Russia wins poker game with Japan over Kuril Islands

Japan and Russia leap out of English poet John Keats’ Ode on a Grecian Urn – “Forever wilt thou love, and she be fair.”

Despite the perfect complementarity of their economies and the shared interests and concerns in the post-Cold War Far East, consummation of their professed mutual passion somehow remains elusive.

The main outcome of the summit between Japanese Prime Minister Shinzo Abe and Russian President Vladimir Putin in Vladivostok on Friday has been, well, that they will meet again in December at an onsenhot spring in the Japanese leader’s home prefecture of Yamaguchi.

That will be their 15th summit – that is, unless they meet again at the APEC meet in Peru in November.

Abe made a valiant attempt to keep the foreplay going. During August, he made three moves – created a new ministry dedicated to economic cooperation with Russia with the powerful economy minister Hiroshige Seko as its head; named Nobuo Kishi (Abe’s own brother) as state minister of foreign affairs in charge of relations with Russia; and, on Tuesday, launched a media blitzkrieg underscoring Tokyo’ eagerness to engage Russia in major economic cooperation, notwithstanding the deadlock in  the dispute over Kuril Islands.

Kyodo news agency, citing diplomatic sources in Tokyo, explained that Abe was making a big departure in longstanding policy by decoupling big-time economic cooperation and trusting that economic relations “will help build a relationship of mutual trust which, in turn, may lead to progress on negotiations over the territorial issue.”

For the next three days, Moscow agonized whether this amounted to a breakthrough or a bluff. The point is, Japanese companies also need to be convinced about the conditions for doing business and the climate for making investments in the Russian economy.

This has been India’s unhappy experience, too, with big Japanese industrial conglomerates which are reluctant to move in – unlike South Koreans – unless the business conditions are conducive.

Indeed, there are risks involved in doing business in Russia. In one glaring instance that must be deeply embedded in the Japanese memory, Moscow even forced Mitsui and Mitsubishi to concede a 50% stake in the Sakhalin-II oil and natural gas project.

Besides, Japanese multi-national companies will also be mindful of western sanctions against Russia. Washington rubbed this in when the US state department spokesman wryly commented on Thursday,

• Certainly, the United States – we’re not concerned or worried about bilateral relations between Russia and Japan and we leave it to them to define what that relationship is going to be.
• Nothing has changed about our view that it’s still not time for ‘business-as-usual’ with Russia across a wide variety of sectors given the concerns that we still have about their actions in Ukraine, their occupation of Crimea and the tensions that still exist.

But the crux of the matter still lies in the near-certainty that Russia cannot and will not budge on the territorial dispute. A recent opinion poll revealed that a big majority of Russians want all of the Kurils chain to remain as part of their country, and have a closed mind on making any form of compromise.

The day before he met Abe, Putin tied Abe down in caveats when he signaled in an interview with Bloomberg that “we (Russia) don’t trade in territories”, although Moscow “would like very much to find a solution to this problem” and “some sort of compromise” is possible if only Russia “can reach a similarly high level of trust” with Japan as it has with China.

Putin added, “We’re not talking about some exchange or some sale (of territory), we are talking about finding a solution where neither of the parties would feel defeated or a loser”.

Putin made it clear that a compromise with Japan on the territorial dispute remains where they were in 1956 when the Soviet-Japanese Joint Declaration was issued re-establishing diplomatic relations after World War II.

Meanwhile, the deepening chill in Russia’s relations with the US has prompted Moscow to build a new naval base for the Pacific Fleet on Matua in the Kuril Islands chain. Matua is not one of the islands claimed by Japan, but it is of military and strategic importance, with an airfield for Tu-22M3 long-range bombers capable of carrying Kh-101 long-range cruise missiles, and providing for deployment of missile-carrying nuclear submarines.

It is hard to see how this situation satisfies Abe. But then, does he have a choice here? The geopolitical situation is turning adverse for Japan. Principally, there are the growing continued pressures from China militarily and economically.

Then, there are the intertwined templates – closer ties between Russia and China; Sino-American rift (but, tempered also by their interdependence); New Cold War tensions in Eurasia percolating slowly into the Far East; overall weakening of US role (and influence) in Asia-Pacific and so on.

Suffice it to say, without jettisoning its stance on the territorial dispute with Russia, Tokyo is under compulsion to put it in the back burner and introduce economic cooperation as the centrepiece of the relations, capitalizing on Moscow’s dire need to develop its far-flung Siberian and Far Eastern regions through infusion of advanced technology and foreign investment.

Abe’s plaintive call on Friday suggests that Russia may be winning the poker game with the US:

• Vladimir, we are the people of one generation. Let’s display courage and assume responsibility, overcome difficulties and pass peace to future generations where Russia and Japan will unlock their huge potential. Let’s close the chapter on the abnormal situation for over 70 years already and together start a new era of Russian-Japanese relations that will last for another 70 years.

This appeal suits Putin fine because it highlights that the US policy to isolate Russia is not going entirely well. If in 2014 Tokyo had backtracked under US pressure on the invitation to Putin for a visit that year to Japan, there can be no doubt whatsoever that Abe will exercise strategic autonomy and host the Russian leader in December.

At Vladivostok, Abe and Putin agreed to continue exchanges between defense authorities of the two countries. Abe also expressed willingness for joint drills between their maritime authorities and called for more talks between the national security advisers.

Clearly, apart from economic cooperation, Abe also wishes to move forward on security cooperation with Moscow in a regional environment where there is so much latent hostility toward Japan that it desperately needs a friendly Russia. Even Russia’s neutrality vis-à-vis Japan’s core interests would be tantamount to a game changer for Tokyo.

Even if the territorial talks come to nothing, Japan benefits out of improved relations with Russia that may open up economic opportunities and a favourable dimension to the regional power dynamic.

Without doubt, China has taken note that there is a significant change in Japan’s thinking toward Russia. An editorial in the Global Times newspaper viewed this shift as an attempt by Tokyo in concert with the US with a view to “impose geopolitical pressure on China.”

It voiced confidence that China’s strength would ultimately lie in its own capability “to withstand any external military pressure” while retaining its “long-term economic vitality” and disdainfully pooh-poohed the “clamorous geopolitical rivalry in the Asia Pacific”.

Ambassador MK Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India’s ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001). He writes the “Indian Punchline” blog and has written regularly for Asia Times since 2001.