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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE			

Sasakawa Peace Foundation USA

JAPAN-RUSSIA
RELATIONSSASAKAWA USAIMPLICATIONS FOR THE
U.S.-JAPAN ALLIANCE
Edited by Gilbert Rozman

JAPAN-RUSSIA
RELATIONSIMPLICATIONS FOR THE
U.S.-JAPAN ALLIANCE

JAPAN-RUSSIA
RELATIONSIMPLICATIONS FOR THE
U.S.-JAPAN ALLIANCE
Edited by Gilbert Rozman

Sasakawa Peace Foundation USA

Sasakawa Peace Foundation USA is an independent, American non-profit and nonpartisan institution devoted to research, analysis, and better understanding of the U.S.Japan relationship. Sasakawa USA accomplishes its mission through programs that benefit
both nations and the broader Asia-Pacific region. Our research programs focus on security,
diplomacy, economics, trade, and technology, and our education programs facilitate peopleto-people exchange and discussion among American and Japanese policymakers, influential
citizens, and the broader public in both countries.
ISBN: 978-0-9966567-5-7
Printed in the United States of America.
© 2016 by Sasakawa Peace Foundation USA

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Contents
Preface....................................................................................................................................................vii
Dennis Blair, Chairman and CEO, Sasakawa USA
Daniel Bob, Director of Programs and Senior Fellow, Sasakawa USA

Introduction.............................................................................................................................................1
Gilbert Rozman, Emeritus Musgrave Professor of Sociology, Princeton University

PART 1: THE FRAMEWORK FOR JAPAN-RUSSIA NEGOTIATIONS,RELATIONS IN 2012–15, AND PROSPECTS
Chapter 1

Carte Blanche: Absence of a Peace Treaty—Abnormal Situation....................................17
Alexander Nikolaevich Panov and Kazuhiko Togo

Chapter 2

A View from Japan on Japan-Russia Relations in the mid-2010s:
Collapsing Framework, and A Way Forward.............................................................................21
Kazuhiko Togo, Director, Institute for World Affairs, Kyoto Sangyo University

Chapter 3

A View from Russia on Japan-Russia Relations in the mid-2010s:
Searching for a Framework to Move Forward..........................................................................31
Alexander Nikolaevich Panov, Professor, Moscow State Institute of International Relations

Chapter 4

A Once in Sixty-Year Opportunity? Shinzo Abe’sApproach to Vladimir Putin..............................................................................................................41
Tomohiko Taniguchi, Professor, Keio University and Distinguished Fellow, Sasakawa USA

PART 2: GEOSTRATEGIC RELATIONS
Chapter 5

Russia’s Approach to Japan under Vladimir Putin: A Strategic Perspective..................51
Dmitry Streltsov, Director of Japan Studies, Moscow State Institute for International Relations

Chapter 6

Japan’s Approach to Russia under Shinzo Abe: A Strategic Perspective.......................61
Yasuhiro Izumikawa, Professor, Faculty of Policy Studies, Chuo University

vi CONTENTS
Chapter 7

Implications of Russia-Japan Relations for the Region..........................................................71
Georgy Toloraya, Director, Center for Asian Strategy, Institute of Economics,
Russian Academy of Science

Chapter 8

Russian Views on Security and Foreign Policy in the Asia-Pacificand Prospects for Cooperation with Japan .......................................................................79
Vasili Kashin, Senior Analyst, Center for Analysis of Strategies and Technologies

Chapter 9Japan-Russia Relations through the Lens of the U.S.-Japan Alliance ..........................89
Frank Jannuzi, President and CEO, The Maureen and Mike Mansfield Foundation

PART 3: ECONOMIC RELATIONS
Chapter 10

Japan-Russia Economic Relations with Emphasis on Energy Cooperation.................101
Hirofumi Arai, Director and Senior Research Fellow, Research Division, ERINA(Economic Research Institute for Northeast Asia)

Chapter 11

The Russia-Japan Economic Relationship: It Is Political,
but Not about the Territories..........................................................................................................111
Alexander Gabuev, Senior Associate and Chair, Russia in the Asia-Pacific Program,
Carnegie Moscow CenterPreface
The U.S.-Japan relationship is at one of its post-World War II high-water marks. Last year’s
update of the Bilateral Defense Guidelines, Prime Minister Shinzo Abe’s successful address
to a joint session of the U.S. Congress, the Diet’s passage of legislation to allow greater
military cooperation with the United States in some circumstances, and the signing of theTrans-Pacific Partnership were all historic steps forward.
However, as in any complex relationship between major countries, there are potential
points of difference. Part of our mission at Sasakawa USA is to identify these differences
and help find ways to address them. Russia presents a fascinating opportunity to do justthat.
The U.S. view of Russia is currently dominated by Russian aggression in Crimea, theUkraine, and Syria. Japan’s view is quite different. Despite a recent increase in violationsof Japanese air space by Russia, it is a relatively weak player in Asia; China poses a greater
threat to Japanese interests. Although Russia still occupies the Northern Territories it seizedfrom Japan at the end of World War II, Russia is a potential source of energy at a time
when most of Japan’s nuclear power plants remain closed.
As Princeton University’s Dr. Gil Rozman states in his excellent and comprehensive
introduction:
The recent relationship between Japan and Russia has defied conventional stereotypes.
It has also irritated U.S. officials at a time when the United States wants a united front
with Japan to confront Russia’s aggression in Ukraine, its non-cooperative approach tointervention in Syria, and signs that Moscow has revived Cold War thinking in its
military posture.

Last year, in partnership with the Carnegie Endowment for International Peace, Sasakawa
USA convened a conference to explore the triangular relationship among the United States,
Japan, and Russia. Economic and security experts, along with experienced diplomats fromall three countries, discussed the history of key issues and the prospects for progress.
This volume, edited by Dr. Rozman, is a result of that conference. It brings together
the analyses of conference participants, who describe an underdeveloped Japan-Russia
economic relationship, a series of ingenious but unsuccessful diplomatic and cartographic
attempts to divide the Northern Territories in a way that both countries could claim as awin, and very subtle signaling by Russia and Japan that their concerns about China may
present a margin for better relations with one another.
The conference highlighted differing assessments, objectives, and priorities about

viii PREFACE

Russia between the United States and Japan. However, there is low likelihood of progresson either Russia-Japan economic relations or the Northern Territories issues, and the U.S.Japan Alliance is capable of handling the issues without damage.

Adm. Dennis Blair, USN (ret.)		
Daniel Bob
Chairman and CEO			
Director of Programs and Senior Fellow
Sasakawa USA				Sasakawa USA

Introduction

Japan-Russia Relations under Abe and Putin:
Progress and Prospects
Gilbert Rozman

A breakthrough between Japan and Russia is being vigorously pursued in 2016. Sixty years
after the reestablishment of diplomatic relations between Tokyo and Moscow, there is a
prospect of a peace treaty and final resolution of their territorial dispute. Yet few have taken
notice or considered the ramifications. This volume takes the prospect seriously, while
recognizing the hurdles that stand in the way. It presents the insights of former diplomats
and specialists from Japan and Russia, adding a U.S. perspective on geopolitics, and, in thisintroduction, draws together arguments in the volume while assessing the prospects for abreakthrough. We seek to inform readers about what has taken place over the past three
years, and, even more, about the forces impacting this ongoing quest, whose strategic impact
in the wider great power context could be notable.
This diplomatic effort has drawn scant attention for at least three reasons: (1) listener
fatigue, after earlier Japanese media sensationalism about a breakthrough just around thecorner; (2) dearth of news on any progress over three years of talks; and (3) absence ofobvious preconditions, since impressions of Abe and Putin do not suggest that they would
be compromisers on territorial integrity and national identity, particularly as geopolitics andgeo-economics seem to be pulling them apart. By pointing to factors different from those
operating when hopes were dashed before, and conveying new information about RussoJapanese exchanges and expectations, we make the case for why it is time to pay close
attention, but with a sober outlook on conditions that complicate efforts to find an outcome
welcome to both sides.

Contents of the Volume
It is more than fifteen years since the Irkutsk summit, when optimism peaked for abreakthrough in Japanese-Russian relations. After years of stop-and-go hints that serious
talks would be resumed, always followed by mutual recriminations, Prime Minister Shinzo
Abe’s visit to Moscow to meet President Vladimir Putin on April 29–30, 2013 aroused
hopes anew. Despite deep skepticism from observers and new barriers to be overcome,due to unforeseen geopolitical and geo-economic forces, Abe has persisted in looking

2

INTRODUCTION

optimistically at this opportunity to work with Putin and conveying that message throughthose who work with him and Japan’s largest circulation newspaper, Yomiuri Shimbun. In
2016, anticipation in Japan is growing for Abe and Putin to address the three main areasthat will determine the future of Japan-Russian relations: the territorial dispute over fourislands and the peace treaty linked to it; the economic ties across the Sea of Japan, withenergy in the forefront; and the security framework for the Asia-Pacific region, with China
in the background. In light of the great importance of ever more adversarial U.S.-Russian
relations and recently unprecedented U.S.-Japan alliance coordination, the U.S. role mustnot be overlooked.
For a breakthrough to be reached, there must be a territorial agreement leading to apeace treaty. Russia is keen on an economic arrangement. Japan is increasingly focused on ageopolitical payoff. One can see, in the chapters that follow, divergent notions of how a deal
could be achieved. We should not forget also that Abe and Putin both have strong views on
how to reconstruct their countries’ national identities, and the transfer of territory cannot
help but arouse debate about what those national identities should be. After all, Japan’s lossof the islands plays a large role in its identity as a victim in 1945, while Russia has been
showcasing its role as a victor, claiming that its acquisition of the islands was the just fruitsof past sacrifices.
This volume begins with the joint response to the spring 2013 summit by two former
diplomats closely associated with the Irkutsk statement. At the time, they reflected on how
talks could build on the legacy of past negotiations and what would be necessary to strikean agreement. The article by Kazuhiko Togo and Alexander Panov appeared in Russianand Japanese on July 18, 2013; with this English translation, it gives us some insight into
how the Abe-Putin initiative was perceived at the outset. It is followed by chapters newly
written for this publication by Ambassadors Togo and Panov, assessing where the talks
stand and what, now, needs to be done. Part I of the volume also includes a contribution by
Keio University professor and Sasakawa USA distinguished non-resident fellow Tomohiko
Taniguchi, showcasing the enthusiasm for the talks in the Abe administration andanticipating vigorous diplomacy during 2016.
The overriding theme in these chapters is the search for a path forward. Togo draws
more on the legacy of past negotiations, explaining earlier failures by stressing the lessons
that can be learned to finish the quest, while Panov insists that the context is different,
due to new realities. Whereas Taniguchi is brimming with hope, Togo fears that Russia
has moved the goalposts amid new global geopolitics that make a deal rather unlikely, andPanov expresses outright pessimism, because Japan has not changed course given the newgeopolitical environment. Panov leaves the door slightly ajar for leaders to proceed, andTogo sees ample reason for them to do so. If Taniguchi’s vision of Abe’s eagerness is any
indication, Putin’s readiness to show flexibility would be the deciding variable in whether

INTRODUCTION

3

there will be a burst of fresh momentum in 2016 with the possibility of a breakthrough.
Serious problems stand in the way of progress, and tit-for-tat exchanges between officials
have not helped matters, but Taniguchi alerts us to strong intentions on the Japanese side,which presumably have been encouraged by Putin.
Part II of the volume is devoted to the geostrategic issues influencing the search fora breakthrough. Five chapters by authors in Russia, Japan, and the United States offer
widely divergent interpretations of how security is affecting the quest for an agreement.
In past coverage of talks between Moscow and Tokyo on normalization, the territorial
dispute and each side’s stance in dealing with it drew the bulk of attention. This time isdifferent: both sides appear to have imposed a taboo on media speculation about how theymight compromise, and no talks have been revealed that address what a compromise mightentail. Togo and Panov refer to the contours of a possible deal and the fact that differences
between the two sides remain a stumbling block, while other specialists on the two sides
are more inclined to write about the geopolitical context. The chapters by the director ofJapan studies at Moscow State Institute for International Relations, Dmitry Streltsov, andChuo University professor Yasuhiro Izumikawa have parallel titles and cover the U.S. andUkraine factors, concluding with assessments of how much strategic interests do or do not
overlap. A sharp difference is evident in the prominence Izumikawa gives to the China
factor, in contrast to Streltsov’s reluctance to present it as a source of strategic overlap. In thechapters by the Russian Academy of Science’s Georgy Toloraya and the Center for Analysisof Strategies and Technologies’ Vasili Kashin, there is more discussion of Russia broadening
ties in the Asia-Pacific region beyond China, without accepting Izumikawa’s position on
how strategic interests overlap in facing China. Drawing together the arguments in thesefour chapters and adding a viewpoint from the United States, Frank Januzzi, president
and CEO of The Maureen and Mike Mansfield Foundation, points to the gaps in Japan’sand Russia’s geostrategic thinking at a time when China unavoidably looms large incomplicating the search for a bilateral agreement. Yet Abe’s alarm about China, as well as
Putin’s anger at the United States, may bring them together in a manner Washington would
not welcome, as explained later in this introduction.
The two geo-economic chapters reflect recent challenges in driving relations forward.
Hirofumi Arai, director and senior research fellow at the Economic Research Institute forNortheast Asia, sees some prospects for an energy deal, although not the grand scheme fortransforming the Russian Far East that some suggested before global prices dropped sharply
and China gained the upper hand economically. Meanwhile, Alexander Gabuev, seniorassociate at the Carnegie Moscow Center, disagrees with some commentators who fault
the territorial dispute for the slow progress in advancing economic ties, placing much of theblame on problems on the Russian side. Japan might agree to a limited energy deal, but thatwould not be decisive in changing the climate for the Russian Far East. Any agreement is

4

INTRODUCTION

likely to have some economic component, and these chapters prepare us for grasping what
is now possible. Liquefied natural gas (LNG) would presumably be the main focus of any
economic deal.

The Significance of the Search for a BreakthroughThe recent relationship between Japan and Russia has defied conventional stereotypes.
It has also irritated U.S. officials at a time when the United States wants a united front
with Japan to confront Russia’s aggression in Ukraine, its non-cooperative approach tointervention in Syria, and signs that Moscow has revived Cold War thinking in its military
posture. Some Japanese argue that their country has an opportunity with Putin to resolvea longstanding, serious issue of little relevance to the problems U.S. officials cite, or eventhat Russia’s role in the Asia-Pacific region must be seen as separate from its role in otherregions. Divergent analyses of geopolitics are being tested. Russians make the case that theircountry can play a big role in stabilizing the Asia-Pacific region and that much-expanded
trade with Japan can be a powerful driving force for mutual trust. The arguments presented
by both sides tell a story of geopolitical illusions and frustrations, geo-economic promiseand failure, and increasingly divisive historical memories that, to date, overwhelm pragmatic
diplomacy. It does not follow, however, that U.S. opposition will prevent Japan from gutting
the weak sanctions it had imposed on Russia, given Tokyo’s focus on China as both ageopolitical and national identity threat, or that Russia will not be eager to use Japan todrive a wedge in U.S.-Japan relations.
The years 2013–15 witnessed spurts of optimism—especially from the Japanese side—
about the prospects for a breakthrough in Japan-Russia relations, but they were also marked
by bouts of pessimism—the gloomiest of which came only in the fall of 2015. Viewed
through the lens of Japan’s territorial demands; the development requirements of Russia’s
Far East, U.S., and Chinese strategic concerns; and global geopolitics and geo-economics;
prospects for an agreement would seem, today, to be more remote than earlier. However, we
would be remiss to ignore reasons why, surmounting many frustrations, the quest by Abe
and Putin continues in the face of both U.S. and Chinese concerns. Indeed, Japan started
2016 conveying a tone of optimism and of compromise.

The Case for a Breakthrough within Reach
under Abe and Putin
There are longstanding reasons, predating the 2010s, for Japanese and Russian leaders toreach an agreement to normalize their relationship with a territorial demarcation, a peace
treaty, and a sense of shared interests and common destiny. One reason is that, without theimage and substance of normalization, the two sides are at a disadvantage in great power

INTRODUCTION

5

maneuvering, losing leverage in balance of power politics. Given that Putin champions
multipolarity and Abe is eager for a more robust Asian foreign policy, the old arguments
have not lost their force. Another reason is that economic complementarity is seen to be
insufficiently realized, without normalization. With Russia dependent more than everon energy and natural resource exports—and conscious that Asian markets are the mostpromising—and with Japan, in the wake of the Fukushima nuclear reactor disaster, insearch of stable supplies of natural gas, assumptions of complementarity continue to bevoiced. Some boosters of closer relations have also made the case that the two countries,
in constructing national identities, look back to ambivalence about joining the West andforward to escaping the shadow of unsatisfying legacies of the Cold War era, and, therefore,
have parallels that could lead them to find mutual identity benefits. As polarization between
the U.S.-led West and the China-led East intensifies, both could stake out a position of
their own, reinforcing each other’s quest for greater autonomy. In Abe’s obsession withreconstructing Japan’s national identity after the dearth of pride in the postwar period andPutin’s obsession with reconstructing Russia’s national identity after the disaster of theSoviet Union’s collapse, the national identity card has more relevance.
The extreme versions of these arguments for a breakthrough have lost ground, but there
is still residual support for some version of them. Russia has drawn closer to China, while
Japan has tightened its U.S. alliance, but there are still geopolitical benefits in store from abilateral breakthrough. Russia has mainly hitched its Far East economic wagon to China,
and Japan’s economic clout is not the juggernaut perceived through the mid-1990s, but thegeo-economic case for closer ties has survived. Also, despite growing reticence to challenge
their two closest partners, especially in national identity terms, Abe and Putin are moredetermined than ever to forge distinctive identities, which is difficult in our times, without agreat power partner to boost leverage.
There is also a newer rationale for reaching a breakthrough. China’s rise has beensudden and transformative, leaving the two great powers in closest proximity to it withstronger balance of power justification, in the mid-2010s, for turning to each other. Japanesewritings alternatively insist that Russia must now be guided by that reasoning or that Japanis, implying that China’s aggressiveness toward Japan since 2012, and/or Russia’s isolation
since 2014, are reasons for a fresh approach to bilateral ties. Another new consideration isthat economic forces have now humbled both Japan, which in the 1990s was overconfident
in its leverage over Russia, and Russia, which to 2014 conceived of itself as an energy
superpower as prices kept rising. More modest economic outlooks can lead both sides toproceed realistically.
The stars appeared to be aligned in 2013 for a breakthrough in bilateral relations, if one
considers five factors that could be seen as preconditions: leadership, awareness of a sharedframework for the territorial dispute, regional geopolitics, bilateral economics, and national

6

INTRODUCTION

identity as understood by many in the elite on both sides. Never before had such an alignment
been present, even if neither side was ready to recognize its full scope, given each country’s
illusions about its diplomatic options and reluctance to strengthen the negotiating position of
the other. Failure to capitalize on previous, favorable alignments resulted in caution.
Leadership was the most widely cited reason for optimism. The assumption has
prevailed that Abe and Putin have the patriotic credentials to bring many along who would
normally be critics, that they are so securely established in power that both could act boldly,
and that the record of each when previously in charge revealed a priority for tackling thisrelationship. When Putin spoke of hikiwake and hajime to jumpstart talks, and Abe rallied
Japan behind his personal diplomacy with Putin, the leadership factor loomed especiallylarge.1 If other sources of optimism have receded sharply and Putin’s interest is more in
doubt, the one remaining source is Abe’s thinking, which may be captured in the rosecolored, start-of-the-year Yomiuri Shimbun article about Japan’s two diplomatic missions in
2016: show leadership at the May Ise-Shima G7 meeting, and intensify personal diplomacy
with Putin to reach a breakthrough (to be facilitated by Abe meeting Putin in the springand playing the role of bridge between Putin and the G7 in Ise-Shima).2 Having achieved
great success in his diplomacy in 2016, Abe appears to have prioritized a deal with Russia(North Korea and the abductions problem is another legacy issue, but he had to set it aside)and to have, despite evidence to the contrary, confidence he can achieve it. Whether driven
by his father’s unfinished agenda, the view that rapprochement with Russia is key to forging
a “normal Japan,” or an obsession with China that he thinks he has a way to counter, Aberemains highly determined and, apparently, has received encouragement.
Reminders that the Irkutsk summit of 2001 resulted in a framework described as “twoplus alpha” provided a second reason for optimism, although officials and media on bothsides were reluctant to acknowledge it for fear of either arousing a backlash at home oremboldening the other side to insist on a more favorable outcome. Actually, Japanese are
more apt to include the Irkutsk agreement in their assumptions that a framework exists,
while Russian commentaries deny this, insisting that a new framework must be forged. Twoarchitects of the Irkutsk agreement, Togo and Panov, disagree on this count. For Togo, thisframework remained the fallback position—and was actually developed further over thefollowing decade, but for Panov, when no new diplomatic proposals were forthcoming after
Japan turned its back on the agreement, the framework was gone.
Even so, interpreting Irkutsk as in line with previous offers by Moscow to transfer
two islands, Putin might be able to sell this to the Russian people, while Abe could claim

Hikiwake refers to a draw in a judo match (Putin has a black belt in judo), while hajime is the verbal command to“begin” in judo and other Japanese martial arts.
2
Yomiuri Shimbun. January 3, 2016. 3.
1

