The Thorn in Japan-Russia Ties

Recent Features

Features | Security | East Asia

The Thorn in Japan-Russia Ties

Japan and Russia would undoubtedly benefit from finding a resolution to the dispute over the Kuril Islands. But domestic pressure is holding them back.

J. Berkshire Miller offers a number of good reasons why Russia and Japan would benefit from setting aside their territorial dispute and concentrating on developing their joint security and economic interests. Unfortunately, no recent development looks sufficiently strong to break the logjam that has blocked progress on this issue for decades.

The core territorial dispute concerns what the Japanese call their Northern Territories and what the Russians term the Southern Kurils. Russian and Japanese historians can cite competing evidence to support their legal claims, but this is irrelevant since the issue can’t be settled by historical or legal reasoning since the problem has long been one of competing contemporary national interests aggravated by national prestige, diverging priorities, and nationalist public opinion that makes it hard for elected politicians to compromise.

As a result, the territorial tensions between Russia and Japan prevent these two countries from aligning together to advance their common security and economic interests. Excluding their territorial dispute, Russia and Japan share several overlapping geopolitical and economic interests that should make them natural partners if not allies.

In East Asia, Russia and Japan confront similar challenges of China’s growing economic and military power as well as North Korea’s nuclear testing and missile launches. Better ties between Moscow and Tokyo might prove to be the catalyst for a long-anticipated geopolitical realignment that sees them adopt a more guarded approach to China’s rise by strengthening their bilateral ties. This repositioning would allow them to concentrate their efforts on matching China’s growing economic and military power. It might also induce the Chinese to moderate their policies towards Russia, Japan and other countries.

Russia and Japan are certainly striving to become more influential players in the Korean issue. For example, the two Koreas, China, and the United States all expect that any Korean peace treaty would be signed by these four countries alone, excluding Russia and Japan from even the negotiations of any treaty.

In the economic realm, meanwhile, Japan and Russia are also finding themselves marginalized from the newly dynamic economies of ASEAN. China and the United States are leading the external competition for their influence by, among other means, offering Association of Southeast Asian countries diverging models for free trade agreements, with diverging principles and memberships.

In addition, the Japanese would like to expand their access to Russia’s natural resources, especially oil and natural gas, while the Russians would like to secure more Japanese investment to modernize their energy and other industries and to develop the Russian Far East. This Russian region’s lagging development and alienation from Moscow represents a long-term security challenge in the face of China’s growing population and economic-military potential.

Unfortunately, the Russian-Japan territorial dispute has made it difficult for these countries to pursue these shared interests. Various proposals to divide control of the islands or establish a creative shared sovereignty arrangement have never gained decisive support in both governments simultaneously. Whenever one side seemed prepared to make a deal, the other party has declined in the end to endorse it.

At present, the most commonly proposed compromise options are: (1) some kind of joint Russian-Japanese sovereignty or condominium over all the islands, with the two countries focusing on pursuing joint economic projects and other combined Russian-Japanese activities; (2) Russia transfers two islands (Shikotan and Habomai are most often discussed in this context) to Japan and the two countries joint develop the other two; (3) 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); and (4) 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.

But Japanese and Russian public opinion remains strongly opposed to any of these compromise solutions or any plausible territorial deals. The Japanese public has substantial sympathy for the thousands of Japanese nationals who were displaced from their ancestral homes on the islands by Soviet military occupation that began in 1945.  Whenever prominent Japanese have proposed consideration of compromise scenarios, they have therefore been denounced by many other Japanese calling for a hard line.

Polls show that the Russian public is equally hostile to making further territorial concessions. The 10,000 to 20,000 Russian citizens who now live on the islands would most strongly resist a return of Japanese sovereignty there, but many other Russians, recalling the loss of so much potential Russian territory in the early 1990s in the vain hopes of ending Russia’s alienation from the West, oppose further territorial transfers at Russia’s expense. Russian politicians regularly burnish their nationalist credentials by stressing their opposition to returning the islands.

Since any compromise settlement would see extensive criticism from nationalist politicians, Russian and Japanese leaders typically have found it easier to stand firm on principle regardless of the high opportunity costs – notably, the lack of a formal peace treaty and the discouraging of potential investors and other business deals due to the increased uncertainty.

Economic and military considerations also discourage Moscow from accepting the loss of the islands. They are surrounded by rich fishing grounds as well as what are thought to be valuable natural resources, including underwater oil and gas deposits. Russian ships regularly detain Japanese sailors who attempt to fish in the waters surrounding the disputed 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.

A foreign military presence on the islands could also threaten Russia’s Pacific Fleet, which sails through their straits as it leaves and enters its home port of Vladivostok. Conversely, the Russian forces on the islands prevent foreign navies from entering the Sea of Okhotsk, where Russia’s strategic submarine fleet conducts its patrols rather than in the high seas, where they would be more vulnerable to detection and attack. The Russian Navy plans to deploy its newest Yury Dolgorukiy or Borei-class strategic submarines with its Pacific Fleet when the current fleet of Delta-IIIs set to retire during the next few years.

