Tokyo and Moscow to discuss territorial dispute in Sochi

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By Marina Romanova

Japanese Prime Minister Shinzo Abe will visit Russia this Friday, May 6th to meet with President Vladimir Putin in the 2014 Winter Olympics city of Sochi. According to the Kremlin, Abe will be visiting Russia at Putin’s invitation.
Two leaders will talk “on bilateral relations, including a territorial dispute over four Russian-held islets off Hokkaido, and international issues,” Yoshihide Suga, Chief Cabinet Secretary said at a press conference held in Tokyo last week.

Some observers look at the Russian attempts to forge better relations with Japan as a part of its “pivot to the East.” While others emphases that Moscow is not only seeks to enhance its presence in the Asia-Pacific, but also to avoid limiting its list of partners in East Asia to China.

At the end of 2014, Japan led all Asian nations with more than US$14,4 billion in direct investment in the Russian economy – its investments in the oil and gas sector alone more than tripled China’s total contributions. As of the end of 2014, China was only the fourth biggest Asian investor in the Russian economy, having made cumulative direct investment of about US$3.37 billion, while India had invested US$3.6 billion, according to Eurasian Development Bank (EDB) data.

The bulk of Japan’s investments went into oil and gas projects on the island of Sakhalin: Sakhalin-1 and Sakhalin-2 (US$10.1 billion). Unlike Japan, China invested only US$1.2 billion in the Russian oil and gas industry, despite being one of the main Asian consumers of Russian energy resources.

Japanese Prime Minister Shinzo Abe has set a national target to meet more than 40 percent of the country’s oil and gas demand in 2030 with Japanese firms’ equity output. Therefore, deeper ties between Japan and Russia “are not simply a matter of if, but when and where”, oilprice.com speculates.

International observers assume, scheduled for this coming Friday meeting in Sochi is likely to clear the road for Putin’s official visit to Japan, which was originally planned in 2014 but canceled after Ukraine-related tensions.

“Trade between Moscow and Tokyo has reached a record-high to almost US$33 billion in 2013, but in 2015 the volume dropped by almost 40 percent due to falling oil prices,” Motoo Hayashi, Japan’s Minister of Economy, Trade and Industry, said when hosted the Business-mission “Trade and Industrial Dialog Russia-Japan” this March in Tokyo.

He added that about 14 percent of all Russian cars are produced in Russian factories by Japanese manufacturers, yet “economic relations between two countries could and should expand.” But mutually advantageous cooperation between two nations will heavily rely on the possibly historical decision on a territorial dispute announces by Tokyo as subject matter for Sochi meeting.
70 years old dispute

Russian-held islets between southern tip of Russia’s Kamchatka Peninsula and Japan’s Hokkaido usually called Northers Territories in Japan, namely Iturup, Kunashir, Shikotan and the Habomai Archipelago, were first colonized by Japan in 1895. The Southern Kuril Islands, as Russians called them, became to be the bone to gnaw, or 70-year old territorial dispute between the Asia-Pacific neighbors.

Technically speaking, Japan and Russia are still in a state of war, since the countries have not yet signed a peace treaty formally ending their World War II hostilities.
When Japan was evicted from the Southern Kuril Islands in 1945. In 1949 Soviet forces deported about 17,000 Japanese residents, mostly Ainu people, from the islets and brought in Russian settlers. Many of those who were deported are still alive and reside in Hokkaido. “It would be political suicide for any government in Tokyo to compromise on the Northern Territories,” says Shigeo Tanaka, a political analyst based in the Japanese city of Sapporo. “The association of former Northern Territory residents has great political lobbying power and sympathy.”

Back in 2004, Russia said that the offer of a return of the two southernmost islands, originally made in 1956, when Japan and USSR restored diplomatic ties between the two nations, was still on the table, but showed no signs of relinquishing the two larger islands. Back then Japan rejected the deal, partly because the two islands represent only 7 percent of the land in question. Another reason was natural resources of larger islands.

In 2006 the Kurils was estimated  by Russian Agency of Statistics to hold approximately 1,867 tons of gold, 9,284 tons of silver, several million tons of both titanium and iron ore, an abundance of rare earth minerals, prolific forest resources and extremely productive ocean waters, not to mention eye-catching oil and gas potential. The islands, with their virgin forests, volcanoes and waterfalls, also hold immense potential for tourism. But to crack Kurils immense mineral and tourists potential Russia will need a generous foreign investor.

As for now, islets have no more than 19,000 Russian citizens living there including Russian military troops present on Iturup. Moscow has also started building military garrisons on isle of Kunashir. Apart from that Kurils remain completely undeveloped.

As of 2015, there were only 8 inhabited islands out of a total of 56. Ironically enough, one of the those inhabited islands, Etorofu Island, is over 60 percent ethnically Ukrainian.

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