INTRODUCTION

7

that whatever arrangement for the other two islands or fisheries was reached as “alpha”
finally had put to rest this vexing territorial dispute, allowing Japan to turn its attention toother troubling matters. To those on both sides who did not recognize the existence of thisframework, there was little basis for optimism. There were enough persons, however, mainlyon the Japanese side, who accepted its existence to keep hopes alive that Abe and Putin
would finally reach a breakthrough. Without recognizing this unacknowledged and even
openly rejected framework, we would fail to grasp the dynamics now at work.
The geopolitical factor that did the most to raise expectations was the rise of China. For
Japan, Russia’s insistence that the objective of its “turn to the East” was multipolarity offeredassurance that Russia would not join with China to the exclusion of others. It seemed
reasonable to posit Japan as the second pole in East Asia, anticipating a degree of balance inRussia’s policies toward Beijing and Tokyo. For Russians, Japan’s poor relations with China
and rising concern over a “China threat,” served as the primary basis for any optimism thata breakthrough would follow. Even as Russia drew closer to China, there were many inJapan who argued that Russia would not be satisfied without another great power in East
Asia to serve as a partner. In turn, as Japan drew closer to the United States, some in Russia
argued it could not be content depending so heavily on one ally. The geopolitical argument
endured, even if it did not suggest a real balance of power. It has become more problematic,
but fear of a Sino-Russian alliance stirs Abe more than many outsiders, who hesitate to see
more than an “axis of convenience,” may realize.
Bilateral economics looked promising in 2013, when Japan was replacing nuclear power
after the Fukushima disaster and Russia was intent on developing its Far East, beginningwith new gas export agreements. High energy prices and close proximity revived hopesthat the complementarity of the two economies—now enhanced by energy plans gathering
force—would at last be a driving force for good relations. A showcase project, such as anenergy pipeline from Sakhalin to Hokkaido or an electricity bridge, could give Putin asymbolic success, especially amid the economic distress of 2016. The Russian need for apositive economic message has been growing.
While national identity is usually cited as a barrier to a breakthrough between
Tokyo and Moscow, as Putin and Abe proceeded in reconstructing the identities in theirrespective states, some argued that not only were some of their efforts symbiotic, but alsothat a breakthrough could serve their mutual objectives. After more than three decades of
insisting that the Northern Territories symbolize “abnormal” Japan, because Tokyo failed
to recover sovereignty, Japan’s leaders could attach great weight to the identity impact ofan agreement. Similarly, an agreement would help Putin solve a longstanding problem in
Russia of remaining distant from Asia, and affirm his insistence that Russia is no longer
just looking to the West. If closer Japan-U.S. and Sino-Russia ties left in doubt Putin’s claim to multilateralism and Abe’s quest for Asianism, then a boost to their bilateral ties

8

INTRODUCTION

could add some sense of balance to their evolving foreign relations.
In the June 2014 issue of the journal SEKAI, former ambassador Togo gave two
reasons for optimism: (1) geopolitics—with the earth-shaking transformation of theworld order centered on China, which is insisting on a civilizational clash with the Westbacked by its rapidly expanding military and its new, aggressive maritime strategy, and themortal danger for Japan if Russia is driven into the arms of China, as a result of what Togocalled the short-sighted geopolitical strategy of the West; and (2) national identity—thesimilar situations in Russia and Japan, both of which have embraced the West, at times,
but now stand at a crossroads under strong leaders intent on reasserting distinct national
identities. Togo urges Japan to persuade Russia of its intentions, while doing the minimum
necessary as part of the G7; stick to the Abe-Putin agreement aiming for a breakthrough in
relations; try to win the understanding of the world for its policy; and expand dialogue with
Russia on a new architecture for the world to encompass matters of both security
and civilization.3
Articles in Yomiuri Shimbun cited both territorial and geopolitical reasons for Abe topersist in pursuing Putin.4 Even as relations appeared troubled—Russian statements andofficial visits to the disputed islands, U.S. pressure on Abe to keep unity with the G7, andgeopolitical and geo-economic conditions by late 2015 being less favorable to a deal—Abe
did not reconsider. As an article in Bungei Shinju explained, despite repeated frustrations, hekeeps insisting that he will set a date for Putin to visit Japan and communicating optimism
to the Japanese media and Russian officials that a breakthrough is within reach.5
As an example of optimism, Yomiuri Shimbun, carried an article by the former prime
minister, Mori Yoshiro, stressing that Japan welcomes the development of the Russian
Far East. Mori, who has served as Abe’s emissary to Putin and who was the Japanese leader
in 2001 who had met with Putin at Irkutsk, recalls going to Moscow in February 2013
to sound Putin out on what was meant by “hikiwake,” and then in September 2014 at adifficult time in relations, again meeting with the Russian leader and answering thecharge that Japan is leaning too far to America with the explanation that only the UnitedStates will defend Japan against a nuclear missile. Mori proceeded to convey Putin’s
welcome to Japan in the Far East and to indicate that even if only part of the islands
are returned to Japan, 30–40 percent of the fishing grounds would be included. As fordescendants of former residents, they want to travel to graves, but it would be hard tolive on the islands, Mori asserted,6 implying that the Japanese position on the islands is
Togo, Kazuhiko. “Ukuraina no Gekishin to Nihon Gaikō no Kiro” [The Turbulence of Ukraine and the Crossroadsof Japan’s Foreign Policy]. SEKAI. June 2014. 45-52.
4
For synopses of the articles see The ASAN Forum. Country Report: Japan. 2012–14.
5
Ishikawa, Ichio and Akiko Iwata. “Abe, Putin ‘Himitsu Kosho’ o Akasu” [Revealing the Abe, Putin ‘Secret
Negotiations’]. Bungei Shunju. No. 1, 2016. 170–180.
6
Yomiuri Shimbun. January 26, 2016. 4.
3

INTRODUCTION

9flexible with an emphasis on fishing rights as “alpha.” This message on geo-economics anda territorial deal both prepares the Japanese public for concessions and signals flexibility to
Russia. By early March, plans for Abe to meet Putin in Sochi in late April or early May
were announced.

What Is Needed to Achieve a Breakthrough?
While Panov and Togo diverge in discussing the relevance of the 2001 framework, as theauthors of the 2013 document aimed at showing the way forward, they alert us to the needfor agreement on a framework, encompassing the objectives of both sides. Panov sees Japan’s
aims as two-fold: resolving the territorial impasse and denying close military ties between
Moscow and Beijing. The former he either denies or would reserve for late in negotiations.
The latter he ignores, but some may see a chance for a tacit understanding. As for Russia’saims, Panov emphasizes the need to change Russian public opinion, which not only requires
removing sanctions on Russia but also forging a security and economic image of Japan as adesirable partner. The security challenge is formidable, if Panov is correct in asserting thatJapan must discard its policy toward China and its support of the U.S. strategy in the region,
including missile defense. Interdependence to Panov also involves a new level of economic
relations, including investment and transfer of contemporary technology. Beyond thesedemands, Panov insists that Japan be first to compromise, since Putin would lose face if herepeated his 2001 offer, only to face another call for “four islands in a batch.”
The obvious stumbling block to an agreement, over the past sixty years, has beendifferent claims to territory. Japan has insisted on “four islands in a batch” and recognitionof its sovereignty, however pragmatically a compromise is concluded. Russia has veered
from no islands to two islands to be transferred to Japan under the right circumstances. If an
agreement is to be reached, the outcome is likely to be “two plus alpha.” Many ideas about“alpha” have been proposed, and one with appeal to Japan may be fishing rights, made moreurgent in 2016 by the loss of fishing grounds to Hokkaido residents after Russia imposed“environmental” restrictions. If Japan were to receive 40 percent of the rights to fish, owing
to the return of 7 percent of the land area (two islands), this might seal a deal.
Another reason to think a deal is possible is the personnel on the Japanese side whoare pursuing it, along with Abe’s strong commitment. Not only is Chikahito Harada of
the Ministry of Foreign Affairs pursuing Russia’s Deputy Minister of Foreign Affairs, Igor
Morgulov, with new intensity, but National Security Advisor Shotaro Yachi, after stunningsuccesses in reviving summitry with Chinese President Xi Jinping and negotiating the“comfort women” agreement between Abe and South Korean president Park Geun-hye, canbe expected to take charge. The fact that Russia has been unwilling to negotiate seriously, sofar, may relate to concern about leaks in the Japanese press. Leaks are something Moscow did
not have to consider when it made a territorial agreement with China in 2004, but that only

10

INTRODUCTION

suggests the likelihood of a grand bargain to be reached in one meeting, followed by talks
over some of the details. In light of no clear response, to date, to Putin’s 2000–01 hints about
reviving the 1956 plan, it seems that the ball is in the Japanese court for Abe to specify his“two plus alpha.”

The Case against a Breakthrough in the Foreseeable Future
Geopolitics, geo-economics, national identity incitement, and public opinion all have turnedmore negative with respect to a breakthrough, since early in the 2010s. Japan and Russia havedrawn much closer to countries more openly opposed to the other and less inclined to lookfavorably on a Japan-Russia rapprochement that would challenge their own foreign policy
priorities. Not only have recent Sino-American relations become a more serious barrier, but
shifting Sino-Japanese and Russo-American relations also pose serious geopolitical challenges.
The geopolitical situation in early 2016—the standoff in Ukraine, the divide over Syria, thegrowing tension in the South China Sea—makes it difficult for Abe and Putin to defy Obama
and Xi, respectively, and buck the increasingly polarizing tide.
Against the background of the worst Washington-Moscow relations since the endof the Cold War and the worst Tokyo-Beijing relations since normalization in 1972, the“Vladimir-Shinzo” bond, much ballyhooed in Japan, appeared increasingly out of step withthe solidarity demanded of the G7 following Russia’s aggression in Ukraine. It cast doubt
also on the newly touted Sino-Russian strategic coordination. Thus, the timing and purposeof this recent and ongoing quest for a breakthrough belie today’s geopolitics.
Indeed, only an exaggerated notion of Japan’s geopolitical weight (not evident in
Russia) can account for the expectations expressed in Japan about the impact of a deal: it
would turn Russia away from siding with China; it would lead Russia to accept Japan’s
more active military posture, including expanded missile defense with the United States andSouth Korea; and it would be the driving force for Russia to stop pressuring Japan and tocooperate, instead. As hopes for a favorable territorial deal fade, the geopolitical case isbeing oversold.
Geo-economics are not propitious for Putin to secure the substantial Japanese
investment in the Russian Far East he has sought or for Abe to make long-term deals.
Prices for oil and other commodities, including natural gas, have fallen precipitously.
The value of the ruble has been cut in half and appears to be falling further. Japan can findplentiful supplies of energy elsewhere, rather than commit to costly infrastructure plans
proposed by Russia. If the Russian Far East is the key to jumpstarting talks, as Yomiuri
Shimbun asserted at the end of 2015, then Japanese companies are showing no inclination toassist Abe’s cause.7 Apart from government ties, there is no clamoring for any deal.
7

Yomiuri Shimbun. December 23, 2015. 4.

INTRODUCTION

11

National identities have been aroused by Putin and Abe in ways that do not bodewell for concessions on a territorial dispute. Previously, Japanese were prone to cite theintensity of emotions about the Northern Territories to Russians to explain how hard it
would be to abandon their demand for “four islands in a batch.” Aware that their Senkaku
and Takeshima identity claims are being challenged, the Japanese people may not welcome
the concessions Abe would make. Even more so in the aftermath of the Crimean andUkraine crises, Russians are hypersensitive to territorial sovereignty. Their recent mood isless favorable to the talks, than in 2012. If the Japanese public cares less about the islands
and the Russian public is aroused, the outcome is likely to favor Russia. Thus, Abe would
have to make a different case for national identity, presumably combining the value of
putting to rest an issue that has long troubled Japan and the merits of Japan taking the leadin countering China’s challenge to its identity. Abe may believe that his strong identity
credentials will suffice and that Putin can use his credentials for this end.
Public opinion in Japan and Russia stands in the way of signing a peace treaty and fully
normalizing relations more than seventy years after the end of WWII. Both have aroused
the public against the other side, and then used the public’s resistance to a compromisearrangement for diplomatic purposes. In 2001–02, it was the Japanese side that insisted
negotiations on the basis of the 2001 Irkutsk agreement were not worth pursuing, owing toJapanese public opinion. Today, it is the Russian side that says no public diplomacy over the
territorial question is possible, due to its public’s hardened attitudes.8 Elements of national
identity on each side have failed to align with each other to make negotiations promising.
For example, in a multi-nation, public opinion poll released on October 20, 2015, 20 percent
of Japanese respondents considered Russia’s behavior to be responsible on questions ofinternational relations, and 60 percent did not, with 20 percent undecided; only 10 percent
of Japanese respondents wanted Russia to take an international leadership role. Given thewide gap in attitudes on the two sides regarding the international roles of China and theUnited States, there is little prospect of finding common ground on global affairs.9

Implications for U.S.-Japan Relations
Relations between Washington and Moscow have deteriorated sharply on all fronts: inEastern Europe where there is on-again, off-again fighting in Ukraine and fear of Russian
aggression in other parts of the former Soviet Union; in the Middle East where there is a
confrontation in Syria going beyond a proxy war as well as pairing off with rival regional

Sankei Shimbun. October 15, 2015. 1.
Kudō, Yasushi. “Nichibeichukan 4kakoku Kyodo Yoron Chosa” [Japan, U.S., China, South Korea 4 Countries’
Joint Public Opinion Survey]. Genron NPO. October 20, 2015. Accessed March 1, 2016. www.genron-npo.net/
world/archives/6002.html.
8
9

12

INTRODUCTION

powers; and in other theaters where Cold War-like testing of boundaries has resumed. For
two years, the U.S. message to Japan has been to maintain a united front against Moscow
and to join in sending it a clear message that its behavior is unacceptable and will be met
with serious consequences. The United States has found Japan’s response inadequate,
leading to tense exchanges in an otherwise close alliance. While imposing sanctions as partof the G7, Japan has made its reluctance clear, while sending the message that sanctions
were imposed under U.S. pressure and are rather minimal. Hovering over the alliance isthe prospect of Japan unilaterally gutting its sanctions as Abe cuts a deal with Putin, which
would be seen as undermining the G7 consensus.
Mostly under the radar to date, a U.S-Japan split over Russia could complicate thealliance in at least three ways. First, it would bring to the surface charges that past U.S.
pressure has had the hegemonic objective of denying Japan an independent voice in theinternational arena. Those charges include supposedly blocking a peace treaty in the
mid-1950s by pressing the Japanese to demand four islands, not two, from Moscow, andopposing a territorial deal since the end of the Cold War. Never mind that the evidence
for U.S. responsibility in 1956 is exaggerated, if not in great doubt; that in the 1990s andbeyond, Washington was eager for Tokyo and Moscow to reach an agreement on whatever
terms they chose for the territorial demarcation; and that U.S. concern, today, centers on
the impact on sanctions, not on keeping Japan dependent. Grievances about an unequal
relationship are too raw in Japan—as Abe showcases national identity themes and therevival of “normal Japan”—to be suppressed, if a serious dispute over foreign policy rises tothe forefront.
Second, a split over Russia would test how much agreement there is over the ideal of
the international community and global responsibility. There remains concern outside Japanthat a combination of pacifism from the left and narrow-minded Asianism from the right
has left Japanese with a limited degree of internationalism—that is, a sense of responsibility
for resolving problems around the world. In arguing that the Asia-Pacific arena should betreated separately from the global arena, Japan could be exacerbating this concern.
Third, at the core of U.S.-Japan divergence are different geopolitical analyses of the
Sino-Russian relationship and of China’s foreign policy. The prevailing Japanese outlook
appears to be that the Sino-Russian relationship is not very strong and can be limited bymoves such as Japan’s overtures to Russia. The predominant U.S. assessment is that China
and Russia have a solid relationship, which Japan has little leverage to influence. Moreover,Japan’s thinking about China is more alarmist, steeped in concern about demonization ofJapan’s national identity, while U.S. analysis foresees a mix of competition and cooperation
still present, expecting difficulties with China in 2016 centered on the South China Sea, but
no sharp downturn in relations as some areas of cooperation go forward. In this divergence,
Tokyo is concerned that Washington is too soft on China and too hard on Russia, while

INTRODUCTION

13

U.S. concerns are the reverse. Thus, there is a quadrangular character to the U.S.-Japan split.
Despite the negative impact of a Japan-Russia breakthrough on U.S.-Japan trust, Japan
may be counting on the fact that the impact will be limited due to the inherent strength in
the U.S.-Japan relationship and the shared need, among all three countries, to face China.
Abe may also be looking beyond Obama in 2017 to reset relations. In turn, Putin may
anticipate little cost in Sino-Russian relations, although he may need to shore up ties withXi Jinping in some tangible manner. Abe’s defiance of Obama will be the main story, notPutin’s signal that Russia would likely stay aloof from the Senkaku/Diaoyu issue and reallydo little else to cause concern in Beijing.

Conclusion
The persistent search for a breakthrough in Japan-Russia relations is an enigma, due tomedia taboos on both sides as well as the sense that neither Putin, whose 2012 appeal
became the starting point, nor Abe, whose initiative has driven diplomacy so far, hasconveyed his views beyond vague generalities. It is unknown whether the territorial issue
or geopolitics is Abe’s priority. Putin’s intentions are clouded in mystery. The result is no
preparation on either side for a deal and almost no strategic thinking communicated in
the media. Into this void, some Japanese media, echoing Abe’s thinking, convey a vapid
optimism, and Russian media, with no clarity from Putin, convey unremitting pessimism.
A breakthrough depends on a series of developments that seemed remote at the startof 2016. But the will of two determined leaders concerned about marginalization in Asia is
the unknown variable that could surprise doubters in their countries and across the world.
For an Abe-Putin breakthrough to occur, three things are needed above all: (1) a trade-offof geo-economic benefits for Russia for geopolitical benefits for Japan; (2) dual national
identity claims—for Japan a resolution to the territorial dispute with “two plus alpha,”offering a symbolic value to alpha that counters charges against acquiescing to a deal longrejected, and for Russia evidence that the “turn to the East” boosts multipolarity and a new
identity separate from the West; and (3) determination to defy their closest partners, as
Moscow expresses dissatisfaction with Beijing’s economic stinginess and Tokyo dares to defy
U.S. appeals for G7 solidarity, clarifying that it has its own Asian foreign policy.
The Japan-U.S. split is not about a deal on the territorial dispute. It is about great
power relations and what will be conducive to peace and stability in the coming decade.
For Abe’s security coterie, a new Japan-Russia relationship would strengthen the balance ofpower in Asia. For Obama and many in the U.S. security apparatus, it would have no suchimpact and, more likely, would split the international community and embolden Putin tocontinue to use the “China card.” The Abe camp anticipates a new Asian order, denying
China domination. The U.S. fear is, not only would the Asian order not change in themanner Japan expects, but also that the global order would be damaged. At the root of this14

INTRODUCTION

divide in strategic thinking are different assessments of Putin’s intentions, of Sino-Russian
relations, and of Japan’s potential to orchestrate a shift in great power dynamics. Should Abe
and Putin draw closer, these U.S. concerns are likely to be aired more fully.

PART ITHE FRAMEWORKFOR JAPAN-RUSSIA
NEGOTIATIONS,RELATIONS IN 2012–15,
AND PROSPECTS

Chapter 1

Carte Blanche:
Absence of a Peace Treaty—
Abnormal Situation
Alexander Panov and Kazuhiko Togo

Nezavisimaya Gazeta, July 18, 2013
The meeting of the president of the Russian Federation, Vladimir Putin, and the prime
minister of Japan, Shinzo Abe, in Moscow was a success on many levels. The leaders of
the two countries agreed that Russo-Japanese relations are of a friendly character andhave good preconditions for forging a strategic partnership. Moreover, it was recognizedthat the absence of a peace treaty between Russia and Japan, sixty-seven years after theend of WWII, is an abnormal situation. In this regard, they expressed determination to
overcome, in the context of negotiations, divisions in their positions and to conclude a peace
treaty, which they would finally resolve in a mutually acceptable manner. They reached anagreement that such negotiations will be facilitated through the efforts of the two sides toactively develop bilateral relations. These agreements have to be a cause for satisfaction.
After an interruption of more than ten years, negotiations on a peace treaty will receive a
concrete impulse to proceed in search of a mutually acceptable compromise on the problemof territorial demarcation.
We would like to share some thoughts regarding the conditions that are necessary forsuccessfully conducting the forthcoming negotiations.
First, we should start from the expectation that negotiations will be long and tense. It is
impossible to expect that both leaders will make the same decision about how to resolve theterritorial demarcation problem. It follows, therefore, that expectations for a quick decision
should be restrained, and there should be no attempts to artificially force the negotiatingprocess.
Second, it follows that the negotiations, themselves, should be conducted exclusively in
confidence, not allowing leakage of the discussed variants of the decision on the territorial
problem. This is necessary in order to avoid distortions and interpretations that could only
arouse public opinion in the two countries and play a destructive role.

18

JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

Third, besides official channels of negotiations through the ministries of foreign affairs,
it is advisable to establish unofficial channels. We have in mind that the leaders of the twocountries designate trusted individuals, who do not have official status, but who can conductprobes of specified variants for resolving the problem, without any obligation and without
attracting outside attention. A successful experience of using a similar, unofficial channel
took place in negotiations between the Soviet Union and West Germany in concluding thehistoric Moscow agreement of 1970.
Fourth, all-around improvement in bilateral relations will have more significance if
the publics of the two countries are persuaded that Russia and Japan do not have serious
contradictions and conflicts in their national interests, at present, and will not in theforeseeable future. Removal of the final barrier in the form of the territorial question would
have historic importance in forging a new era of relations between “eternal neighbors.”
Fifth, it follows that we should refrain from advancing the pet arguments of individual
political figures and political scientists about which country is more interested in realizing
the territorial demarcation and, therefore, should make “unavoidable” concessions.
With regard to possible variants in their positions on how to conclude a peace treaty, atpresent, although the sides have not declared their starting positions, it is apparent that theconceptual approaches of Moscow and Tokyo fundamentally diverge.
The Russian side, in 2001, at the Irkutsk talks proposed to resolve the problem of
the peace treaty on the basis of the ninth statute of the Joint Declaration of 1956. The
Japanese side did not accept this proposal. Although Japan advanced the position that it
would not press for the simultaneous return of four islands, it would not change its position
that the islands belong to Japan and that it could reach a compromise only on the timing
and conditions of their return. Just after this discussion, the talks were halted. Thus, thequestion remains, is the Russian side ready to repeat its proposal of 2001 and insist that,after the conclusion of a peace treaty, as envisioned in the ninth statute, two islands would
be transferred to Japan, and that return would signify the final resolution of the territorial
problem?
Juxtaposing the positions of the countries, one must conclude that it is not possible toreach a mutually acceptable agreement. Therefore, it is advisable, at the first stage of thetalks, to reexamine all of the variants proposed by the two sides for resolving the problem,in order to clarify why they were not accepted by one or the other side. At the same time,
as suggested above, it may be possible, through confidential channels, to conduct unofficial
probes of the positions to determine a direction in which the talks could go forward. One
solution could be that the two sides agree to begin the talks in accord with the ninth statuteof the Joint Declaration of 1956, which foresees the transfer of Shikotan and HabomaiIslands to Japan, after the signing of a peace treaty.
Besides achieving agreement on the principal problems, talks could proceed, in parallel,

ABSENCE OF A PEACE TREATY

19

on the establishment of a joint special economic zone on Kunashir and Iturup Islands, withlegal status acceptable to both sides. We note that a similar Russian proposal was advanced
during Prime Minister Keizo Obuchi’s visit to Moscow in November 1998.
In the course of negotiations, of course, differences in positions will arise, demandinga search for mutually acceptable compromises. But without frank discussion, finding
agreement is impossible. These proposals could arouse criticism and even unpleasantness.
However, it is obvious that, at present, nobody possesses a “magic formula” for resolving the
problem of a peace treaty. It is not an accident that Prime Minister Abe, after his talks in
Moscow, said, “There does not exist a sorcerer’s wand with one wave of which everything
would be decided.”
A full translation of this article appeared in Asahi Shimbun on July 18, 2013. The following day, Tokyo
Shimbun carried a long summary of its contents. After the April 29 Moscow summit of Abe and Putin,
this joint presentation served as a “kick-off ” for the anticipated media discussion of how a diplomatic
breakthrough might be reached and as a prod by veteran diplomats to jumpstart talks for that purpose.

