since he became prime minister in June—and plummeting following his perceived weak handling of the spat with China—this doesn’t look set to change any time soon.