Prestige considerations are also relevant since Russia gained possession of them through a highly successful Soviet military campaign at the end of World War II, which marked Moscow’s military recovery in Asia from its disastrous defeat in 1905 in its war with Japan. Conversely, the Japanese resent how the Soviet Union’s exploited Japan’s imminent defeat to seize the territories in the last days of World War II.

Another obstacle to Tokyo’s making major concessions is that Japanese officials and analysts continue to believe that economic imperatives will induce Russia to make territorial concessions. It’s true that Russians desperately want to attract more Japanese foreign direct investment, especially in the high-technology sphere, to help modernize the Russian economy and revitalize the Russian Far East in particular. 

But Russian leaders have little incentive to compromise now that bilateral economic ties are developing regardless of the sovereignty issue. In 2003, Russian President Vladimir Putin and Prime Minister Koizumi agreed to a “Japan-Russia Action Plan” that set aside the sovereignty dispute while the two countries promoted greater economic and other cooperation. Bilateral trade exceeded $30 billion in 2011, a record level. Russian and Japanese energy companies are partnering to develop a liquid natural gas (LNG) plant in Vladivostok, while Japan's Mitsui and Mitsubishi corporations already have invested in the $22 billion Sakhalin-2 LNG project.

Furthermore, the Japanese Diet has recently approved a 25-year bilateral civil nuclear energy cooperation agreement. The new accord establishes a framework in which Russian and Japanese companies can reach specific deals to exchange peaceful nuclear power technologies, sell nuclear services, enter into joint business ventures as well as jointly design, construct, and operate nuclear reactors and dispose of nuclear waste. It should help the Japanese nuclear energy industry recover and help Russia’s nuclear energy sector realize its ambitious growth plans.

It’s true that Russian-Japanese economic ties would probably increase further if the two countries could settle their territorial dispute. For example, Japanese companies avoid conducting business in the disputed islands for fear of legitimizing Moscow’s sovereignty over the islands. But Russian leaders believe that Russia-Japan relations can develop satisfactorily even without a formal peace treaty. For example, Deputy Prime Minister Sergey Ivanov told the attendees of last summer’s Shangri-La Dialogue that, “I don’t think it is the only example in the world when countries normally coexist, trade and exchange people without a peace treaty. In my view, it is becoming a more formal matter, not a substance matter.”  

In addition, Russia already has strong alternative economic partners in Asia in the case of China and South Korea. The long expected energy partnership between Russia and China is slowly gaining steam, while Russia-South Korea economic ties are also improving.

And Russia is succeeding in raising its profile in East Asia more generally even without resolving its dispute with Japan. The partnerships with China and especially India remain solid. Russia is chairing the Asia-Pacific Economic Cooperation Forum this year, and will host its annual summit this September in Vladivostok. Last year, Russia joined the East Asian Summit, which could emerge as the most important multinational security institution in East Asia. Russian representatives regularly participate in the ASEAN Defense Ministers’ Meeting and Dialogue Partners, the Asia Cooperation Dialogue, the Conference on Interaction and Confidence‑Building Measures, and the Shanghai Cooperation Organization.

It would be ironic if Miller is correct that Japanese leaders are eagerly awaiting Putin’s return to the Russian presidency since they expect he would pursue a more conciliatory stance on the territorial dispute. Before 2008, some Japanese analysts had hoped that they could wait out Putin’s first term in the presidency and deal with a more pliant successor. But Russian President Dmitri Medvedev has adopted an even harder line than Putin toward the islands. In November 2010, Medvedev broke decades-long precedent and visited Kunashiri Island, becoming the first Russian (or Soviet) head of state ever to visit one of the disputed islands.

Moscow leaders had always avoided such a provocative act for fear of antagonizing Japan, but Medvedev may have calculated that the Japanese government, led by Prime Minister Naoto Kan, wouldn’t respond too strongly because Japanese commentators had repeatedly been describing the government as weak and ineffective. They had also highlighted increasing strains between Japan and the United States as well as with China, North Korea, and other neighbors. Indeed, the Kan government actually didn’t respond strongly to Medvedev’s move. After some initial pro forma protests, anonymous Japanese officials told the Japanese press – with the presumed expectations that the Russians would hear their message –  that they wouldn’t take any further actions provided that Russia also refrained from further provocations. 

An enduring territorial settlement between Russia and Japan would require the advent of either of two conditions, neither of which looks likely to arrive any time soon. One possibility would be for a Russian government to resume pursuing the now discredited policy Moscow adopted during the early 1990s, when the new Russian Federation was willing to make territorial and other major concessions as gambits to resolve longstanding sources of tension with neighbors. The strategy, which failed, aimed to eliminate those disputes that alienated Russia from the West and thereby facilitate the Russian Federation’s entry into the Western bloc of countries that includes Japan.

A second alternate scenario would be that a strong Japanese government could arise that was willing and capable of selling domestically the kind of compromise settlement that Russians have repeatedly demanded – that Tokyo renounce its claims to at least two of the islands in return for a peace treaty with Moscow and evidence that Japan would contribute to Russia’s economic development.

In the meantime, as welcome as a deal would be, the issue is set to remain a thorn in both countries’ sides.