Chapter 2

Japan-Russia Relationsin the Mid-2010s:
Collapsing Framework,
and A Way Forward
A View from Japan
Kazuhiko Togo

The mid-2010s have been a tumultuous time for Japan-Russia relations, as Japanese Prime
Minister Shinzo Abe and Russian President Vladimir Putin have raised expectations but
not succeeded with any concrete steps toward a breakthrough. The past seventy years, since
the fateful days at the end of World War II, have witnessed periodic attempts to set the pastaside and find a shared path forward as neighbors with overlapping and complementaryinterests. Adapting to the postwar international situation after the conclusion of the San
Francisco Peace Treaty of 1951, Japan and the Soviet Union concluded a 1956 Joint
Declaration, after which the four islands remained the only serious political issue dividing
them. At a time of shared interest in developing Siberia and the Russian Far East, the1970s saw joint exploration projects of Siberian resources and even, for a short while, Japan
becoming the number one trade partner of the Soviet Union, among industrialized nations.
Despite the image that prevailed in the late 1980s of Moscow and Tokyo having the worst
relations between great powers, diplomats, politicians, and academics kept seeking signsof a turnabout.
After the end of the Cold War in 1989, expectations rose on both sides that finallythey would be able to overcome their differences and develop dynamically what they sharein common: economic relations boosted by Russia’s turn to a market economy, security
relations driven by the urgency of stability in Northeast Asia, and even common interestsand identities as countries searching for a new model of development and Asian regionalism.
In addition, Japan became the third-leading donor country, with global economic assistancetotaling $6 billion. A new economic package was proposed as the Hashimoto-Yeltsin Planof 1997, and another one as Abe’s plan to develop Siberia and the Russian Far East in 2007.

22JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

Even on security relations, regular exchanges developed between the two defense institutions.
Periodically, there was talk that a breakthrough was within reach, and it resurfaced with the“Vladimir-Shinzo” personal connection, celebrated in 2013. Long hiatuses left the prospects
for resumption of negotiations uncertain, but on both sides hope persisted.
Failure to reach a substantive agreement over so many decades cast a shadow that has
hovered over the recent revival of diplomatic momentum. Much has been written about
the on-again, off-again talks to resolve the dispute over four islands. From the late 1980s,
every time it looked as if the perspective was bright, something happened to derail the talks.
Again in 2013–15, leaders appeared to be ready for serious bargaining, even if others warnedof what might still go wrong. At the start of 2016, the two sides seem to stand at the worst
point in negotiations since Gorbachev, thirty years ago, began implementing perestroika
and “new thinking” diplomacy. The negotiations on the four islands issue, judging fromall available public reporting, stand roughly as they did at the nadir of the Cold War in
the second half of the 1970s. While Abe and Putin are again talking about meeting tojumpstart negotiations, the mood has turned more somber.
This chapter puts the hopes and disappointments of the mid-2010s in historicalcontext. It explores the framework that has guided negotiations, the reasons why it has not
succeeded, ideas for reactivating the talks, and even what a possible, successful agreement
would look like. This background can help to put revived talks in a more sustainable
framework, even if the current context is rather sobering.

Framework Guiding the Negotiations
The two sides seem to have lost completely the common framework to advance theterritorial negotiations. In the period after Gorbachev came to power in 1985, and forabout thirty years afterward, the two sides made serious, on the whole continuous, efforts
to establish and strengthen this common framework with a view to finding a solution to
the four islands issue. The solution was not found, but the framework was strengthened.
First, there were the years of establishing the initial framework, including the 1991 KaifuGorbachev communiqué and the 1993 Hosokawa-Yeltsin Declaration (Tokyo Declaration).
The two sides acknowledged, in writing, that the four islands issue exists and needs to beresolved. Second, there was the Hashimoto-Yeltsin Krasnoyarsk agreement of 1997 inwhich the two sides agreed to do their best to conclude a peace treaty by the end of 2000,
with an understanding that the four islands issue were at the center of negotiations.
Japan’s concessionary proposal at Kawana in April 1998 and the Russian concessionary
proposal in Moscow in November 1998 should be understood within this framework.
Both sides appeared in an upbeat mood and ready to compromise. There were setbacks in
the late 1980s and 1990s as the process of forging a framework stalled—opportunities
were missed, but the framework was slowly growing clearer.

VIEW FROM JAPAN ON JAPAN-RUSSIA RELATIONS

23

Third, there was the Irkutsk agreement of March 2001 in which the two sides
recognized the 1956 Joint Declaration and 1993 Tokyo Declaration, simultaneously, andparallel negotiations on the islands of Kunashiri-Etorofu and Habomai-Shikotan wereabout to start. The two sides were close to agreeing on an overall framework for intensified
talks. Indeed, when efforts were later made, especially in 2012–15, to resume the processof normalization, the understandings reached at Irkutsk were cited, reflecting progress overmany years.
Fourth, there was a fuzzy period from December 2006 until May 2009 when the twosides might have entertained an idea to cut the territorial space in question into specificportions (for example, half and half, or three islands to Japan and Etorofu to Russia). That
proposal reflected a possible shift to a new level of specificity, but it did not become fixedin any new framework. Fifth, there was the dramatic statement by Prime Minister Putin
on March 1, 2012, to the correspondents of the G8 countries that, “After my reelection
as president of Russia, Russia and Japan need to do two things. To develop substantially
economic relations and resolve the territorial issue with the principle of a “draw” (hikiwake).”He even defined what he meant by a draw—that “neither side loses.” This statement gave
new impetus to diplomacy, reviving interest in the existing framework.

Possible Reasons for the Framework Collapsing
After thirty years of mutual efforts trying to bring the position of the two sides closer, why
did Russia change its position and revert to Gromyko’s position of the late 1970s? This shift
occurred in 2015, becoming unmistakable in statements made in September. Insistencethat there is no territorial issue and that the outcome of World War II settled the territorial
question is a position Japan heard forcefully from the latter part of the 1970s, under
Gromyko, until Gorbachev assumed power in 1985. Reversion to this way of thinking putsin serious doubt the entire framework that was built over three decades.
Several hypotheses can be suggested. First, Russia sees willingness on the part of Abe tocontinue negotiations on the four islands issue and, hence, readiness to take a less antagonist
policy toward Russia than other G7 countries. Russia also sees a great opportunity tosqueeze Japan and determine to what extent Japan is willing to concede. Explicitly toughstatements are there to gauge Abe’s seriousness on Japan-Russia relations and on the extent
of his readiness for a concessionary agreement. But this hypothesis may be problematic.
Why should Abe appear so weak as to be likely to concede to Russia at all costs? Is China
so terrifying or the Russia-China axis so threatening that Abe is tempted to make suchconcessions? Is it not the case that Abe’s determination to resolve the territorial issue isbased on his desire to gain a sense of justice to replace the lingering feeling of humiliation
suffered at the end of World War II, but to do it with sufficient realism and sense ofcompromise, characteristic of his father, Shintaro Abe, in his policy toward Gorbachev? If

24JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

that is the case, the China factor is a valid reason to trigger Abe’s resolve, but it is clearly notenough to force him to make unwarranted concessions.
Second, President Obama’s administration is openly irritated by Abe’s overt willingness
to continue dialogue with Russia. This is a golden opportunity to drive a wedge between
Japan and the United States. Putin can mix a friendly approach, such as visiting Japan, anda tough approach, such as his cabinet members visiting one or more of the four islands, or
his foreign ministry officials making tough public statements, while inducing Abe to takeactions, which may irritate the American side. But again, this wedge hypothesis may also be
problematic. To be sure, Russian-American relations soured greatly after Obama’s complete
denial of Putin’s Crimea-Ukraine policy, but Moscow’s hostility has been primarily directed
at the United States. Is there some realistic reason for Putin to expect that an effective
wedge between the United States and Japan would succeed in making Russia’s position
stronger vis-à-vis the United States? It is unlikely that Japan’s relatively small international
political power could let Russia play an effective wedge role between the other two powers.
Third, there may be more fundamental reasons than those two tactical ones pertaining
to bilateral negotiations or to relations with the United States. The issue of Crimea andUkraine has profound implications for Russian history and geopolitics. Kiev is the originof Russia for all students engaged in the study of Russian history. Crimea, with its history
dating back to the Crimean Cossacks and the battle of Sevastopol in the Crimean War of
1853–56, left an enduring, tragic legend of modern warfare seen through the lens of Russian
national dignity. More importantly, through the whole course of Russian modern history,
through World War I and World War II in particular, Ukraine occupied an importantgeopolitical position as a crucial buffer between Russia and Europe. Russia simply could notafford a Ukraine adversarial to Russia and bent exclusively toward Europe. The economic
and political confusion, which did not cease even after twenty years of independence,
offered an opportunity for Russia to find a solution in its own favor, after the Ukraine
political turmoil from November 2013 and, finally, after the Maidan explosion of February
18–21, 2014. Regaining Crimea and ensuring a buffer state in Ukraine, which at least
includes several eastern provinces and Kiev, became a matter of survival, honor, and dignity
for Russia.
Sanctions so incensed Russia because of a strong sense of the justice of its cause. Japan’s
participation in four economic sanctions, from March to September 2014, even if they werecarried out with minimal content, shows a profound lack of understanding of Russian corevalues, both historical and political. Under the circumstances, how could Russia resolve
the territorial issue by making a concessionary decision to bring the situation to a “draw”?
Thus, since September 2014, any prospect of envisioning a peace treaty with a resolution of
the four islands issue based on a “draw” ended. Deputy Foreign Minister Igor Margulov’s
statement on September 2, 2015, to the effect that the territorial issue was resolved seventy

VIEW FROM JAPAN ON JAPAN-RUSSIA RELATIONS

25

years ago and Russia has no intention to negotiate it with Japan, is the clearest and mostcorrect description of the existing state of negotiations between the two countries.

Reactivating the Negotiations: New Developments?
At the time of this writing in early 2016, there is no likelihood for the two countries toresolve the territorial dispute. The position taken by Abe to pursue in a quiet manner Japan’s
dual political objectives—on the one hand, to uphold common values as a G7 country
and, on the other hand, to ensure that relations with Russia improve, even to the extent of
resolving the territorial issue—did not work. This position, in all likelihood, was understoodin Russia as a message that Japan and Russia, fundamentally, do not share common values
and interests. In fact, looking back at Japan-Russia relations of the last seventy years, thethirty-year period from 1985 to 2015 can be characterized, in the most essential way, asa time when Japan and Russia did share the same values and interests. If that situation ofshared interests does not come back, in all likelihood there is no way that Japan and Russia
will stand on the same track to resolve the territorial issue. Will there be a possibility thatthe common track will be re-established? This is an intellectually challenging question, towhich I can present, at least, the following three scenarios.
First, in a situation in which both Russia and the United States do not change, Japanchanges its position. Japan might put aside, for the time being, any aspirations for resolving
the territorial dispute, and begin arguing solely from the perspective of geopolitics andJapan’s national interests. This argument might proceed along the following line: For
Japan, and possibly East Asian countries, if not the world, the single greatest threat is
China and not Russia. Japan’s primary attention, therefore, in its foreign-security-defense
policy is China, and Japan needs to do everything necessary to face China with a policy ofdeterrence and dialogue. But from this perspective, the wisest policy for the G7 is to keep
Russia within its friendly circle, and to treat Russia with respect as a great power in theinternational arena. For this, it is rational and justifiable to recognize the historical bond
between Russia and Crimea and the geopolitical necessity of seeing Ukraine as a buffer state
between Russia and Europe. These should be common goals of the G7 for their strategicinterests, and Japan should take a leadership position toward that direction. As the first step,
Japan might withdraw from the present sanctions against Russia.
If Abe is able to reformulate his policy in this manner, sometime in the not-too-distantfuture the conditions would emerge to redefine a common framework for negotiations.
The second scenario is that Russia and Japan do not change, but America changes.
If a president Hillary Clinton (at this writing, the likely 2016 Democratic nominee), a
Republican president, or even possibly Obama reassesses the comparative geopolitical threat
from the Asian dragon and the Eurasian bear, and concludes that the United States needs totake a more realist, geopolitical approach, the European architecture—as it emerged in 1991

26

JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

as the result of the unilateral collapse of the Soviet Union—should not be interpreted as asacred, binding structure that does not allow reshuffling based on history and geopolitics.
In fact, American political scientist John Mearsheimer came up with an analysis close tothis. The Minsk agreement is increasingly becoming a realistic starting point for all parties,
allowing them to come to some terms, despite differences. The exacerbated situation in the
Middle East under the rage of ISIS’s terror has opened further space for Putin. All these
conditions might become reasons to adopt a more flexible policy toward Putin. In thatsituation, pressure from the United States, which so far has constrained progress in JapanRussia negotiations, may well be lifted substantially.
The third scenario is that America and Japan do not change, but Russia changes.
Russia’s economic, political, domestic, and international positions are not easy. Russia hadturned toward China in 2014, but its oil and natural gas trade with China is not bringing
the benefits that were expected. China, itself, after its stock market collapse, may not be as
powerful as once expected. Reports are increasing in early 2016 that Russian companies
have begun to suffer from a liquidity shortage and wage suspensions, resulting from thecollapse of oil prices and from economic sanctions.1 In a situation in which the West shifted
its attention almost exclusively to Ukraine and not to Crimea, Putin should find a way
to take heat off the eastern provinces, to introduce reasonable supplies of oil to Ukraine,and to cooperate with Europe and America to stabilize Ukraine and make it a friendly
country toward Russia, Europe, and America. Again, changing Russia’s position in theWest may well redefine a common framework for negotiations between Japan and Russia.
This scenario, like either of the others, would create much more conducive conditions for abreakthrough in Russia-Japan relations. At this time, however, none appears likely, nor does
progress in 2016 between Japan and Russia.

Reviving the Framework and Finding a
Scenario for a BreakthroughIn case the political environment that surrounds Japan and Russia improves and there
re-emerges the possibility for conducting serious negotiations, what kind of solution could
there be to achieve a substantial breakthrough? As the result of thirty years of negotiations,
I do think that a rough picture of that solution has already emerged. First, the criterion
that Putin put forward that the solution has to be a “draw,” where neither side loses, must
be applied, as has been the case in all serious and successful negotiations that we see in thehistory of diplomacy.
Second, then what is this “draw”? The answer seems to be reasonably clear: it shouldbe the so-called “two plus alpha” solution. Why? Because what Japan is requesting is
1“Wages Are Not Paid as Agreed in Contracts in Russia.” Asahi Shimbun. January 20, 2016.

VIEW FROM JAPAN ON JAPAN-RUSSIA RELATIONS

27

four islands, and what Russia has agreed to transfer is two islands. Both sides might havereservations on this score. The Russian side may well argue that its original position waszero, and two was the maximum possible concession, which it had already made in 1956,
and there is not an inch of further concession. But the Japanese side may well argue
that, based on the principle of territorial non-aggrandizement prescribed in the Cairo
Declaration and the Potsdam Declaration, Japan has a full right to the entirety of the Kuril
Islands, and a four islands solution is already a “draw,” from which Japan cannot deviate,
even an inch. While acknowledging the difficulty of this issue, I simply draw on theformat that was nearly agreed to in Irkutsk to conduct parallel negotiations on Kunashiri
and Etorofu on the one side, and Habomai and Shikotan on the other. In accord with thegenerally accepted practice of diplomacy, some compromise solution may turn out from theKunashiri and Etorofu channel, which would be labeled “alpha.”
Third, then what “alpha” can there be? When Abe and Putin seemed to have madea promising start with Abe’s April 2013 visit to Moscow, then-Russian Ambassador
Alexander Panov and I exchanged ideas from May to July to give an example of this “alpha.”
The result of this joint effort was published in Nezavisimaya Gazeta on July 19, 2013, andreported on the same day in Asahi Shimbun, with the full, translated text in Digital Asahi.
The gist of this joint proposal was to achieve the transfer of Habomai and Shikotan to
Japan, as prescribed in the 1956 Joint Declaration, and to establish a special joint economic
zone on Kunashiri and Etorofu, with a special joint-legal status acceptable to both.
Panov and I did not come to this joint proposal out of the blue. As the last proposal
made by the Russian side under President Yeltsin, the suggestion of establishing a joint
economic zone, where a joint legal structure may be introduced, had already been made in
November 1998 in Moscow to Prime Minister Keizo Obuchi. After Putin assumed his
post, it is well known that he became the first president who officially acknowledged the1956 Joint Declaration, after Gromyko denied its implementation in 1960. The PanovTogo joint proposal was based on these two developments, which took place in the course of
the negotiations. That this joint proposal is just an idea of what could be, alerts us to manyother variations of “alpha,” which, in fact, have never been officially discussed between the
two administrations.2

Lessons from When the Relationship Has
Been Closest and Furthest
Before the end of the Cold War, there were periods when Japan and Russia were close.
First, there was 1955–56, when we negotiated and agreed on the Joint Declaration under2

Togo, Kazuhiko. Kiki no Gaikō [Diplomacy in Crisis]. (Tokyo: Kadokawa Shinsho, 2015). 195–200.

28JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

the general international situation of “thaw” and de-Stalinization. Second, we were closefrom 1972–73, when Prime Minister Tanaka made his overture to General Secretary
Brezhnev, under the general international situation of détente. After Gorbachev assumed
the post of general secretary of the Communist Party of the Soviet Union (CPSU) in 1985,
there were five periods of opportunity, as enumerated earlier in this chapter: 1991–93, when
Gorbachev and Yeltsin visited Tokyo; 1997–98, the height of the Hashimoto-Yeltsin years;
Putin’s encounter with then-Japanese Prime Minister Yoshiro Mori at Irkutsk in 2001;
fuzzy exchanges in 2006–09; and, finally, two years from March 2012 until February 2014.
There was a sense of common values and interests, strategically, economically, and evenhistorically in reestablishing each country with a new profile in Asia.
As a result, Russia as well as Japan expected to gain more of a bridging role between
the West and Asia. A case in point was in March 1992, in the wake of the fall of the Soviet
Union. Yeltsin’s administration was fully engaged and expected to strengthen its relations
with Western countries, inclusive of Japan. Foreign Minister Andrei Kozyrev visited
Tokyo that month and made what has been called a “non-existing confidential proposal,”
whose content was kept totally confidential for a long time, but recently, the Russian sidehas begun to disclose it, and both sides have been citing its contents. The memory of
the Japanese side goes as follows: “…to start by negotiating the question of transferring
Habomai and Shikotan, and once an agreement is made, the text of the agreement totransfer these islands should be formulated; then to negotiate the issue of Kunashiri andEtorofu in line with that agreement on Habomai and Shikotan; and once an agreement
was reached on Kunashiri and Etorofu, to conclude a peace treaty to resolve the fourislands issue.”3 Given the fact that this was the period when Japan and Russia most clearlyshared common values, and Japan’s economic might was at its highest, whereas Russia wassuffering from the impact of the fall of the Soviet Union, one might surmise that it was theclosest point to a breakthrough in the negotiations. But then Japan’s leadership considered
the Russian proposal insufficient as a basis of the negotiations, because the “shadow ofKunashiri and Etorofu” was too weak. Only after Japan further reflected on this inability to
grasp that occasion, it was in March 2001 at Irkutsk that the two sides were able to narrow
their differences and explore a shared framework toward resolution of the issue. In thisperiod, too, Russia had good relations with the United States, was intensely searching for
an investment boost, and saw itself at the starting point in finding a strategy for reasserting
its power.
When it comes to the issue of periods when Moscow and Tokyo were furthest apart,the Cold War, from 1945 until 1989, naturally figures high on the list, apart from 1955–56
Togo Kazuhiko. Rekishi Ninshiki o Toinaosu: Yasukuni, Ianfu, Ryōdo Mondai [Rethinking Historical Memory:
Yasukuni, Comfort Women, Territorial Questions]. (Tokyo: Kadokawa One Theme 21, April 2013). 94–100.

3

VIEW FROM JAPAN ON JAPAN-RUSSIA RELATIONS

29

when they were conducting negotiations for the conclusion of a peace treaty. After the Joint
Declaration, apart from the brief period of détente when Tanaka visited Brezhnev in 1973,
relations were troubled, deteriorating substantially during 1978–85 at the time of the socalled “second Cold War.” The Soviet economic policy was essentially autarchic, although,around the time of détente, Moscow was keen on Japan investing in Siberia. Confident in
its own power, Moscow did not view Tokyo as a serious great power partner. Conditions
were not ripe for a breakthrough.
After the demise of the Soviet Union and the establishment of the Russian Federation,bilateral relations shrank substantially, starting after September 1992, when Yeltsin
unilaterally cancelled his visit to Tokyo four days before his expected departure, going onlyin October 1993, when the Tokyo Declaration was issued. Second, relations plunged again
from 2009 to 2012. At the end of 2009, Yukio Hatoyama, the newly-elected prime ministerfrom the Democratic Party of Japan (DPJ), could not reverse the slide in the relationshipthat occurred under his predecessor, Taro Aso. Relations continued at their nadir until Putin
delivered his dynamic message early in 2012. Third, the entire period since the Ukrainian
issue exploded in February 2015 can be counted as another time when relations reached anadir.
It is hard to find a clear pattern in these downturns. Japanese and U.S. relations with
Moscow were not in synch in the first two periods. Russian economic troubles and priorities
have varied across the periods, as have Russia’s strategic objectives in Asia and its thinking
about which state can best satisfy them. Over time, we see more of an inverse relationshipbetween views of China and of Japan as well as heightened sensitivity to remarks byJapanese officials deemed to be inconsistent with the expectations for a constructive pathfor negotiations.

Conclusion
Given Russia’s rejection of the framework that Japan assumed, tacitly if not openly, to be
operating in 2013–15, a fundamental restructuring of the terms of any breakthrough andhow they can be realized now looms as, probably, the only way forward. As discussed in
the three scenarios I introduced, this may be extremely difficult. Yet, given Abe’s strong
determination and Putin’s sense that meetings with Abe are of benefit, there is likely to befurther talk, if not serious exploration, of how negotiations can be put on track, while Abe is
still in office. On the Japanese side, this could stimulate discussion of what incentives mightlead Putin to search for a new framework, if not to agree to work with the framework thatsome Japanese diplomats had surmised to be in place at a time of some optimism.
The starting point in this search for reinvigorating talks could be some energy
and economic projects of particular interest to Russia and genuinely useful for Japan,
too, without putting Japan outside the general framework of current G7 policy toward30JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

Russia. Such discussions would test Putin’s interest in developing a broader framework,and challenge Abe’s ability to sustain cooperation with Obama and the G7 on Russia,
while not abandoning his attempts to find common ground with Putin. Events may makethis delicate balancing act untenable, but there is enough unpredictability, at this time, tokeep Japan’s options open and see if events actually turn in a more promising direction foranother upbeat phase in Japan-Russia relations.

Chapter 3

A View from Russia
on Japan-Russia Relationsin the mid-2010s
Searching for a Framework to Move Forward
Alexander Panov

New realities put the relationship between Russia and Japan in a context that was not
anticipated when the framework for transforming relations was being forged from the
1990s until recently. Neither Moscow nor Tokyo has its own strategic vision for achieving
a qualitatively new level of interaction and cooperation in line with these new realities inboth the Asia-Pacific and the world. Moreover, the lack of momentum in the developmentof their bilateral relationship has left them in need of reassessing the broader strategic
environment, before a breakthrough is possible. The Asia-Pacific region is steadily becoming
the leader of global political, economic, and military-strategic processes. Against thisbackdrop, the relations between Japan and Russia—two major states of the region—can be
described as so-so, suffering, in general, from the absence of any sense of dynamism, andcomplicated by the overall crisis in relations that now exists between Russia and the West.
In this chapter, I discuss how the history of bilateral relations has impacted recent
relations. Then, I analyze how current national interests affect the search for a breakthroughin relations. Next, I review how the framework that, in the past few years, served to raise
hopes for relations has been undermined. Finally, I offer suggestions on how relations canagain move forward. Yet I do so with a pessimistic outlook on the existing state of public
opinion on each side and on the prospects for compromise. This outlook casts doubt onsome rosier viewpoints found in Japanese publications.

Historical Background and Outstanding Issues inJapan-Russia Relations
Intermittent diplomatic progress culminated in 2001 at the Irkutsk summit, where theproposal of President Putin, for the first time in the history of relations after 1956, showed32JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

Moscow’s readiness to search for a real compromise on the territorial problem in the Kuril
Archipelago. Tokyo rejected this proposal and even did not try to find out, using official or
unofficial means, just how far Russia was prepared to go to reach a solution to the problem.
Thus, there was really no framework established to build on what had been achievedin 2001. When, in 2013, Prime Minister Shinzo Abe made an abrupt shift in Japan’s
approach, trying to restore the dialogue, he had two main purposes in mind. First, this was
an attempt to find a way to solve the territorial problem. Second, he wanted to preventthe emergence of a strong anti-Japan partnership between Russia and China. Whereassome Japanese see this as a revival of the Irkutsk momentum, building on the negotiating
steps already taken, this is not how many in Russia have interpreted the recent efforts torestart talks. Instead, they see the need to build a new framework, clarifying the strategic
significance of this relationship, on the way to boosting economic relations and rejecting any
ultimatum related to territorial matters.
Reflecting on why the Japanese saw a collapsed framework, I need to emphasize
that, when Putin and Abe made their joint appeal for resumption of talks in searchof a breakthrough, they did not have a shared view that a framework was in place for
diplomats to proceed. Russians, from the outset, have looked for a new framework. Thisis substantiated by the fact that media coverage on the two sides does not reflect enoughoverlap in public expectations for any degree of optimism.
In the history of their bilateral relations, especially those related to the territorial
dispute, numerous attempts to resolve it have all ended in partial or complete failure. Often,
the frustration of the Japanese side at the lack of progress in resolving the territorial problem
on Japan’s conditions has led to deterioration of bilateral ties. Such failures and reactions
impeded further development of relations. That said, there exists in Japan an influential, but
not very large, group of politicians, businessmen, academics, and journalists who understandthat in consideration of the national interest it is necessary to discard the U.S.-led approachof confrontation, and instead establish constructive and diverse relations with Russia as one
key to a new geopolitical outlook. They set their hopes on the settlement of the territorial
problem with Putin. It is this geopolitical logic that offers a ray of hope.
Advocates of a “principled position” are in opposition to this group. They refuse todevise any new approach to the territorial problem in response to the opportunity of
Putin’s time in office. At best, they might countenance revisiting Article 9 of the 1956 Joint
Declaration, replicating the response to the statement by Putin in March 2001 in Irkutsk,
in which he proposed discussing this article, only to be met by Japan reiterating its “fourislands in a batch” stance and its call for punishing the politicians and diplomats advocating
negotiations on the basis of a “two plus two” format.

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Hikiwake and the State of Negotiations
After Putin returned to the post of head of state, following the completion of the four-year
term of President Dmitry Medvedev, he began to work out a long-term foreign policy planfor the entire period of his presidency, which, in accord with the constitutional change, hadbeen extended to six years. One cannot exclude, although nothing is said openly about this,that Putin will run and be elected to a second, six-year term from 2018 to 2024.
In any foreign policy plan it is impossible to take into account all of the challenges that
can arise in the international environment to which it will be necessary to respond. In 2013,
the exacerbation of the situations in Syria, in the Near East as a whole, and in Ukraine
could hardly have been predicted. Moreover, it is clear that Putin, from the very beginningof his new presidential term, designated the East as one of the main directions of Russia’sforeign policy. For that, a two-sided approach was chosen to develop Siberia and theRussian Far East and to build on already successful, ongoing cooperation between Russia
and China, while also forging more concrete ties with other countries of the Asia-Pacificregion. Among these countries, Japan was a priority. According to expert opinion, Putin has
great respect for the economic, scientific and technical, cultural, and sports achievements of
the Japanese nation.
As is known, on meeting then-Japanese Prime Minister Yoshiro Mori in 2001 in
Irkutsk, Putin underscored the presence of Article 9 of the Joint Declaration of 1956, whichanticipated the transfer of Habomai and Shikotan Islands to Japan, following the signing ofa peace treaty, and proposed that the two sides begin discussion of this article. However, thisradical change in attitude toward that article did not evoke an adequate response from theJapanese leadership. After a not very clear response from Mori, which, to some extent, canbe explained by the fact that two weeks after the Irkutsk summit he resigned from his post,
there followed a harsh, negative response from the new prime minister, Junichiro Koizumi.
Koizumi was not willing even to examine the new position of the Russian side, and repeatedthe demand for all “four islands in a batch.”
For any political figure of high rank, such a response could be taken, at the very least, as
impolite, and, in essence, disrespectful to both the proposal and, in particular, the presidentof Russia. Among the supporters in Russia of a hard line in regard to the territorial
demands of Japan, a new, important argument took hold. In negotiations with the Japaneseside, it was necessary to keep in mind that any concession would be taken, not as the wellconsidered foundation for a compromise, but as a “gift” that had already been received, andthat further pressure should be applied in order to realize 100 percent of Japan’s demands. It
is not surprising that, after 2001, no significant negotiations took place on a peace treaty.
Preparing to return to the post of president, Putin made a new attempt to prod theJapanese into searching for a compromise on the territorial question. Thus, his widely
known proposal, expressed at a meeting with foreign journalists on March 1, 2012,

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

communicated his intention to hold talks to resolve the problem in accord with a“hikiwake” formula, in other words, a compromise. In this, neither then nor subsequently
did Putin return to his Irkutsk proposal. One can presume that another rejection of that
proposal by the Japanese would have created a “loss of face” situation for Putin. Therefore,
it is assumed that Putin is waiting for a “response proposal,” based on a compromise, fromthe Japanese side.
In the Japanese political and expert community there have appeared more than a few
interpretations of what Putin may have had in mind in regard to the suggestion of hikiwake.
Obviously, it is not the Japanese position of ippon, (in judo terminology, a clean victory). In
other words, from the very beginning of the negotiations to establish one goal “to return thefour islands.” Such a position is unacceptable to the Russian side. One could assume that theRussian side could be prepared to begin negotiations on the basis of the Irkutsk proposal;
however, at the present stage, considering the Japanese sanctions against Russia, Moscow
would consider such a move improbable. In any case, after Putin’s proposal of “hikiwake,”neither side has come forward with any concrete, compromise proposal; therefore, no real
negotiations on a peace treaty have taken place.

Absence of a Shared Vision but No Clash in National Interests
At this writing, neither Moscow nor Tokyo has its own strategic vision of the prospects
for achieving a qualitatively new level of interaction and cooperation in line with new
realities in both the Asia-Pacific region and the world. Russo-Japanese relations—after thedisintegration of the Soviet Union—are twenty-four years old; however, their development
has been heavily impacted by the more than one-and-a-half-century history of bilateralrelations, starting with their first agreement in 1855. A “new” Russia and an “old” Japan
have, so far, failed to realize their significant potential and embark on a trustful partnership,
albeit the objective of achieving a “constructive partnership” has been set out in official
documents signed at the highest level. The reason is that, while understanding, in general,
the importance of bilateral relations, neither has grasped the strategic significance of
these relations for itself. Thus, the level of political and economic interaction is pretty low,
reducing real awareness of the value of genuine interdependence.
Negative pages in the history of bilateral relations, especially those related to theterritorial dispute, also play a role. There have been numerous attempts to resolve it,
culminating often in the frustration of the Japanese side at the lack of progress on achievinga resolution on its terms, which then leads to deterioration of bilateral relations and impedes
their further development. At the same time, but for this one issue, there are no otherobstacles preventing Russia and Japan from establishing genuinely partnership relations.
The objective reality is that it is highly unlikely that the national interests of Russia andJapan will come into conflict over any principal aspect of their relationship, now or in theVIEW FROM RUSSIA ON JAPAN-RUSSIA RELATIONS

35

future—be it politics, economics, or security. The Ukraine-Crimea problem does not affectany serious interests of Japan. It is no accident that Japan criticized the inclusion of Crimea
in Russia, but it focused mainly on the “use of power.” For Tokyo, what is most importantis to show China that it stands behind the principle of not allowing any state to alter the
territorial status quo through the use of force. Russia does not pose a threat to Japan, and,of equal importance, there is no Japanese threat to Russia. Rather, there is mutual desire toensure stability in the Asia-Pacific region and, above all, in Northeast Asia.
Officially, Russia did not make any comment on Japan’s recent adoption of legislation
on “collective self-defense,” which was met in South Korea and especially in China withdeep concern and criticism. Interestingly, in the Joint Declaration of 1956, both sides
confirmed, in accordance with Article 51 of the United Nations charter, that every state
has an inalienable right to individual and collective self-defense. At roughly the same time,on September 21, 2015, at a Moscow press conference after talks with Japanese Foreign
Minister Fumio Kishida, Russian Foreign Minister Sergey Lavrov said that Russia “hastaken note of concern being voiced by neighboring countries to the decision of Japan toease restrictions on collective self-defense.” According to Lavrov, Russia is paying primaryattention to Washington’s plans to boost its missile defense project by involving Japan anda number of other countries, South Korea among them, in the Asia-Pacific missile defense
system. He also expressed Russia’s readiness to resume the “two plus two” mechanism withJapan, with consultations on a wide range of security issues in the Asia-Pacific region, andespecially in Northeast Asia. Amidst the sharpening atmosphere in bilateral relations, bothsides also expressed their readiness to continue consultations on important international
issues, including the Korean Peninsula, the Middle East, Afghanistan, international
terrorism, and the proliferation of weapons of mass destruction.
It is beyond dispute that the economies of Russia and Japan are unusuallycomplementary—Russia is abundant in mineral resources that Japan lacks; and Japan haspractically unlimited access to the Russian market for Japanese products and capital. Thereis little prospect that the two will compete for markets. Indeed, it seems very unlikely thatany sort of economic conflict will arise between these two countries. Yet the level of tradeand economic cooperation between the two is far from impressive. The maximum tradelevel reached has been about $30 billion. Japan’s share in Russia’s overall trade turnoveris only around 4 percent. Russia’s share in Japan’s turnover is even less—roughly 1.8
percent. Over many years, the structure of their bilateral trade has remained unchanged:
Japan imports mostly energy resources, metals, seafood, and timber, while motor vehicles
comprise most of Russia’s imports. Even before sanctions, the value of cumulative Japanese
investments in Russia remained rather low, compared to the overall level of investments in
the Russian economy. Consequently, the two hardly depend on each other in the economic
sphere.

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

The territorial problem is not a major factor preventing the development of largescale economic cooperation. In the 1970s and ’80s, multi-billion-dollar projects in Siberia
and the Russian Far East were launched, while at that very time the Soviet leadershipdenied the existence of the “unresolved territorial problem” on the bilateral agenda. Before
sanctions were begun, the Japanese business community was constrained, not by the
territorial problem but rather by the absence of favorable conditions for business activity in
Russia, due to excessive administrative regulations, the arbitrary interpretation of legislative
and administrative acts, complicated immigration procedures, and costly and unreliableinfrastructure. It is important to note that in the Russian Far East and Siberia, businessstructures that are firmly established in the main sectors of the economy and resistant toany change hamper the arrival of foreign, including Japanese, capital, because they fear
competition and are unprepared to work in accordance with fair, non-corrupt rules. Inturn, Russian entrepreneurs do not display any interest in starting businesses in Japan. Not
surprisingly, there are no big projects with each other on the horizon. In sum, trade andinvestment cooperation have great potential, if both sides make an effort to overcome thesubstantial obstacles that now exist.

Toward a New Framework
What would be needed to move forward toward a framework to achieve a breakthroughin relations? Public opinion in Russia and Japan exerts considerable influence on the way
policy is shaped toward the other country. According to many polls, Japanese antipathy
toward Russia has exceeded 80 percent. This can be explained by a sustained negative imageof Russia, dating to the Cold War, of a neighboring country set against Japan (a war against
Japan in violation of the non-aggression treaty, the death of more than sixty thousand
prisoners of war in Soviet camps, the seizure of “originally Japanese territories,” and theattempts to extend communist ideology to Japan). After the disintegration of the Soviet
Union, the majority of stereotypes did not disappear but were complemented by negative
views related to the lack of democracy in Russia and endemic criminality and corruption.
Added to the narrative, recently, are images of the assertiveness of the Russian military,
violations of international law, and interference in the internal affairs of other countries, as
noted above in the discussion of Ukraine. Among those who shape public opinion—themass media, think tanks, prominent historians, and political scientists—all are infected withthe “negative Russian virus.”
Russia is far behind Japan in using soft power instruments to explain to JapaneseRussia’s realities and true intentions. Recently, the level of antipathy toward Japan in
Russia rose sharply from 20 to 31 percent—a response to intense Japanese pressure on the
territorial problem and anti-Russian policies, sanctions in connection with the Ukrainiancrisis, as well as Tokyo’s solidarity with the Western front against Russia. On the whole,VIEW FROM RUSSIA ON JAPAN-RUSSIA RELATIONS

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in the eyes of the Russian people, Japan is neither a friend nor an enemy. Nonetheless,Abe undertook an official visit to Moscow in April 2013 and took part in the opening
ceremonies of the Winter Olympic Games in Sochi in February 2014, despite the Olympics
boycott by leaders of other European countries and the United States. Abe also began toinsistently raise the question of a return visit by Putin to Japan. However, the visit did notmaterialize either in 2014 or 2015. Abe persevered, despite the well-known difficulties inrelations between the G7 and Russia. In his meeting with Putin on September 28, 2015,
at the United Nations, Abe listened to the Russian president’s proposal to visit one of theRussian regions to conduct an informal meeting of the two leaders, although conditions
have still not materialized for an official visit of the president of Russia to Japan.
Judging by articles in the Japanese press citing official sources, Abe has begun aconcrete examination of whether to accept Putin’s invitation. In his New Year’s press
conference on January 4, 2016, Abe again underscored that “without a Japan-Russia summit
the problem of the Northern Territories cannot be resolved.” Moreover, clearly addressing
the White House, which does not approve of the contacts between the Japanese prime
minister and the Russian president, Abe said, in effect, that Russia is playing a constructiverole in the battle against terrorism in Syria and Iraq, and this is “extremely important.”
Various proposals were being aired in Japan that Abe, in the spring, could meet with Putin
in one of Russia’s regional cities. In that case, Abe could inform Putin about the planned
contents of the G7 meeting, and, thereby, play the role of a bridge between Moscow and theG7, conveying to the others at the meeting the “opinion of the Russian president.”
Evidence of Abe’s seriousness about improving relations with Moscow can be found in
his December 2015 designation of Toyohisa Kozuki to be Japan’s new ambassador to Russia.
Kozuki is a representative of the “Russian school” of Japanese diplomats and a supporterof a positive course in bilateral relations. On January 10–14, 2016, Masahiko Komura,
vice-president of the Liberal Democratic Party, visited Moscow, where he met with Sergey
Naryshkin, chairman of the State Duma, and Lavrov. Plans exist to reconvene, in the near
future in Tokyo, to discuss questions of Japan-Russia economic cooperation.

Looking Ahead in 2016
What dynamic of bilateral relations can we expect during the first half of 2016? If there
is no unexpected crisis in international relations, an unofficial visit by Abe to meet Putin
in one of Russia’s regions most likely will take place. For the Japanese prime minister, it isextremely important to achieve a specific agreement, or at least the appearance of one, tounderscore that his efforts to converse with the Russian president have not been made in
vain. If such an outcome did not materialize, a “loss of face” would be unavoidable. The
most favorable outcome of the meeting would be to reach agreement to begin practicalpreparations for an official visit of Putin to Japan, in the second half of the year. The two38JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

leaders would agree to issue instructions to their diplomats “to accelerate the negotiatingprocess for a peace treaty.” Abe would inform Putin of the agenda of the forthcoming G7
summit, and he would emphasize the importance of strengthening cooperation in the battle
against international terrorism.
That is the optimistic scenario for the meeting. One could speak of its success if
the two sides agree, in preparation for Putin’s visit, to draft a series of statements about
cooperation; however, these statements would fall under the shadow of the sanctions. It
will be interesting to see if the Japanese side is prepared to end the sanctions or, if not, topartially remove them. If that were to occur, even more attention could be given to the peace
treaty; that is, “new instructions” could be given to negotiators or a “directive to work out” a
new approach.
In any case, one can expect quite a furor on the eve of the meeting, and after it, fromthe opponents of improving relations between Tokyo and Moscow, both in Japan andoutside, above all in the United States. It is not difficult to forecast that alarms will soundabout “not breaking the solidarity of the West” in rejecting Russia’s activity in Crimea andUkraine. Demands for the “return of all four islands,” with no alternative, will become
even more insistent. In this situation, any sign of Russia’s readiness to compromise will beinterpreted as proof of the arguments that Russia “is isolated,” “is in a difficult economic
situation,” and “does not want to play the role of a younger partner to China.” Thus, Russia
will have to satisfy all of Japan’s territorial demands.
In Russia, there will also be no shortage of critics of the policy toward Japan, who argue
that any sort of concessions should not be offered. In Russian political elite circles andexpert society, the opinion prevails that the Japanese side, including Abe, will not make any
compromise decision regarding the territorial question, and if it did so, it would “retain what
was left of the issue to be used in the future.” Tokyo’s support for the anti-Russian policies of
Washington will not change, and there will be no removal of the sanctions on Moscow. In
general, it is not beneficial to conduct negotiations on a peace treaty when one side, Japan,
is carrying out unfriendly policies toward the partner with which it is planning to sign anagreement on peace, friendship, and good-neighborliness. In Russian business circles there
are few who believe in a shift of Japanese business in the direction of Russia, with largescale investments and the transfer of contemporary technology, even should a peace treaty
be signed.
We should not forget about public opinion, especially in Russia, which is witnessing aserious intensification of patriotic and nationalist emotions. Abe is enjoying the support ofa significant part of the Japanese population, and Putin has even higher ratings of support
from the Russian people. However, even such popular leaders need to take into accounttheir domestic political situations, which could be aroused by an unpopular decision.
Before making a fateful decision for both countries, it is extremely important to change,

VIEW FROM RUSSIA ON JAPAN-RUSSIA RELATIONS

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in a fundamental manner, the character of Russo-Japanese relations. This change must
involve achieving a high level of mutual trust and cooperation in all spheres, including
public opinion in both states, so that a compromise decision on the territorial problem is
not interpreted as an unjustified concession and a defeat at the hands of the negotiating
partner. Otherwise, there would inevitably arise revanchist feelings that would be leveraged
to reexamine or reject the agreement.

Conclusion
The current state of Russo-Japanese relations does not give rise to serious optimism about
the possibility of reaching a mutually acceptable agreement on a peace treaty, above all on
the territorial problem. At the same time, there remains slight hope that the leaders of thetwo countries, Putin and Abe, will succeed in building a new foundation on which they cansearch for a decision on this most difficult issue.

Chapter 4

A Once in Sixty-Year
Opportunity? Shinzo Abe’sApproach to Vladimir Putin
Tomohiko Taniguchi 1

In early 2016, three developments converged to give Shinzo Abe, Japan’s prime minister, arenewed opportunity to further his relationship with Vladimir Putin, president of Russia.
First, economic sanctions put in place against Russia, in response to its actions in the eastof Ukraine, were to expire at the end of July. Discussions had to take place on whether theyshould be extended, and Putin is counting on Abe to enable Russia to leave the sanctions
regime, especially given that the year found Abe chairing the G7 meetings. Second, given
the legislative elections for the State Duma, the lower house in Russia, due in September,there is a desire on the part of Putin to score some diplomatic advances in the first half ofthe year, and Japan looks promising to highlight progress, whatever that may be. Third,
perhaps most important, with gas and oil prices plummeting, there is growing concern as
to how sustainable Russia’s economy will be. Some fear that even a default in international
financial markets might not be out of the question. Thus, Putin has been more desperate toboost economic ties with Japan.
Abe is seeking to take advantage of these developments. The timeliness for him could
be explained as follows. One, since China’s growth engine has slowed, it has clearly lost
economic clout. Thus, Moscow has found the country relatively less attractive and Japan
more promising. Two, Abe had a list of pent-up offers he could make to Putin, once thesanctions were lifted, from assisting Russia to improve its medical services to taking actions
jointly to better Russia’s dilapidated urban infrastructure. Three, and most importantly, Abe
now has a greater say in the international arena because he is the chair of the G7 meetings,
all to be held in Japan in the first half of the year.
On the questions of what to do with the sanctions against Russia, how best for

Tomohiko Taniguchi is a professor at the Keio University Graduate School of System Design and Management anda special adviser to Prime Minister Shinzo Abe’s cabinet. Views and opinions expressed are strictly his own, and of
absolutely no connection to those held by any organization of which he is a member.
1

42JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

the international community to deal with Daesh terrorism, or how to respond to thecrisis in Syria, consultations with Putin are an urgent need for the G7 community. Abe,as its chairperson, is tasked to serve as a bridge between the two—Russia and the G7
community. Among the greatest achievers among Japan’s recent prime ministers, he has
strengthened the U.S.-Japan alliance, widened Japan’s strategic space by scaling newheights in relationships with Australia and India, and within the nation, enhanced security
preparedness. This means that Abe has found greater room for pursuing his own agenda
vis-à-vis Russia, in general, and with Putin, in particular. In short, with greater diplomatic
capital and as the chief rapporteur bridging Russia and the G7 community, Abe will find itmuch easier to reach out to Russia by making a journey to the country to have a tête-à-tête
with Putin.2

Russia Matters Even More for JapanWhy does it matter for Japan to seek better ties with Russia? How prepared is Shinzo Abe
to achieve a breakthrough on his watch? Economic relations could benefit Russia morethan Japan. Japan is bigger in terms of nominal gross domestic product than South Korea,
Turkey, and Russia, together.3 Japan is selling cars to Russia in large number (49,142 in2015), yet they are used cars; much smaller New Zealand usually buys more than doublethat number of Japanese second-hand cars.4 Japan’s exports to Russia recently peaked in2012 at $12.6 billion. Taiwan, however, imported from Japan, in the same year, 3.8 times
that figure.5 In addition, with the world awash in natural gas, Japan has much reduced
appetite for Russian gas. Russia, in contrast, is fully aware that, without Japan’s capital andtechnology, the large landmass of Siberia could not be fully developed. Japan’s relations with
Russia are, therefore, still driven not by economic interests but primarily by political ones,
which are described below.
Setting aside the two nations’ territorial issue in the Kuril Islands, to have greater security
up north, between Russia and Japan, bears greater value for Tokyo than ever before, now that
there are more uncertainties in the south, due to Beijing’s assertiveness. Beijing could also
cause Russia and Japan to be more closely aligned, for both increasingly feel uneasy about
China’s unilateral approach to exploring the Arctic navigation route, among other concerns.
Never before in Japan’s postwar era has the country found itself militarily threatened on both
It is widely speculated that Abe will be visiting Russia in early May.
Figures are for the year 2014 and from the IMF’s World Economic Outlook databases.
4“Chūkosha Yushutsu Zennenhi 28.1% Gen: Afuganisutan Yushutsu Daisū Oobaba Jōshō” [Used Car Exports
down 28.1% on Previous Year: Number Exported to Afghanistan up Substantially]. Goonet Jidōsha Ryūtsū.
Accessed February 13, 2016. http://www.goonews.jp/data_bank.php.
5Japan External Trade Organization (JETRO). Japan’s imports and exports to and from Taiwan, theUnited States, and Russia. Accessed February 13, 2016. Raw data. https://www.jetro.go.jp/world/search/
result?countryId[]=8&countryId[]=35&countryId[]=46&displayItemId[]=2&nendo=2015&money=.
2
3

ONCE IN SIXTY-YEAR OPPORTUNITY?

43

Figure 1. Frequency of Japanese scrambling.
500
450
400
350
300
250
200
150
100
50
0

FY 2011

FY 2012FY 2013

FY 2014n Against Russia

247

248

359

473

n Against China

156

306

415

464

Source: Japan Ministry of Defense.

the north as well as the south. It is rational for Tokyo to attempt to soften the northern edge
by putting the Russo-Japanese relationship on a more sustainable trajectory.
With Japan’s defense capabilities overstretched to cope with China’s rather regular
intrusions into its sea and air spaces, Tokyo can ill afford, for instance, to scramble its fighter
aircraft against incoming Russian military airplanes. The frequency of scrambling against
the Russians has not decreased, but rather increased, ironically, since Shinzo Abe took officeand began enhancing his personal bond with Vladimir Putin (fig. 1).
One wonders whether, were the peace treaty between Japan and Russia in place, thescrambling against the Russians would become less frequent, and Tokyo, as a result, could
better concentrate its military assets to its south. Suffice it to say, lessening uncertainty, notto mention hostility, between Russia and Japan has recently gained urgency.
What of the territorial issue? The war between Russia and Japan began only six days
prior to Japan’s World War II surrendor. It has never ceased, in theory, since a number ofprevious attempts to forge a peace treaty have all ended in vain. To put the war finally to rest
entails solving pending differences, and, among them, what the Japanese call the Northern
Territories issue stands out.

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

The Northern Territories
We must define what is, and what no longer is, at stake in discussing the issue of theNorthern Territories. No longer at stake is the desire, once burning, of the former island
residents to return to their hometowns to live. Still strong may be their hope to visit theirancestoral land and their family graveyards, of their own free will. Statistics show that 6,482
men and women, or less than 40 percent of the former residents, were still alive at the endof 2014, with an average age of 80.2 years old,6 which means that those survivors wereelementary schoolers when the Russians invaded their home islands.
Three things are still at stake. One, once back, those islands could give Japan
expanded territorial waters and an equally expanded exclusive economic zone (EEZ),
from which Japan could permanently benefit, strategically as well as economically. Two, the“sunk” political cost to solve the pending issue is already enormous for both Tokyo
and Moscow, and, particularly for Tokyo, it is too late to switch to a different mode of
conduct. Moscow’s attitudes with respect to the issue have fluctuated over the last sevendecades. Since the Gorbachev era, however, Moscow has been consistent in admitting that,unless the two countries reach an agreement on the territorial dispute, there will be nopeace treaty. The two countries are still willing to pay the price to solve the issue, which is
unique, if compared to similar cases faced by Japan. Three, and no less important, it isself-evident that the issue cannot be separated from similar cases Japan has with China
and South Korea. To give up on the one with Russia would inevitably weaken Tokyo’s
positions on others.

Is Shinzo Abe Ready?
The more Japan expends political capital, the more cherished will be the reward if the issues
are finally solved. Tackling the pending issues with Russia in an attempt to forge a peace
treaty has, over time, turned the territorial issue into a “trophy” project that only those richin accumulated political capital could dare to pursue. Japanese prime ministers in the recent
past, who were in office only for short periods, could not have even addressed the problem.
For the Russians, from Vladimir Putin to Foreign Minister Sergey Lavrov—a walking
chapter of Russian diplomatic history—Japan’s revolving-door prime ministers hardly put
the Japanese on a par with them. That puts Abe in a unique place. First, his populartiy
ratings, rarely below 40 percent, will likely lead him to remain in office for another two
years to 2018, the year in which Putin will also have to stand for reelection. Some in Japaneven go so far as to speculate that Abe could extend his term two more years by callingJapan’s Ministry of Foreign Affairs (MOFA), “Warera no Hoppō Ryōdo” [Our Northern Territory]. Ministry ofForeign Affairs of Japan. 2014. Accessed February 13, 2016. http://www.mofa.go.jp/mofaj/files/000035454.pdf.
6

ONCE IN SIXTY-YEAR OPPORTUNITY?

45

general elections in 2016,7 either way staying long enough in office to aim for achieving theobjective with Russia.
Second, Abe is endowed with greater diplomatic capital than any one of his recent
predecessors. The standing ovations he earned when he addressed a joint session of the U.S.
Congress in April 2015 are still fresh in Japanese memories. With new and more substantial
security cooperation guidelines also in place, it is safe to say that Abe has brought the U.S.Japan alliance to new heights. He has also made Japan’s relations with Australia and India
much closer. Narendra Modi, India’s prime minister, is not shy about addressing Abe as oneof his closest friends.
Since his return to office on December 26, 2012, through December 21, 2015, Abe,
while in Japan, spoke with world leaders either in person or over the phone 420 times;abroad, met either in person or multilaterally with world leaders 221 times; and left Japanfor travel abroad 39 times, visiting 63 countries and spending 192 days outside Japan. In
comparison, former prime ministers Yasuo Fukuda, Taro Aso, Yukio Hatoyama, Naoto Kan,and Yoshihiko Noda together visited only 46 countries.8 He has developed close friendships
with such leaders as Tamim bin Hamad Al Thani, emir of Qatar; Recep Tayyip Erdogan,president of Turkey; Benjamin Netanyahu, prime minister of Israel; and with Vladimir
Putin. Among the most connected and recognized leaders active on the international arena,
Abe is readier than most past Japanese prime ministers to move Russo-Japanese relations
forward. It is conceivable that he has developed a strong sense of mission that, if not for
him, the peace treaty would be much further away.

Abe’s Immediate Task
Abe’s immediate task is to bring Russia and Japan back to where they were in April 2013.
Since December 2012, he has met Putin eight times, among which, the one in Moscow
in April 2013 was the most fruitful. It was the time, in retrospect, when Tokyo rather
innocently hoped to raise the bilateral relationship to a quasi-alliance, the evidence of which
was that Japan proposed, and Russia agreed to, regular “two plus two” joint foreign anddefense ministerial talks,9 an initiative Japan has chosen to launch only with partner nations

The current term for the Lower House is due to terminate in 2018. The speculation presupposes that the Liberal
Democratic Party, of which Abe is president, alters its party bylaws. According to the current bylaws, the party’s
president must be selected once every three years and can serve only two consecutive terms.
8
Unpublished data provided by the Japanese Ministry of Foreign Affairs.
9
Abe said at the joint press conference, “As far as security and defense are concerned, we agreed to launch
consultations between our foreign policy and defense agencies at the ministerial level employing the so-called‘two plus two’ formula. I very much hope that this will greatly increase the level of cooperation between our two
nations, Japan and Russia, in providing security and defense.” President of Russia. “Press Statements and Answers tojournalists’ Questions following Russian-Japanese Talks.” April 29, 2013. http://en.kremlin.ru/catalog/persons/356/
events/18000#sel=22:8,22:63.
7

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

deemed strategically salient. They are unlikely to be resumed, at least for now, after Russia
breached internationally-accepted norms by grabbing Crimea and invading Ukraine. What
could and should be reaffirmed, however, is the pledge by the two leaders to negotiate apeace treaty and, rather than letting diplomats on each side shoulder the task, recommit
themselves to putting their weight behind the negotiations and personally guiding theprocess.10
It is for that purpose that Abe appointed, on January 22, 2016, Chikahito Harada,
the previous ambassador to Russia, as his personal envoy. With the newly created title,“ambassador in charge of Japan-Russia relations,” Harada, a veteran Russia expert, met his
counterpart, Igor Vladimirovich Morgulov, Russia’s deputy foreign minister, in Tokyo on
February 15, 2016, and is expected to contact Putin’s close circle extensively. His title may
have no precedent, yet the role Harada plays has one in Japan’s diplomatic history. Between
1955 and 1956, the Japanese ambassador to the Court of St James’s, Shunichi Matsumoto,was tasked with advancing Japan’s relations with Soviet Russia by meeting frequently withhis counterpart, Yakov Malik, himself stationed in London as the Soviet Ambassador to
Britain.11 The two paved the way for the rapprochement that took place in October 1956.
Exactly six decades later, Shinzo Abe expects Harada to play a similar, yet even more
important, role.
What, then, is the difference between Abe and Putin on the territorial issue? Not
even his closest aides are fully aware of what Abe has proposed to Putin, or vice versa, forwhen they meet they normally set aside time for tête-à-têtes, with only their respective
interpreters sitting beside them. Yet we had a glimpse of what they may be discussing on
the territorial issue. Yomiuri Shimbun, reporting on the meeting Abe and Putin had on thesidelines of the G20 summit, November 15, 2015, in Antalya, Turkey, wrote, without any
source indicated, that Abe proposed what he thought would amount to a “draw” between
the two countries. Putin responded by saying that it would not be a hikiwake (draw) but
would give Abe an ippon (win).12
For many years, Tokyo has continued to stress that, whatever solution Japan andAt the same conference, April 29, 2013, Abe said, “President Putin and I confirmed our understanding that theexisting situation of a peace treaty between Japan and Russia not being signed 67 years after the end of the [World]
War, is not normal. Given this fact, we agreed to give our Foreign Ministries instructions to accelerate talks ondesigning a mutually acceptable resolution. In the future, President Putin and I will discuss this issue after receiving
reports and presentations from our foreign ministries on the progress of the negotiations. The negotiations on signinga peace treaty have been at a standstill for the last few years. But during today’s talks, we were able to agree that wewill renew negotiations, and we will accelerate this process. I believe this is a major result of our meetings. As for me
personally, I will work on this matter directly, since it is the biggest unresolved issue between our two states. I will
make every effort to resolve it.” Ibid.
11
Yakov Malik was the Soviet Union’s ambassador to Japan, who handed his country’s declaration of war to theGovernment of Japan.
12
It was a quintessentially Putinesque response to use judo terms. Yomiuri Shimbun. December 22, 2015.
10

ONCE IN SIXTY-YEAR OPPORTUNITY?

47

Russia reached, it must be “acceptable to both countries.” Conventional wisdom holds that,between the lines, that statement implies that Tokyo no longer demands all four islands
be returned at once, whereas it is to be hoped that Russia gives back to Japan more than
Habomai and Shikotan, the two that the Soviets agreed to return six decades ago, once thepeace treaty has come into existence. Whether Abe demanded that, in addition to the twoislands, Kunashiri should also be returned in full to Japan, thereby inviting Putin’s “ippon”
reference, is anyone’s guess. It is more noteworthy that the two leaders share a degree offrankness that enables them to exchange their views in such a way.

Far from Optimistic with a Long Memory
Abe is far from optimistic. He may be thinking that time is not on his side to conclude
the negotiations with Putin. Why is this so? When Abe met Putin in Sochi, February
2014, a plan was taking shape that, come autumn, Abe would take the visiting president
to his hometown, Yamaguchi, and, together, take a hot spring bath. Absent the subsequentinvasions Putin orchestrated in Crimea and Ukraine, diplomacy between the two middleaged, naked men might have yielded results. That is not a laughing matter; Abe has amemory, longer than any of his contemporaries, of how difficult it is to strike a deal with
Moscow. Between the ages of twenty-eight and thirty-seven (1982–1991), he was a private
secretary to his father, Shintaro Abe, who spent four years as foreign minister, before dying
in 1991 when he was serving as secretary general of the Liberal Democratic Party. The sonalways travelled abroad with the father, and attended most of the meetings his father had
with foreign leaders. One month before his father’s death, Shinzo Abe must remember
most vividly his father making an extra effort to leave his hospital bed to meet visitingpresident Mikhail Gorbachev. Paper-thin due to pancreatic cancer, Shintaro Abe wore coats
and underwear that his wife, Yoko Abe, had padded to make him look less frail.13
Furthermore, Shinzo Abe was born and raised in an extended diplomatic family that
included Shigeru Yoshida and Yosuke Matsuoka, who as wartime foreign ministers forged
the neutrality pact between Japan and the Soviet Union, which would ultimately be broken
unilaterally by Moscow, thereby sowing the seeds of the ongoing problems between Russia
and Japan. For Shinzo Abe, therefore, the bilateral relationship is something to be handledwith ultimate care, the greatest use of political capital, and the longest-term approach. He is
the last person to optimistically presume that, on his watch, Japan could reach a peace treaty
by solving the issue that has been sixty years in the making.
For Abe, however, the difficulty of the negotiation lies in the fact that the two leaders
must be both popular and powerful at the same time, and they must build trust strong
Abe, Yoko. Watashi no Abe Shintaro: Kishi Nobusuke no Musume toshite [My Dear Shintaro Abe: From the
Perspectives of Nobusuke Kishi’s Daughter]. (Tokyo: NESCO, 1992). 33, 38–40.
13

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

At the balcony of Vladimir Putin’s Sochi guest house, February 8, 2014.
The Akita inu dog, named Yume (or dream), was a gift the governor of
Akita prefecture sent in July 2012 to the dog-loving Russian President.
(Mikhail Klimentiev/AFP/Getty Images)

enough to bind the two and incentivize them to override domestic oppostition to a deal. In
any event, the deal must be struck, not between the two foreign ministries, but between the
two leaders. To build enough intimacy between them, Abe is of the view that he must meet
Putin as many times as possible. How many tête-à-têtes could he hold in the remainder—
two to four years—of his administration? Realistically, that number is likely fewer than ten,which fuels his sense of urgency. That, again, explains why he deems it important to make atleast one of those meetings an extended one, perhaps in a hot spring bath. In the year 2016,
he will most likely concentrate his diplomatic capabilities on trying to convince Putin that,
if not the two of them, no one else could solve the abnormal bilateral relationship.

PART IIGEOSTRATEGICRELATIONSChapter 5

Russia’s Approach toJapan under Vladimir Putin:
A Strategic Perspective
Dmitry Streltsov

What is Japan’s strategic significance to Russia? How do Russians perceive their country’ssalience to the U.S.-Japan strategic alliance? How does the China factor figure into theprospects for improved Russo-Japanese relations? Reflecting on the strategic calculations
behind the efforts to invigorate ties in the mid-2010s, this chapter concentrates on Russian
thinking in light of the U.S.-Japan alliance and the state of Russo-American relations. It
sheds light on problems that still bedevil this relationship, setting aside the Kuril Islands
territorial issue (apart from its strategic implications).
It is well understood that Japan is not at the forefront of Russian strategic thinking.
Tokyo has some bilateral significance for Moscow, but many are prone to view it througha “triangular” lens. Given the salience of Russo-American relations, it is inescapable that
Russians perceive Japan through this lens, paying attention to U.S.-Japan relations as they
consider Russia’s strategic opportunities with Japan. Another triangular lens views Japan
from the perspective of the increasingly important Russo-Chinese relationship. Given
China’s strong views of Japan’s regional military activities and Japan’s obvious interest in how
these triangles evolve, Russians must be conscious of this framework for viewing relations.
Japan has good reasons for wanting to transform its relationship with Russia. Tokyo has
openly expressed serious fears of a military confrontation with Beijing over China’s claims
to the Senkaku (Diaoyu) Islands in the East China Sea. And Japan is uncertain how its
strategic ally, the United States, would ultimately respond to a major military incident there.
Equally obvious are Russia’s motives. The eastern focus in Russian energy policies
changed Russia’s appreciation for Japan as a prospective market for Russian energy
resources. Russia requires a long-term and predictable partner because of the acute need
for Japanese investment and technologies to provide for a modernization breakthrough in
Russia’s Far East. An additional motivation for good relations with Japan was created by thefinancial crisis in which Russia found herself after the introduction of economic sanctionsin 2014 and the unprecedented decline in oil prices in 2015–16. What is also apparent

52JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

to Russia is that its relations with Japan must improve if it is to achieve a more balanced
economic and political strategy in Asia, in particular in the context of the economic andmilitary rise of China.

Factors Influencing the Putin Administration’s Japan Policy
The activity of Russia in multilateral structures of East Asia has been most noticeable
in the sphere of military security (Six-Party Talks, Shanghai Cooperation Organization,
Association of Southeast Asian Nations Regional Forum, etc.). Russia has refrained
from sending its highest-level officials to the summit meetings of economically-oriented
regional organizations, like the East Asia Summit, which Moscow joined in 2011. In 2015,
President Vladimir Putin even skipped the Asia-Pacific Economic Cooperation summit.
Russia deliberately takes a neutral stance, in spite of diplomatic pressure from China, whichtries to persuade Moscow to support it on the Senkaku/Diaoyu problem. On the Korean
Peninsula, Russia develops relations with both the North and the South, which enables
it to positively interact with both sides. Besides, Russia rejects the bloc-division approachto regional security and pursues the idea of “network diplomacy,” so as not to antagonize
other regional actors. Russia does not participate in any military bloc and does not pose(at least on the level of official military doctrine) a threat to Japan, for whom the potential
enemy is China or North Korea, not Russia. With this reasoning, Russia can look forward
to a geostrategic relationship with Japan, accentuating multilateralism, if Japan can resist a
clashing strategy dominated by the United States.
Many in Russia are persuaded that, unlike most countries of Northeast Asia, Russia
does not face any problems from the historical past with its neighbors, such as those Japanis confronting with China and Korea. While Russia is not involved in territorial spats(apart from the Kuril Islands issue with Japan, which can be settled by Putin and Abe)and unresolved historical issues in East Asia, it has, more or less, normal relations withall opposing parties in these other Northeast Asia conflicts. In this context, Russia is theleast “unpleasant” and “undesirable” partner. Its neutral status is the best trump card it caneffectively use in the political bargaining with other parties. Russia’s potential role is (bothin Moscow and among other regional actors) as a “go-between” nation. If Japan accepts it inthis capacity, this will give a major boost to their bilateral negotiations.
Another important factor in Russia’s strategic thinking lies in the economic sphere. The
policy of “turn to the East” prioritizes Japan as one of the key economic partners in Asia.
In Moscow’s view, the strongest opportunities for bilateral cooperation with Japan exist in
the sectors of energy, infrastructure, agriculture, housing, energy conservation, medicine,and information technology. Given its wealth and size, Japan could continue to be one of
Russia’s most important energy markets for years to come, especially in light of the deep
structural reforms of its energy sector after the Fukushima disaster. As steps for attracting

RUSSIA’S APPROACH TO JAPAN UNDER VLADIMIR PUTIN

53

Japanese investment, Moscow showcased its presence at the September 2015 Eastern
Economic Forum in Vladivostok, introduced in the Far East the system of “territories ofadvanced development” with unprecedented benefits for foreign residents, and declared
Vladivostok a “free port” as of 2016. The late 2015 visit to Japan by Igor Sechin, head of thegovernment-owned, Russian oil company Rosneft, reaffirmed Moscow’s interest in Japan’s
investment in Russian oil and gas deposits in East Siberia and the Far East. By responding
to these initiatives, Japan would greatly boost the prospects for a breakthrough in ongoingnegotiations.

Japan’s Geopolitical Approach and Russia’s Response
Unlike China and even South Korea, Japan joined the sanctions policy and introduced
regulations for financing new projects in Russia. Tokyo treats Russia’s action in Crimea asa violation of the postwar status quo and as something harmful to international stability.
Chief Cabinet Secretary Yoshihide Suga told reporters, “Russia’s annexation of Crimea isin violation of Ukraine’s sovereignty and territorial integrity. Japan by no means approvesof such attempts to change the status quo with force.” Speaking in Belgium on January 20,
2015, Foreign Minister Fumio Kishida told the international community that the situationin Ukraine is comparable to the Kuril problem in that the status quo has been changed byforce. Russia was extremely sensitive to this statement. The official commentary from theforeign ministry stated, “It was militarist Japan in cooperation with Nazi Germany that used
force to break the status quo which existed prior to World War II and occupied a whole
number of countries as it sought to assert its dominance in the world.”
Though disillusioned with Japan’s behavior, Russia still acts on the premise that
the Ukrainian issue does not affect Japan’s national interests directly, and it gives special
treatment to Japan, separating it from other G7 countries. Moscow does not overly criticize
Tokyo in state-controlled media and senior officials’ public statements. Japan’s sanctions
are labeled as “limited,” “insignificant,” and “compelled” under severe pressure from
Washington. Russia has especially stressed that Japan’s sanctions are milder, less sensitive
than those introduced by the European Union.1
Russia’s unspoken hope towards Japan, based on historical experience, is that Japan
has always exercised political expedience and has been reluctant to stick to “democratic
principles” in situations affecting its own national interests. For example, in its official
development assistance policy, Japan was always the first to lift sanctions against“undemocratic” regimes, if they ran counter to its economic gains. For example, Japan was

For example, in spite of visa restrictions on government officials, Japan readily accepted Sergey Naryshkin, speakerof the Lower House of the Russian Duma, who is included on the black list of G7 countries, as the head of thedelegation attending the opening ceremony of the 2015 Japan-Russia cultural exchange in Tokyo.
1

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

the first member of the G7 to restore high-level relations with China after the Tiananmen
incident of 1989. Moreover, while Japan formally joined Western sanctions against theSoviet Union after Soviet troops invaded Afghanistan, Tokyo continued to intensify
trade and investment relations with Moscow, which grew rapidly in the early 1980s. At
present, Russia hopes Japan would be pragmatic, as usual, and play the role of a “bridge” innormalizing Russia’s relations with the West, in exchange for certain economic benefits.
In pursuing its policy towards Japan, Moscow also counts on personal relations
between the leaders of the two countries. Such relations are especially important, given
the personality-oriented nature of the electorate in both countries. Since the beginningof Dmitry Medvedev’s presidency of 2008–2012, Moscow has deliberately played thegame of “good cop, bad cop,” using the image of a stern Medvedev as the bad cop and theJapanophile Putin as the good one. When Medvedev was president, political relations fell
to an unprecedented low as the parliaments of the two countries openly squabbled about
the territorial issue. Seemingly oblivious to Japan’s negative reaction, the central government
doubled investment in the Kuril Islands in 2011, while Russian military units located on theSouth Kurils were equipped with anti-surface and anti-aircraft defense missiles. Since 2009,
Mr. Medvedev has thrice visited the South Kuril Islands (his latest visit, in his role as prime
minister, was in August 2015).
Since returning to the presidency, Putin has shown himself to be in stark contrast to
his predecessor. In 2012, he decided to resume the dialogue with Japan over the peace treaty
and even spoke of the possibility of a hikiwake solution to the territorial problem. As he did
not go into details, preferring to retain “strategic uncertainty” over the issue, the Japaneseside interpreted these words as Russia’s readiness for further concessions. In Japan, observers
took special notice of the fact that Putin refrained not only from visiting the Northern
Territories but also from radical statements on the territorial issue, as Medvedev had made.
The impression of “good” Putin was strengthened during the official visit by Prime Minister
Abe to Moscow in April 2013. Although the visit did not lead to any visible progress insettling the problem, it was optimistically covered by the Japanese media as the beginning ofa new, positive stage in Russo-Japanese relations, because the leaders agreed to resume theterritorial dialogue.
Putin assessed very highly the fact that the Japanese prime minister was the only G7
leader to attend the opening ceremony of the Sochi Olympics of 2014. In 2015, he andAbe continued their personal contacts, regularly speaking on the phone on their birthdays,
offering congratulations and exchanging presents,2 and seizing opportunities to share theirpersonal views on international matters.

The Akita dog presented to Putin and the Siberian cat received by Abe were elevated by journalists to a symboliclevel.
2

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55

However, it is true that under Putin’s presidency there has been considerable a militarybuild-up around the Northern Territories, including the reinforcement of Russian troops,
wide-scale construction of military objects on the islands, and an increasing numberof overflights near Japan’s border. In 2015, to the irritation of the Japanese side, Russia
adopted an ambitious ten-year program of economic development on the Kuril Islands andcompleted, in September 2014, the construction of a new airport on Iturup. These facts
show that, after 2012, Moscow demonstrated not two policy options embodied by different
political leaders but rather a single “sticks and carrots” policy, seemingly contradictory but
coherent enough and evidently aimed at making Japan more compliant. Moscow tries
to revitalize relations with Japan by giving Japan vague promises, on the one hand, and“punishing” it for improper behavior (i.e., joining the sanctions policy and following orders
from Washington), on the other.

The U.S. Factor
Does Russia matter for the U.S.-Japan strategic relationship? Both the regional and global
contexts of the “Russian problem” are important. In East Asia, the U.S.-Japan relationshipfaces multiple threats that highlight its raison d’être. Among the main reasons frequently
mentioned for its existence are the necessity to contain China, given its military andeconomic rise; the danger from North Korea; the existence of numerous territorial spatsand problems of the historical past; and the absence of other mechanisms of international
security in East Asia. From this point of view, it is clear that Russia does not matter much.
Its status in the economic relations of Asia is still low, and its voice in regional organizations
is not loud enough to influence the strategic balance in East Asia. Russian Siberia and theFar East are underdeveloped territories, facing a sharp demand for foreign investment.
Fully realizing the weakness of its role in regional trade and economic relations, Russia is
involving these territories in the existing economic integration efforts. In the regional geoeconomics of East Asia, Russia is more an object of external influence than an independent
actor. As far as Russian military activity in the region is concerned, neither the United States
nor Japan prioritizes it in the list of dangers, treating Russia mostly as an auxiliary factor
for regional strategic balancing. In this context, their main concern with Russia is that it
will draw too close to China, whatever the reason—due to economic sanctions, diplomatic
isolation, or overlapping interests and identities.
Yet the Russian component of the U.S.-Japan strategic alliance is perceived differently
by Washington and Tokyo. As for the United States, one should understand that the global
context of the U.S.-Japan partnership is more important than the regional situation in East
Asia, in which Russia is treated by Washington as an actor that can be ignored. Therefore, it
wants Japan to pursue a policy of global diplomatic isolation of Russia, including sanctions.
In light of Russia’s ongoing posturing in Europe and its wider-ranging adversarial stance56

JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

against the West, the United States evidently is opposing not only Japan’s rapprochementwith Russia, but even the resumption of high-level political contacts between Moscow andTokyo, viewing them as a method to break the consolidated Western position. U.S. officials
voiced their dissatisfaction with Japan’s intention to invite Putin to Japan. On September
22, 2015, State Department spokesman Mark Toner said, “We’ve been very clear in sayingthat we don’t believe that it’s time for business as usual with Russia given their behavior ineastern Ukraine.” Washington wants Tokyo to take part in “punishing” Russia on the global
level, but not crossing a line that would lead to a qualitative leap in Russo-Chinese militaryties that could change the strategic balance in Asia.
As for Japan, its approach is two-fold and ambiguous. On the one hand, as a loyal
U.S. ally and member of the G7, it is eager to show solidarity with the West and has torefrain from pursuing excessively close political ties with Moscow. Japan is anxious about
its Western partners’ reaction to its effort to build a special dialogue with Moscow. Most
experts agree that, given U.S.-Russian relations, Russia will still be excluded from the G7
summit in 2016 hosted by Japan. This situation helps us to understand the reason for theanguish of Tokyo policymakers, which results in a half-hearted policy towards Russia. For
example, Kishida’s visit to Moscow in preparation for Putin’s visit to Japan was postponedseveral times and, according to rumors, occurred in September 2015, only due to a personal
kick from Abe.
From Russia’s perspective, one can hardly detect any strong impacts that its relations
with Tokyo have on the U.S.–Japan strategic partnership. That is, the state of political ties
between Tokyo and Moscow has not had any impact on the alliance. When there was ahoneymoon in Russo-Japanese relations in in the period of friendship between Boris and
Ryu (Russian President Yeltsin and Japanese Prime Minister Hashimoto) in the late 1990s,
nothing extraordinary happened in U.S.-Japan relations. Regardless of its relations withJapan, Russian policy towards the United States is motivated by other factors, mostly the
global context. Japan is traditionally not an independent factor in Moscow’s diplomatic
outlook, especially at present when old stereotypes are reactivated. Rather, Japan, in Russianpoliticians’ eyes, is a subordinate country with no powerful say in world politics. It is true
that, unlike during the Soviet period, Russia refrains from openly blaming the U.S.-Japan
alliance, at least officially. But this is not because Moscow sees the Japanese security policy as
justifiable in view of the military rise of China—many people in Russian decision-making
bodies tend to think that the U.S.–Japan security treaty still restrains Japan from becoming a
military great power or choosing the nuclear option.
At first glance, Russia looks as if it is trying to split Japan and the United States, but,of course, it is not so naïve as to seriously hope to do so. Russia counts on Japan’s intrinsic
pragmatism and its drive towards a broader posture in the region. Therefore, Moscow’s
appeal is based on Japan’s own national interests, which do not necessarily coincide with

RUSSIA’S APPROACH TO JAPAN UNDER VLADIMIR PUTIN

57

those of the United States. Russia tries to attract Japan with the potential benefits it could
gain through fairer relations with Moscow, both economic gains and Russia’s neutral stanceon Japan’s competition with China.

The China Factor
There is also a clear understanding that Russia’s diplomatic gridlock with the Westhas already resulted in Russian military posturing in the Pacific and led to a stronger
convergence with Beijing. Some analysts insist that a persistent Japanese “hedging” policy
against Russia is fraught with a new bloc-division system in Asia, in which Russia andChina would jointly oppose the United States and their allies, including Japan. The scenario
of a Russo-Chinese rapprochement in the military sphere is seen in both Washington andTokyo as a nightmare. Yet this trend should not be overstated. There is a widespread illusionthat Russia can form a sort of alliance with China. Though many Western experts position
Russia in the “Chinese pole” in the emerging bipolar system, such a conclusion is not basedon facts and contradicts historical experience. China has never pursued a policy of military
blocs, and Russia has recent negative memories of confrontation with Beijing. Besides,
becoming “a younger sister,” contrasting with its recent status as “older brother” in its
relations with China, is not very popular, not only among ordinary citizens but also among
policymakers.
It is true that Russia is strengthening relations with China, especially in the military
and technical spheres. The Chinese market is pivotal, as its share in Russian arms exports
is more than 40 percent.3 In November 2015, Russia and China signed a new, $2 billion
contract for the delivery of 24 Russian Sukhoi Su-35 fighter jets.4 Beijing is eager to get
access to Russian military, high-tech products, like anti-aircraft S-400 Triumf missile
systems, new generation Armada combat vehicles, and Yasen-class nuclear-powered attack
submarines. The other side of the story is that Russia is anxious not to let China resort
to unauthorized copying, as happened with its Russian-made Su-27 fighters that weremodified into Chinese J-11 fighters.
Against this background, Russian supplies of arms to China are based on the premisethat China is neither a potential enemy nor a loyal ally, but a solvent client towards whom
Russia does not bear any “moral” reservations. Moscow feels itself free to develop military
and technical cooperation with Asian countries, like India or Vietnam, that are treated by
Beijing as geopolitical rivals. With India, Russia supports an even higher level of technical“Začem Rossija Vooružaet Kitaj?” [Why is Russia Arming China?]. Vlasti.net. July 11, 2010. http://vlasti.net/
news/95316.
4“Russia, China sign $2 Billion Contract on Delivery of Su-35 Fighters.” Sputnik News. November 19, 2015. http://sputniknews.com/military/20151119/1030368307/russia-sells-china-billions-dollar-su35.html.
3

58

JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

cooperation than with China. For example, it pursues a joint project with New Delhi forthe development of a fifth-generation fighter, while the most recent contract with Beijing
involves only the supply of a fourth-generation fighter. To the dissatisfaction of Beijing,
Lukoil participates in a joint project with Vietnam for development of an oil field in theSouth China Sea, which is the object of Beijing’s territorial claims.
There is a clear understanding in Moscow that it cannot rely on China to be a fullfledged diplomatic ally. After all, China has not supported (though not criticized) Russia’s
position on the Ukrainian crisis, abstained in the United Nations on the Crimean issue,
and refused previously to acknowledge the independence of Abkhazia and South Ossetia.
Therefore, Moscow, in its Asian policy, prefers to stay pragmatic and avoid any romantic
illusions, although towards China this is less noticeable than towards Asian countries
involved in the U.S.-led containment strategy against Beijing. Russia carefully tries to keepa balanced position between China and Japan, which proved effective in the mid-2000s,
when Moscow hedged against both partners in selecting the route for its first Siberian
oil pipeline.5 Russia consistently resists China’s offer to strike a deal, in which Beijing
acknowledges the Northern Territories as Russia’s, and Moscow takes the Chinese side in
the Senkaku/Diaoyu dispute. Russia’s main motive is not to add such sensitive issues to the
Russo-Japan list of mutual grievances. Sometimes, however, Russia does prioritize Japan.
For example, it supported Japan’s candidacy to join the Arctic Council (as an observer) in
2012, while rejecting the candidacy of China. It is because Russia wants to keep the door
open for political dialogue with Japan, anticipating reconciliation in the face of mutual
strategic challenges and threats.

The Japanese Perspective
Japan’s Russian policy has a much stronger domestic component than that of any othercountry in the G7. Tokyo’s persistent revival of the Northern Territories issue reflects thedomestic concerns of the Abe administration. This issue is generally perceived by theJapanese public as a problem of national dignity. Several generations of Japanese have been
indoctrinated with the idea that the Soviet Union committed an act of aggression against
Japan by occupying these territories, so any retreat from the tough “four islands” position is abetrayal of the nation. As far as the generally pragmatic Japanese political elite is concerned,
their policymaking towards Russia remains hostage to public sentiment. Under Japan’s
electoral system, its politicians are very sensitive to the views of ordinary citizens (which aresometimes shaped by media reports). As Russia is not vital for Japan’s economic interests,
it is not politically risky to give it an extra bashing. Thus, the Russian vector of Japanesediplomacy is, to a large extent, driven by nationalistic sentiment.
5

Finally, the route was chosen to ensure the oil supplies to both countries.

RUSSIA’S APPROACH TO JAPAN UNDER VLADIMIR PUTIN

59

For Abe, the central topic for his future summits with Putin is the issue of the islands.
Japan feels itself to be in a much stronger position than before the Crimean affair. In Japan’seyes, after Russia opened a Pandora’s box by breaking the principle of inviolability of state
frontiers, a new window of opportunity has appeared for changing the situation with the
Kuril Islands. Many Japanese think that Putin is capable of showing “generosity” and might“return” the Northern Territories to Japan (starting from the premise that, as Putin gained
a new, larger territory, losing small islands would not be domestically painful for him).
Besides, Tokyo reckons that the growing instability in the Russian economy will makeRussia more compliant, and make Putin more willing to sacrifice something for Japan’s tacit
approval of the new status of Crimea.
No less important for Japan in its relations with Russia is the China factor. Given
the need for leverage with China, Japan tries to keep its ties with Moscow at least normal
and refrain from excessive assertiveness over the Northern Territories–-officials and chief
negotiators are much more reserved in their statements than are “opinion leaders.” Yet Japan
has not determined a viable, long-term strategy towards Moscow. The decisions are madeon the spot, reacting to the situation in Russo-American relations, the situation aroundUkraine and Syria, or the state of the Russian economy. Until now, this wait-and-see
approach proved to be not the worst choice for both parties, given the relatively mild level ofmutual assaults and the ongoing political contacts—a situation quite different from Russia’s
relations with other G7 countries.

Conclusion
Japan and Russia are both declining powers with the perspective of being pulled down tothe position of secondary players in East Asia. They are both overshadowed by an assertive
China. Japan needs balanced and pragmatic relations with Russia to withstand China’spressure in connection with the Senkaku/Diaoyu problem as well as the growing militarybuild-up of China’s navy, which sets off alarm bells over the problem of security for its“remote islands.” For Tokyo, it is important to have additional guarantees against the threatof a strategic and military bloc between Beijing and Moscow on an anti-Japanese basis.
Japan is extremely nervous about Russo-Chinese military and technical cooperation, though
its fears are sometimes exaggerated and based on worst-case scenarios.
For Russia, which does not want to fall under excessive economic dependence on
China and become its “younger sister,” “fair” relations with Japan, especially investment
cooperation, would become a part of a grand “hedging policy” toward China. Moscow
uses a “sticks and carrots” approach, continuing a strategy of economic development andmilitary build-up on the South Kurils, on the one hand, and teasing Japan with hopes abouta “mutually acceptable” solution to the territorial issue, on the other. This game could lastindefinitely, which is to Russia’s benefit, as the publics in both countries would consider

60JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

any imaginable solution to be a “betrayal” and mean political suicide for their leaders.
Meanwhile, ongoing administrative control over the disputed islands will, sooner or later,
give Russia irrefutable arguments to treat this issue as settled.
For Russia, Japan together with the United States counterbalances China, and China
counterbalances Japan. In this context, Moscow does not consider security arrangements
conducted within the U.S.-Japan security alliance to be a threat, and, moreover, regards
them as a balancing factor in the East Asian security paradigm. Both countries face similar
security challenges in anticipation of the unpredictable situation on the Korean Peninsula.
The test of a “hydrogen bomb” in January 2016, which took place near the Russian border,emphasized the need for coordinated action in the United Nations and other international
institutions. Japan wants to demonstrate that it has the capability to influence the regional
political agenda; Russia wants to show that it is still a player in East Asia. Together, they canenhance their political positions in Northeast Asia.
But contrary to Japan’s priority, which is mostly in the geopolitical sphere, Russia
bases its Japanese policy on economic interests. Russia needs Japan as a market for its
hydrocarbons, a source of investment and technology, and a partner in the developmentof the Arctic region. Besides, Russia hopes that Japan would become a “weak link” in theWestern coalition and help Moscow to withstand the consequences of the diplomatic
isolation encountered after the Ukrainian crisis. In Russia’s view, closer relations could
contribute to a safer international environment in East Asia. Moscow understands that it
is not too late to foster relations with Japan, but as in the case of Japan, it has no clear-cut
strategy and takes a wait-and-see approach based heavily on its assessment of the global
situation.

Chapter 6

Japan’s Approach toward
Russia under Shinzo Abe:
A Strategic Perspective
Yasuhiro Izumikawa

On September 28, 2015, Japanese Prime Minister Shinzo Abe met Russian President
Vladimir Putin in New York, where they confirmed that both countries would continue toexplore the best timing for Putin to visit Japan, in accordance with the agreement reached attheir previous meeting alongside the November 2014 Asia-Pacific Economic Cooperation(APEC) summit in Beijing.1 This was the eleventh meeting that Abe held with Putin, sinceAbe took office.
Ever since the end of the Cold War increased the possibility of resolving the territorial
dispute between Russia and Japan over the Northern Territories (hopporyodo), Japaneseleaders have been seeking to conclude a Russian-Japanese peace treaty.2 Among theseleaders, Abe stands out in his relentless pursuit of rapprochement, reflecting his personalcommitment to achieving a diplomatic breakthrough. Abe is also better positioned thanother politicians to deal with Russia on the territorial issue, because his reputation as apatriotic nationalist would enable him to fend off criticism when he needs to “sell” to theJapanese public a compromise on the issue. Another reason for this intense pursuit may
have something to do with Abe’s foreign policy advisors. When he was the top bureaucrat
in the Ministry of Foreign Affairs (MOFA) under Prime Minister Taro Aso, Shotaro Yachi,
the director of Japan’s newly formed National Security Council (NSC), once launched a trial
balloon for the idea that Russia and Japan split the four Northern Territories in half in termsof total square miles.3 But there is also a strategic rationale, or what the current Japanese
Ministry of Foreign Affairs of Japan. “Japan-Russia Summit Meeting on the Occasion of the United Nations
General Assembly.” September 29, 2015. Accessed October 17, 2015. http://www.mofa.go.jp/erp/rss/northern/
page1e_000053.html.
2
Togo, Kazuhiko. “Eurasian Diplomacy in Japan, 1997–2001.” Nippon.com. March 13, 2014. http://www.nippon.
com/en/features/c00205/. Also see his chapter in this book.
3
Interview with Shotaro Yachi. Mainichi Shimbun. April 17, 2009. The origin of this idea may have come from
Akihiro Iwashita, professor at the Slavic-Eurasian Research Center, Hokkaido University. Iwashita, Akihiro.
Hoppō Ryōdo Mondai: 4 demo 0 demo 2 demo naku [The Northern Territories Issue: Neither 4 nor 0 nor 2]. (Tokyo:
Chuokoron Shinsha, 2005).
1

62JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

government perceives to be one, undergirding Japan’s current policy toward Russia.
This chapter aims to clarify how strategic factors influence the Abe administration’s
policy toward Russia. It assesses how Japan’s interests match or diverge from those of Russia,
concluding with the implications of the aforementioned factors for Japan’s approach toward
Russia and for regional security dynamics.

Strategic Factors Influencing the Abe Administration’s
Russia Policy
Three factors interact with one another and significantly influence the Abe administration’s
Russia policy. The first is China, which has increased in weight in recent years. The second
is the United States, which has been significant since the Cold War days. The third is
Ukraine, which has dramatically altered the context in which the Abe administration
pursues Russia policy.

The China Factor
One of the important factors influencing the Abe administration’s Russia policy is therise of China. While China has influenced Japan’s security policy for some time, SinoJapanese security competition has intensified and caught the eyes of the Japanese public
since skirmishes around the Senkaku/Diaoyu Islands began in 2010. China’s increasing
assertiveness in the South China Sea is also a cause for concern. This heightened awarenessof security challenges arising from China drives Japan’s Russia policy in two ways. First,
balance of power considerations incline Tokyo to Russia, increasingly as a potential
counterweight vis-à-vis China. This does not mean that Tokyo is hoping to make ananti-Chinese coalition with Russia; what it means is that Japan expects that better relations
between Moscow and Tokyo can have restraining effects on China’s behavior, or at least thatTokyo needs to prevent Moscow from becoming too closely aligned with Beijing.4
Second, the impact of China’s increasingly assertive maritime activities drives Japan’s
security policymakers to look more toward the south, thus making it more desirable
to stabilize the security environment in the north by improving relations with Russia.5
Coincidentally, military overflights conducted by the Russian air force have increased inrecent years; so it might be expected that Japan’s Air Self-Defense Forces could concentrate
their resources in the south, if the conclusion of a Russian-Japanese peace treaty leads toThis is dubbed the wedge strategy. See Crawford, Timothy. “Preventing Enemy Coalitions: How Wedge Strategies
Shape Power Politics.” International Security 35, no. 4 (Spring 2011): 155–189.
Izumikawa, Yasuhiro, “To Reward or Coerce? Theorizing Wedge Strategies in Alliance Politics.” Security Studies 22,
no. 3 (Summer 2013): 498–531.
5
For a concise view on this point, see Wallace, Corey J. “Japan’s Strategic Pivot South: Diversifying the Dual
Hedge.” International Relations of the Asia-Pacific 13, no. 3 (2013): 479–517.
4

JAPAN’S APPROACH TO RUSSIA UNDER SHINZO ABE

63stability along Japan’s northern borders (see Table 1). The fact that the territorial disputes
vis-à-vis South Korea (Takeshima/Dokdo) and China (Senkaku/Diaoyu) have become
tense in recent years may also encourage the Japanese government to resolve the Northern
Territories dispute with Russia, first, so that it may concentrate its diplomatic efforts onthese territorial issues.

Table 1. The number of scrambles conducted by
Japan’s Air Self-Defense Forces.
Year

RussiaChina

Others

Total

2010

264

96

26

386

2011

247

156

22

425

2012

248

306

22

567

2013

359

415

13

810

2014

473

464

6

943

Source: Press Release by Joint Staff, Japan’s Self-Defense Forces, April 2015.

6

While the rise of China is influencing Japan’s strategic calculus regarding the potential
benefits of improved Russia-Japan relations, Japan’s Russia watchers argue that the same
factor is simultaneously inducing Russia to seek security cooperation with Japan.7 It is not
too difficult to imagine how the balance of power logic induces Russia to watch China’s
increasing capabilities warily. Even though Russia and China resolved all their territorial
problems about a decade ago and often refer to their “strategic partnership,” the fact thatthe two countries share such a long land border makes Russia very sensitive to China’s
ever-increasing power in the border regions. Indeed, China’s increasing economic clout in
Russia’s Far East is a significant contributor to the rise of Russian nationalism in the region.
China’s increasing activism in Central Asia under the banner of “One Belt, One Road” canalso be something that Moscow watches warily, in particular when Russia seeks to regain
its influence in the region under Putin.8 In addition, China’s maritime expansion into
the Arctic Ocean seems to be another contributing factor to Russia’s quiet, but resentful,wariness toward China. Shinji Hyodo, a Russia specialist at Japan’s National Institute ofDefense Studies, points out that China’s active pursuit of maritime routes in the north
Ministry of Defense of Japan, Joint Staff, “Heisei 26 Nendo no Kinkyū Hasshin Jisshi Jyōkyō ni tsuite” [On the
Status of Implementing Scrambles in Fiscal Year 2015]. April 15, 2015. Ministry of Defense of Japan. http://www.
mod.go.jp/js/Press/press2015/press_pdf/p20150415_01.pdf.
7
Sato, Masaru. “Chugoku o Keikaishi, Sekkinsuru Nichiro” [Japan and Russia Drawing together and Guarding
against China]. Chuokoron. April 2013. http://www.chuokoron.jp/2013/03/post_176.
8
For an incisive view on Russia’s reaction to this Chinese scheme, see Gabuev, Alexander. “Post-Soviet States
Jostle for Role in One Belt One Road Initiative.” Carnegie Moscow Center. August 6, 2015. http://carnegie.
ru/2015/08/06/post-soviet-states-jostle-for-role-in-one-belt-one-road-initiative/iel1.
6

64JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

alarmed Russian military specialists so seriously that the Russian government conductedlarge-scale military exercises in the Sea of Okhotsk in 2011 and 2012 in order to signal
Moscow’s displeasure to China.9 It is no surprise that these factors encourage Russia toseek improved relations with such countries as India and Japan as a potential counterweightvis-à-vis China. Russia’s willingness to hold a “two plus two” meeting with Japan should beunderstood in this context.10 This is the reasoning that fuels optimism about security driving
closer relations.
It is important to note, however, that the ways in which the rise of China influence
Russia and Japan somewhat diverge. Precisely because of the long land border it shareswith China, Russia needs to avoid antagonizing China. This necessity intensifies
significantly as Russia’s relations with the West deteriorate. Also, precisely because of theshared land border, Russia is in a position to gain enormous economic benefits from
China’s ever-increasing demand for energy. At a time when the Western European
markets face increasing uncertainty due to the ongoing crisis in Ukraine, Russia cannot
lose the Chinese market. ( Japan, in this regard, still remains a potential market for Russia.)
Simply put, Russia has much more to lose or gain from relations with China thanJapan does.
In addition, the fact that China’s maritime activities worry Russia enhances thestrategic value of the disputed Northern Territories islands, Kunashiri and Etorofu Islands
in particular.11 This poses a problem for Japan in its pursuit of a negotiated settlement of
the territorial dispute, as this makes it more difficult to win territorial concessions on theseislands.
These differences between Russia and Japan lead to different expectations foreach other in East Asia. From Japan’s viewpoint, Russia can be a potentially effective
counterweight to China. Although the Abe administration (or any Japanese government,
for that matter) does not expect to create a coalition with Russia to contain China, it
does seem to expect strategic benefits from improved relations with Russia. For Russia,
closer relations with Japan would improve its strategic position vis-à-vis China and bringeconomic and political benefits otherwise difficult to obtain. However, it probably does
not intend to worsen its relations with China by collaborating with Japan, unless China
becomes aggressive in its approach toward Russia. This means that it is unlikely that Russia

Hyodo, Shinji. “Dainiji Putin Seiken no Gaikō, Anzen hosho Seisaku: Chūgoku to Hokkyokukai Mondai oChūshin ni” [The Diplomacy and Security Guarantee Policies of the Second Putin Administration, Focusing on
China and the Arctic] in Japan Institute for International Affairs, Roshia no Seiji Sisutemu no Henyo to Gaiko Seisaku e
no Eikyo. 85–86, 2013, http://www2.jiia.or.jp/pdf/resarch/H24_Russia/8_hyoudou.pdf.
10
The first Russia-Japan “two plus two” meeting was held in 2013, but further meetings have been postponed, after
the Ukrainian crisis.
11
Hyodo. “Dainiji Putin Seiken.” 86.
9

JAPAN’S APPROACH TO RUSSIA UNDER SHINZO ABE

65

will overtly support Japan’s positions when China and Japan are in conflict.12 It is more
likely that Russia’s closer relations will serve as Russia’s effective bargaining chip to winsome compromises from China.

The United States Factor
If the China factor induces Russia and Japan to get closer, the United States factor has been
traditionally constraining Russia-Japan relations. During the Cold War, the United States
was wary whenever Japan showed signs of seeking a rapprochement with the Soviet Union.
During the mid-1950s, for instance, the U.S. government demanded that Japan not deviate,
even slightly, from the U.S. interpretation of the San Francisco Peace Treaty, making it
difficult for Tokyo to normalize relations with Moscow. Tokyo was not able to oppose how
Washington wanted Tokyo to conduct policy toward the Soviet Union. This factor remains
valid even today; since the U.S.-Japan alliance is the cornerstone of Japan’s security strategy,
it needs to avoid diverging excessively from U.S. positions on various issues.
However, it is important to note that, while the traditional U.S. position on JapanRussia relations leads many in Japan to believe that Washington is, in principle, opposed to
the resolution of the Northern Territories dispute and the resulting better relations between
Moscow and Tokyo, this is not necessarily the case. After the end of the Cold War, thestrategic rationale for Washington to block Japan’s overtures toward Russia disappeared.
When the U.S. government under President Bill Clinton was seeking to solidify the new
Russia as a market-oriented, democratic state, it even pressured Japan to extend economic
assistance toward Russia, without clinging to the Northern Territories dispute.13 Thisreveals that the U.S. position on Japan-Russia relations is determined by the nature of U.S.
relations with Russia and U.S. thinking about the degree of danger Moscow is posing to theinternational community.
In this sense, Abe probably felt optimistic that the U.S. factor would not hinder his
initiative toward Russia when the Obama administration was pursuing its “reset” policy
toward Russia.14 Indeed, U.S.-Russia relations improved (albeit modestly) during the period
when Obama and President Dmitry Medvedev established a working relationship. The
United States would not have opposed (or might have even supported) Japan, if Japan had
seriously attempted to resolve the Northern Territories issues, including rewarding Russia
Akihiro Iwashita points out the tendency among some of Japan’s security experts to exaggerate the differences
between Russia and China. Akihiro Iwashita, Hoppō Ryōdo, Takeshima, Senkaku, Kore ga Kaiketsusaku (Tokyo: Asahi
Shimbun Shuppan, 2013). 230–231.
13
Miyashita, Akitoshi. “Gaiatsu and Japan’s Foreign Aid: Rethinking the Reactive-Proactive Debate.” International
Studies Quarterly 43, No. 4 (December 1999), 695–731.
14
Angela Stent calls Obama’s policy the “fourth” reset policy by the United States since the George H. W. Bushadministration. Stent, Angela E., The Limits of Partnership: U.S.-Russia Relations in the Twenty-First Century(Princeton: Princeton University Press, 2014).
12

66JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

in a manner deemed to be at odds with U.S. strategic objectives during the period. Yet
Abe returned as prime minister only in the fall of 2012, by which time Putin’s return topower and more assertive foreign policy had clouded U.S.-Russia relations. (The Japaneseleaders before him had been too weak, domestically, to seek a compromise solution for the
territorial dispute, and he had been in office earlier for too short a time.) This timing was
not fortuitous; Abe regarded Putin as an ideal Russian counterpart, who was politicallystrong enough in Russia to be able to swallow a compromise solution, or in his own words,“hikiwake.”15 Putin’s policy decisions caused the deterioration of U.S.-Russia relations,complicating Abe’s pursuit of him.
The U.S. factor influences Japan’s policy toward Russia indirectly, as well; the difference
between Moscow and Tokyo with regard to China is magnified when U.S.-Russia relations
worsen. For Russia, the United States is the most serious obstacle to its attempt to regain
influence beyond its current borders. When U.S.-Russian relations are tense, therefore,
China serves as a useful partner with which Russia can defend its interests against theUnited States, regardless of whether their partnership is genuine or just a marriage of
convenience.16 The result is that it becomes difficult for Japan to wean Russia away from
China when the United States takes a tough attitude toward Russia.

The Ukraine Factor
The prospect of success for Abe’s Russia policy diminished when the Ukrainian crisis
began in February 2014. After the pro-Russian government in Kiev collapsed in the
midst of popular protests, Putin quickly responded and annexed Crimea in clear violationof Ukraine’s sovereignty and international law. As the crisis escalated, relations between
Moscow and Washington plummeted. Accordingly, the United States and Europeans
imposed graduated sanctions against Russia. Japan, as a self-claimed global ally of theUnited States and a major player in the West, reluctantly joined the sanctions. Furthermore,
the Abe administration had no choice but to shelve its invitation for Putin to visit Tokyo.
Despite the relatively mild impact of Japan’s sanctions, Russia reacted adamantly, blaming
the Japanese government for not acting independently of—and for taking sides with—the
United States. Russian officials have become increasingly uncompromising on the territorial

In Japan’s policy circles, not a small number of experts believe that Putin is serious about improving relations withJapan, and this perception is not groundless. During Putin’s first term, he and Prime Minister Yoshiro Mori were inserious negotiations to resolve the territorial dispute. Since Putin came back to power in 2012, he has emphasized
Russia’s “pivot to Asia” and has occasionally expressed his continued willingness to improve relations with Japan. In
addition, Japanese media widely reported Putin’s use of the term “hikiwake,” interpreting it as a sign that Putin might
be willing to go beyond the so-called “two islands plus alpha” solution. In this author’s view, it is difficult to believethat this is Putin’s intention.
16
Lo, Bobo, Axis of Convenience: Moscow, Beijing, and the New Geopolitics (Washington, DC: Brookings Institution
Press, 2008).
15

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67

issue, and Russia has begun to partner with China more seriously than ever to counter theWest.17
The U.S. factor is not the only cause of Japan’s joining the sanctions against Russia. It
is difficult for Japan to treat Russia’s actions in Ukraine as a fire on a distant shore, when
Japan is trying to garner support from the international community—from Europeans inparticular—to oppose China’s behavior in the South China Sea. Since Ukraine for Japan isquite similar to the South China Sea for Europe, Japan’s unilateral accommodation toward
Russia could give European capitals a perfect justification for accommodating China inpursuit of economic benefits.
Even in this difficult situation, the Abe administration is still pursuing a diplomatic
breakthrough with Russia, as Abe is reportedly planning to “unofficially” visit Russia andmeet Putin outside Moscow.18 As long as Ukraine poisons relations between Russia and theWest—the United States, in particular—the difficulties confronting the Abe administration
will persist.

Conclusion
What do the aforementioned security calculations by Tokyo and Russia imply for Japan’s
Russia policy and beyond? First, the increasingly overlapping security interests of Japanand Russia widen the window of opportunity for improving their bilateral relations andpossibly resolving the Northern Territories dispute. From Japan’s perspective, there is noinherent reason why it should not pursue the opportunity, assuming Russia is willing todeal with the territorial issue in a way that is mutually satisfactory. After all, seventy years
have passed since the end of World War II, and it is almost sixty years since Russia andJapan normalized diplomatic relations, while putting the territorial question on a backburner. Many of the former residents who lived on the four disputed islands are passing,and even those who are still alive have only been allowed to visit the islands on rare andlimited occasions involving non-visa, people-to-people exchanges; even those visits weresuspended in May 2015, because the legal status of the islands is “undetermined,” according
to the Japanese government. The former residents and their children may simply want the
freedom to visit the islands, and may have less interest in the total return of the four islands,
than previously.19 The Northern Territories are also a historical legacy of World War II,
Komaki, Akiyoshi, “Hoppō Ryōdo Mondai Jōhoshinai Shisei Senmei: Roshia Gaimusho [Russia’s Foreign
Ministry Intends not to Compromise on Northern Territories Issue], Asahi Shimbun, September 19, 2015, http://
digital.asahi.com/articles/ASH9M4FT0H9MUHBI00Z.html.; Gabuev, “Post-Soviet States Jostle for Role in One
Belt One Road Initiative.”
18
Funakoshi, Takashi, “Shushō Haru nimo Roshia Hikōshiki Hōmon e: Pūchin-shi to Denwa Kyōgi” [Prime
Minister Looking toward Unofficial Meeting with Russia in Spring: Telephone Conference with Mr. Putin], Asahi
Shimbun, January 22, 2016, http://digital.asahi.com/articles/ASJ1Q6CR8J1QUTFK01F.html.
19
Iwashita, Hoppō Ryōdo, Takeshima, Senkaku, 83–84, 99–101. Iwashita’s conclusion is based on a survey of former
residents of the disputed islands and their descendants, conducted in conjunction with Hokkaido Shimbun.
17

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

and Russia is one of only two remaining states (the other being North Korea) with which
Japan has yet to have a peace treaty. Now that these humanitarian and historical reasons for
improving Russian-Japanese relations are reinforced by security calculations, as explained
above, the Japanese government is likely to pursue the settlement of this issue, no matter
who may be prime minister.
At the same time, however, the Japanese government should be realistic about how far
Russian-Japanese security cooperation may alleviate the challenge of a rising China. While
there are more areas of possible cooperation between Moscow and Tokyo than in the past,
Russia will be reluctant to antagonize China by moving close to Japan. Japan also needs
to recognize that Russia is unlikely to “come all the way” to satisfy Japan’s position on the
territorial dispute, in particular on Kunashiri and Etorofu Islands.20 Based on this author’s
historical analysis of the Soviet-Japanese diplomatic normalization negotiations in the mid1950s and the added strategic value of Kunashiri and Etorofu, due to China’s increasing
maritime activities in the north, it is difficult to predict that Russia will agree to conclude apeace treaty, unless Japan agrees to accept, in some form, the sovereignty of the two islands.21
This, then, requires the Abe administration to prepare the Japanese public for a territorial
compromise that Japan will ultimately need to make.22 Furthermore, the Ukraine crisis has
made it extremely difficult for the Abe administration to achieve a diplomatic breakthroughwith Russia without hurting its relations with the United States and European states.
In addition, there is a strong need for U.S.-Japan policy coordination in their respective
approaches toward Russia. This coordination cannot be one-way; it must be a two-way
street, and more than just the two allies keeping each other informed of their Russia
policies. Ideally, a starting point of such coordination should be a joint assessment of thenature of Russian-Chinese relations. In this author’s view, it would be extremely difficult
for Tokyo to conclude a peace treaty while Russia’s relations with the West remain as theyare. Nonetheless, Tokyo and Washington, at least, can agree that it is desirable to avoid
In this regard, some recent initiatives by the Abe administration, such as the Kishida-Lavrov and Abe-Putin
meetings in September 2015, are puzzling even in the eyes of those who advocate the “two plus alpha” solution.
These meetings were held while Russia intervened militarily in Syria and while its officials were beginning to express
the view that the territorial question was already resolved. Komaki, Akiyoshi, “Nichiro Gaisho Kaidan: Honto ni
Yarubeki Dattanoka?” Asahi Shimbun, October 13, 2015. The fact that the meetings were held may indicate that the
Abe administration is expecting too much from Russia, either in terms of Russian security cooperation toward Japanvis-à-vis China, or the territorial compromise that Russia is prepared to accept.
21
Izumikawa, Yasuhiro, “Nisso Kokko Kaifuku Kosho o Meguru Nihon no Jishu Gaiko Mosaku to America no
Tainichi Senryaku,” Kokusai Seiji, No. 144 (February 2006), 130–145. For an updated version of this analysis, see
Izumikawa, Yasuhiro, “Japan’s Multiple Quests for Independent Foreign Policy and the Soviet-Japanese Diplomatic
Normalization, 1955–1956,” presented at the 60th Anniversary Symposium, Slavic-Eurasian Research Center,
Hokkaido University, December 10–11, 2015.
22
Abe has been trying to do this by deemphasizing the territorial issue and emphasizing the “abnormality of theabsence of a Russian-Japanese peace treaty after seventy years of WWII” in his public speeches. However, moreneeds to be done. This is a difficult political act, but it has become less difficult because the Japanese government canpoint to the territorial problems in the south and argue that it is imperative to settle the problem in the north.
20

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69

coercing Russia into overly dependent relations with China; they need to assess the natureof Russian-Chinese relations carefully and then build upon their respective approaches in a
way that does not undermine each other’s policy objectives.
What may be the regional repercussions of Russian-Japanese bilateral relations andthe implications for regional security? For Japan, the U.S.-centered alliance system in
East Asia is the centerpiece of its security policy. This fact will not change, even if Japan
succeeds in dramatically improving relations with Russia. Russia, for its part, will attempt
to use improved relations with Japan in order to enhance its status and exert its influencein the Asia-Pacific region. If Russia tries to undermine the U.S.-centered alliance system,
which it may regard as an obstacle to becoming a more important player in the region,
this would cause a problem for Japan. However, Russia may not do so, because it may findsome utility in the U.S.-centered alliance system as an effective safeguard against China’s
increasing maritime activities. In fact, before the Ukrainian crisis, there were signs that
Russia wanted to expand Russian-Japanese maritime security cooperation into a RussianJapanese-U.S. trilateral cooperation.23 Considering this, it may be possible to include Russia
in a future regional security dialogue that stands alongside the U.S.-centered alliance systemin the Pacific. However, such a scenario would remain only hypothetical as long as RussoAmerican relations are strained, due to the crises in Ukraine and Syria.

23

Hyodo, “Dainiji Putin Seiken,” 87–88.

Chapter 7

Implications of Russia-Japan
Relations for the Region
Georgy Toloraya

The Russian-Japanese nexus, so far, has been of minor importance for the Northeast
Asian regional security architecture and the possible creation of regional cooperation
mechanisms. Strained relations between the two because of the Northern Territories
problem (this chapter does not discuss it, but I cannot avoid mentioning the negative
impact of the territorial issue) precluded the sides from discussing, let alone cooperating on,
regional issues (apart, to a degree, from the North Korean problem). Russian policymakers
still do not see Japan as an independent regional actor, as Tokyo’s policies usually mirror
U.S. policies in the region, and they doubt that substantial agreements on regional issues
could be reached without U.S. consent. Also, the growing anti-Chinese mood in Japanesepolicies makes Russia cautious, as it would not dare have separate dealings with the
opponent of its chief strategic partner. So, 160 years after signing their first treaty, 90 years
after reestablishing diplomatic relations after one conflict, and 60 years after reestablishing
relations following another conflict, Russia and Japan remain just neighbors, caring little
about the “common good” and with limited capacity for working together on resolving
regional issues. However, the situation might be changing, due to the growing assertivenessof Japanese foreign and military policy. Japanese Prime Minister Shinzo Abe seems tobe eager to find a way to diversify his foreign policy and improve relations with his giant
northern neighbor. That stance is in sync with Russian President Vladimir Putin’s “turn to
the East” strategy.
Would this Russian “pivot to Asia” be successful without improving relations withJapan? This question is especially important due to Russia’s growing dependence on China,
which, in fact, now monopolizes Russia’s Asian agenda. Could relations be improved
without resolving the territorial issue? Could Putin’s undoubted “national hero” reputation
for reviving Russia’s geopolitical status and strongly defending Russia’s national interest
put him in a position to meet his Japanese counterpart halfway, without internal policy
repercussions and without being labeled a “national traitor”? Could Japanese leaders be boldenough for an historic compromise, which would enormously strengthen Japan’s positionsin the region (including in relations with its other neighbors) and make a Russia-Japan

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

connection an important factor of regional multilateral policies? These questions are key
in determining whether Japan and Russia can enhance their roles in regional affairs bycooperating with each other.

Russia’s Current Asian Strategy
In Soviet times, the severe conflict between Moscow and Beijing limited Moscow’s
influence in Asia. At the same time, Moscow’s relations with Southeast Asian nations
were subject to ups and downs and remained centered on supporting “national liberation
struggles” and countering the United States. Relations with Japan were always strained, andwith South Korea nonexistent. Soviet initiatives on the regional security system were largely
impractical due to deep Cold War divisions within the region. This heritage of a secondaryrole for Asia—dating back even to pre-revolutionary times—lingers, as the Russian political(as well as educated) class is predominantly Eurocentric. After the breakup of the Soviet
Union, the policy of the “new Russia” was centered on the United States and Western
Europe, while relations with Asia were neglected (with the exception of China, which, at
the time, was not the economic and political giant it is today).
The assertion that the current “turn to the East” is just a temporary shift promptedby the deterioration of relations with the West, triggered by the Ukrainian crisis, is notwell based. Even in the 1990s, scholarly discourse on the need for “equality between thetwo heads of the Russian eagle” became quite pronounced. The initial impulse was driven
by “Orientalists” (specialists on Asia), who have always been much less numerous andinfluential than “Occidentalists” (specialists on the West, concentrated in Soviet think tanks,
such as the Institute of World Economy and International Relations and the Moscow State
Institute of International Relations, as well as in the Institute of the United States andCanada). The latter saw the importance of Asia mostly in terms of its growing economic
potential, calling it “a new gate to the industrially-developed world, opening new markets of
weapons, raw materials, and industrial goods for Russia.”1
In 2010, a group of Russian experts, headed by political scientist Vyacheslav Nikonov,suggested the idea of “Russia as a Europacific power,”2 and, soon thereafter, the Russianpresident officially supported the concept of advancing Russia’s integration into Asia andthe Pacific.3 The 2012 Asia-Pacific Economic Cooperation summit was meant to be a
Gadjiev, K.S., Vvedenie v Politicheskuiu Cauku [Introduction to Political Science], (Moscow: Logos, 2000), http://
www.alleng.ru/d/polit/pol017.htm.
2“Russia as a Euro-Pacific Power: New Trends in Asian Regional Architecture and Russia’s Role: Proceedings of theInternational Conference of the Russian National Committee of the Council for Security Cooperation in the Asia–
Pacific (CSCAP),” Moscow, MGIMO, December 9, 2010 (Moscow: Moscow University Press, 2011), http://www.
spa.msu.ru/uploads/files/books/evro_pasif.pdf.
3
President of Russia. “Stenograficheskii Otchet o Soveshchanii po Sotsial’no-ekonomicheskomu Razvitiiu Dal’nego
Vostoka i Sotrudnichestvu so Stranami Aziatsko-Tikhookeanskogo Regiona” [Meeting on social and economic
1

IMPLICATIONS OF RUSSIA-JAPAN RELATIONS FOR THE REGION

73

watershed event on this path—although its impact on Russia’s policy was weaker than
expected.4 In 2014, Putin stressed that this policy was “not in response to sanctions, but is apolicy that we have been following for a good many years now… Why should we not makeuse of our competitive advantages in this area? It would be extremely shortsighted not to doso.”5
The current rebalancing of Russia’s foreign policy with a greater accent on relations
with China and other non-Western powers has become the biggest shift in Russia’s global
strategy since the collapse of the Soviet Union. Different from previous attempts, it is based(or at least is declared to be based) on a program of social and economic development of theRussian Far East to improve its position in the regional division of labor. So far, this strategy
has only been partially successful. Economic crisis in Russia prevents it from actively
pursuing economic goals in Asia. The crisis, in turn, reinforces the lack of experience in
Asian affairs on the part of Russian politicians, bureaucrats, and businessmen. Despitesome success stories, Russia’s economic presence in Asia has not markedly increased, and its
political presence has grown only marginally. Russia’s resources in Asia and the Pacific pale
before those of the United States, especially in economics, where the recent Trans-PacificPartnership agreement signals a new reality of U.S. economic dominance there.
Where does Japan stand? In the absence of political normalization, the importance ofJapan for Russia is in economics, which remains the main motive for the “pivot” to a region
considered the “engine of the global economy.” China has become Russia’s number one
economic partner. However, Japan is lagging behind, as is its place in Russian foreign policy
priorities (in 2015, bilateral trade was estimated to have contracted by almost 40 percent,much more than with China).6 On the brighter side, that means Japan has a strong card toincrease its importance for Russia, when relations warm up.

Can Russia and Japan Join Hands in a New Security Architecture?
In 2012–2013, the conflicting concepts of security architecture, brewing within Associationof Southeast Asian Nations Plus discussions, prompted the Russian foreign ministry tosuggest its own concept—first in the form of the 2010 Russian-Chinese Initiative on
Security in the Asia-Pacific Region and, later, as the goal of proposed negotiations toward adevelopment of the Far East and cooperation with Pacific Rim countries]. July 2, 2010. http://kremlin.ru/events/
president/transcripts/8234.
4
Tikhvin Freight Car Building Plant. “Russian Press Review: APEC Summit - Success for Russia.” September 10,
2012. http://www.tvsz.ru/en/press_center/company_in_the_media/1142.html.
5
President of Russia. “Meeting Of the Valdai International Discussion Club.” October 24, 2014. http://en.kremlin.
ru/events/president/news/46860.
6
Sputnik News, “Russia-Japan trade volume falls by 30 percent,” January 13, 2016, http://sputniknews.com/
business/20160113/1033058852/russia-japan-trade.html.

74JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

comprehensive pan-Asian treaty on security.7 This suggestion received approval at the 2013
East Asia Summit. In 2014, Russia proposed an action plan, which was based on wellrecognized principles, such as respect for fundamental freedoms and human rights, noninterference in internal affairs, settlement of disagreements and disputes by peaceful means,denunciation of actions aimed at overthrowing governments or undermining stability,
the defensive character of national militaries, and establishment of a common, integrated
security community in Asia. The action plan lays down the basis for a roadmap for reachingconcrete agreements and development cooperation in the following areas: confidencebuilding, conflict resolution, arms control and non-proliferation, terrorism and transnational organized crime, food security, energy security, environmental security, disastermanagement, and the stability of the regional financial system.
Can Japan become a partner to Russia in any of these areas? It is true that ASEAN
has reason to doubt the seriousness of the Russian approach, as Russia’s leader has yet toparticipate in an East Asia Summit meeting. Also, given the increased conflict between
Russia and the West, these suggestions met a lukewarm response from regional countries,
not least because they contradict the U.S. “hub and spokes” doctrine, anchoring its “Asiapivot” in a rigid alliance system with its allies. Speaking in terms of geopolitics, there
might be a fundamental division between “continental versus maritime” powers. China
and Russia’s approach of a more democratic international relations system in this area is at
growing odds with the rigid structural approach that is the cornerstone of U.S. policy inAsia. So where could Japan stand? Both sides are, in their own way, “outsiders” in Southeast
Asia: Russia because of its inadequate involvement and different ethnic identity, Japanbecause of its past. Thus, the two countries could do more to have a meaningful discussion
on the above-mentioned issues.

Regional Irritants and Russia-Japan Cooperation
A pivot to broader Asia, where the Soviet/Russian position was never strong, should bebased on a positive reaction to Russian advances in neighboring Northeast Asia. However,this area, closest to Russian borders and home to the three most important economies
of Asia, is beset by numerous territorial and other conflicts. As a result, the region “hasaccumulated considerable potential for conflict. Political rivalry and struggles over spheresof influence are on the rise. There is obvious tension in the finance sector. Armed forces
are being built up. The region is home to six of the ten largest armed forces in the world(China, the United States, North Korea, Russia, Japan, and South Korea) and three of

ASEAN plus three (China, Japan and South Korea), six (Australia, India, New Zealand, China, Japan, andSouth Korea), or eight (the United States, Russia, Australia, India, New Zealand, China, Japan, and South Korea),depending on the entity selected.
7

IMPLICATIONS OF RUSSIA-JAPAN RELATIONS FOR THE REGION

75

those countries (the United States, Russia, and China) already possess nuclear weapons
while North Korea is developing nuclear weapons.”8 So far, the role of Russia-Japan
cooperation in addressing Northeast Asian issues has been inadequate. Numerous meetingsand dialogue show that the sides are speaking different languages, not only literally but also
figuratively (with the territorial issue predictably precluding any sincere discussions). Can
the situation be changed?
Japan is currently overcoming its sense of historic guilt as a “national idea” (becauseof its role in World War II), is frightened by China’s rise, and wants to play a more
independent role in the region. And its corresponding defense build-up potentially signals
the beginning of a major shift in Asia and Pacific security (even a possible change fromthe U.S.-led “hub and spokes” to a multipolar system). Russia watches Japan’s efforts with
anxiety, even if it understands that it is China to whom these undertakings are addressed.
However, these efforts also create possibilities for a new type of cooperation on pressing
issues.

Possibility 1: Historical Disputes
Russia is trying to distance itself from the heated regional debates on the explosive issuesof history, although its principled stand on the “inadmissibility of history falsification” (verytopical in European discourse on World War II) should logically bring it to support China
and other East Asian countries in the discourse on Japan’s role in the war. That might
have brought Russia easy popularity among many Asian people, who had suffered fromJapanese occupation. However, even in the wake of Putin’s participation in the Beijing
military parade on September 3, largely perceived as “anti-Japanese” in Tokyo, there were no
inflammatory remarks, as was noted by Russian commentators. Russia also abstains from
exploiting this theme in bilateral contacts, although both Koreas would be happy to gain
Russia’s support on these topics.
Among regional conflicts, Russia is most directly involved in the Korean issue, as itbears historic responsibility for the Korean War and the division of the peninsula. Russia
remains an important stakeholder in Korean unification and security issues—generally
considered to hold fourth place after the United States, China, and Japan (some Russian
experts argue that Russia holds third place, ahead of Japan, as Japan, in fact, abstains fromusing its ability to influence the situation on the Korean Peninsula). Russia is interested insolving the Korean problem in a peaceful manner, as a decrease in tensions at its doorstep
and economic cooperation would benefit the security and development of the Russian Far

Ivashntsov, G. A., and Beom Shik Shin. Security and Cooperation in Northeast Asia: The Russian-South Korean Experts
Joint Paper. Edited by I. S. Ivanov. Working paper no. 25/2015. 2015, russiancouncil.ru/en/inner/?id_4=6536#topcontent, accessed March 20, 2016.
8

76JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

East. However, the impossibility of the two competing regimes on the peninsula coming
to terms is obvious, as both seem to see the annihilation of the opponent as a final solution.
The way out should be evolutionary, through both bilateral and multilateral efforts, inorder to create a viable security and cooperation system on the peninsula, through themultilateral political process—the Six-Party Talks—with an agenda, broadened from theNorth Korean nuclear issue to a regional security regime. Chairing the working groupon a peace and security mechanism in Northeast Asia gave Russia a good opportunity to
discuss the relevant initiatives, including South Korea’s more recent Northeast Asia Peace
and Cooperation Initiative. For successful Russian-Japanese cooperation, understanding
regarding security is essential. So far, however, discussions on these issues have been limited.

Possibility 2: Territorial Issues and Maritime Security
Territorial conflicts in East Asia put Russia in a precarious position, as some of theseconflicts involve the countries with which Russia would not like to spoil relations bysupporting one side over the other. Having solved the border issue with China, Russia now
is directly concerned with only its territorial argument with Japan, which is more or lessfrozen with no progress in sight; so, no active measures from Russia are needed. Therefore,
open support of China or South Korea against Japan would only spoil bilateral relations
with Japan, without dividends.
Moscow also tries to avoid any clear-cut position on the South China Sea conflict,which does not directly affect its interests (“freedom of navigation” is seen just as a U.S.
pretext to pressure China). Supporting China would also alienate Moscow from many
ASEAN countries. The conflict between two of Russia’s “strategic partners”—China
and Vietnam—is especially distressing, as it undermines Russia’s influence in Vietnam
and affects its economic interests (Russia’s oil rigs cannot operate in disputed waters, forexample). As commentators put it, Russia’s policy towards the South China Sea “is nonexistent,” as the Foreign Ministry usually limits itself to a standard set of neutral statements,
calling for peaceful resolution of disputes and self-restraint; abiding by international law,
including the 1982 United Nations Convention on the Law of the Sea (UNCLOS);
following the Declaration on Conduct of Parties (DOC); and reaching an early conclusionof a binding Code of Conduct (COC).There is little room for effective Russian-Japanesecooperation here.

Possibility 3: WMD Proliferation (and Missile Defense Systems)
The official Russian position is that a nuclear North Korea is unacceptable; however, Russia
well understands the reasons for North Korea to create its “nuclear deterrent” and, in fact,
sees little prospects for North Korean “denuclearization” unless regional security conditions

IMPLICATIONS OF RUSSIA-JAPAN RELATIONS FOR THE REGION

77

fundamentally change (which is unlikely). In fact, in the absence of a diplomatic process (forwhich the United States and South Korea are mostly responsible) the situation is bound tokeep deteriorating.
Russian experts also believe that, in practical terms, the “North Korean nuclear
problem” allows the United States to keep a strong political and military grip on South
Korea, serving U.S. global interests (an example is the inclusion of South Korea in the
deployment of the U.S. anti-ballistic missile system, the Terminal High Altitude Area
Defense, or THAAD, aimed against China and Russia).9 At the same time, the Korean
problem serves as a thorn in the side of China, which is also a benefit for Washington incontaining Beijing’s rising ambitions. Even North Korea’s preservation of some missileand nuclear potential could, under such logic, be acceptable to U.S. strategists, unless
North Korea crosses a “red line”; a game-changer might be acquiring a nuclear-armed,
intercontinental ballistic missile able to reach U.S. territory, which might force the UnitedStates to undertake some active measures.
Russia sees the Six-Party Talks as the most relevant method to hedge the risks—toprevent North Korea from developing its missile and nuclear programs further and to
decrease tensions on the Korean Peninsula (ten years of negotiations are better than one dayof war). However, the possibilities of soliciting Japanese support for this purpose have notbeen explored at all. This may be explained by Russia’s frustration that Japan has no positive
agenda for the Six-Party Talks and follows the U.S. lead, while using the forum for solving
short-term bilateral issues. More Russian-Japanese discussion, especially on the concept of
the final outcome of the talks, is needed.

Possibility 4: New Non-traditional Challenges and “Soft Issues”
Russia agrees with the need for broader regional cooperation on such issues as disastermanagement, terrorism, organized crime and drug trafficking, health, cybersecurity,
food and energy security, and migration. “Soft” cooperation issues could be discussed
independently of “hard” security issues, and may help to create an atmosphere conducive
to solving more delicate problems. Therefore, ideas like the Northeast Asia Peace andCooperation Initiative are worth exploring, although, to be successful, such initiatives
should be inclusive. However, certain suggested areas (non-proliferation of weapons of mass
destruction and nuclear safety, among them), in fact, have no “regional angle,” and creatinga regional mechanism for their discussion seems questionable. At the same time, such issues
as regional transportation and logistics are highly promising and deserve regional efforts.
Russia is especially interested in multilateral projects: an energy grid connection reaching

9

Ibid.

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

the Russian Far East, both Koreas, and China; an inter-Korean railroad infrastructure withconnections to the Trans-Siberian Railway; and regional oil and gas pipelines, especially on
the Korean Peninsula. However, Japan has so far taken only limited interest in these issues,and Russia has not made active efforts to involve it in the conversations on them.

Conclusion
To reach its policy objectives in Asia, Russia should diversify its partnerships, as its policy
in Northeast Asia is now China-centered (economic and military aspects, leading to close
political interdependence with Chinese dominance). This dependence, which increasedin the wake of the crisis in relations with the West, in fact, did not bring the expectedeconomic benefits and is causing growing concern, not only among the political elite
but also in public opinion and the mass media. It is in Russia’s national interest to add
alternative economic and political partners. Japan is the obvious choice. Closer cooperation
on regional issues between the two countries would raise the profiles of both.
Russia should simultaneously pursue development and security agendas in Northeast
Asia. Along with bilateral cooperation, Russia should closely watch the regional economic
integration processes (Asia-Pacific Economic Cooperation; free trade agreements, including
the one among China, Japan, and South Korea; and even the Trans-Pacific Partnership,should the possibility arise). However, its resources are scarce, and a top-level politicaldecision on redistributing those resources in support of Asian policy should be taken. Japan
should be a priority.
It is unclear how the United States and China, as major geopolitical adversaries, would
react to such Russian activity in the region. The United States sees Russia as a threat inEurope,10 and it would be suspicious of Russia becoming more active in Asia, including
developing cordial cooperation with Japan. China, seeing Asia as its exclusive zone ofinfluence, also would not be particularly happy to see a growing, independent Russian rolein Asian affairs.
Moscow needs to act creatively, reconsidering its relations with Japan in the security
area in light of the new reality of Japan vying for a greater regional and global role. Japan
should recognize Russian interests to gain more trust from Russia and engage in mutually
beneficial projects. The regional security and multilateral economic cooperation agenda in
Russia-Japan bilateral dealings are inadequate and should be given priority. Issues such as
the Kuril Islands territorial question and Ukraine should not prevent progress in these areas.

Joint Chiefs of Staff. “The National Military Strategy of the United States of America 2015.” June 2015. http://
www.jcs.mil/portals/36/documents/publications/2015_national_military_strategy.pdf.
10Chapter 8

Russian Views on Security
and Foreign Policy in the
Asia-Pacific and Prospects for
Cooperation with Japan
Vasily Kashin

The Asia-Pacific is, and in the foreseeable future will remain, the safest and least
problematic part of the world as far as Russian security interests are concerned. The Russian
Military Doctrine of 2014 clearly identifies NATO expansion and NATO activities close to
the Russian borders as the main sources of external threat, alongside growing religious andpolitical extremism and ethnic conflicts in the regions close to Russia. The Asia-Pacific isnever mentioned directly.
In the post-Soviet countries, Russia perceives that it is engaged in a decades-long,zero-sum game against the European Union and the United States. The relations with anumber of European countries are poisoned by painful historical memories and ideologicaldifferences. The Ukrainian crisis already has led to some long-term changes in Russian
defense policies, including the establishment of a new military infrastructure on Russia’s
western borders.1
In Central Asia, Russia is preparing for a possible, large-scale, regional security crisis,
which may be caused by the situation in Afghanistan or by the internal dynamics of the
post-Soviet Central Asian states. The Russian ministry of defense sees potential for military
conflict in the region in the near future; the region is experiencing significant influence fromradical Islamic groups, including ISIS.2
In the Middle East, Russia is now positioned at the very center of a complex systemof conflicts involving every major regional power and is engaged in a limited war in Syria.
The downing of a Russian Air Force Su-24 bomber by the Turkish air force in November

Lavrov, A. “New Russian Military Infrastructure on the Border with Ukraine,” Moscow Defense Brief, no. 6, 2015.
Rossiia Segodnia. “Shoigu: Terroristy SAR I Iraka Predstavliaiut Ugrozu Dlia Tsentral’noi Azii” [ISIL Terrorists
and Iraq Pose a Threat to Central Asia]. December 11, 2015. http://ria.ru/world/20151211/1340159079.html.
1
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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

2015 caused a major crisis in relations between Moscow and Ankara. The Russian militaryleadership refuses to name any time limits for the Russian military involvement in Syria,
which, it is widely understood, may last for years.
Compared to these situations, the Asia-Pacific can be seen as a region relatively freefrom short- and medium-term security threats affecting Russia. In the 1990s and early
2000s, Russia managed to settle its old territorial disputes with China. The only territorial
dispute Russia has in Asia is with Japan, and that dispute is frozen and will likely remainin this state for decades. There are no significant terrorist threats in the region directedagainst Russia. Russia is not participating and has no significant interests in the most serious
regional disputes, such as the South China Sea dispute between Japan and China.
In spite of Russia’s territorial dispute with Japan over the South Kuril Islands, Russian
diplomats and academics have long maintained that “Russia does not pose a threat to Japanand Japan is not a source of any threats for Russia.”3 Such statements are routinely repeatedin Russian writings about Russian-Japanese relations and in Russian policy on the AsiaPacific. Besides, the Russian side recognizes that Russia and Japan have close positions on amajority of international issues.4 Russian politicians clearly consider Japan to be both unable
and unwilling to attempt to resolve the current dispute with Russia, by force.
The Russian military apparently considers a possible conflict with Japan a lowprobability scenario. In Russia’s Military Doctrine 2014, “territorial claims against theRussian Federation and its allies and intervention into their internal affairs”5 are named
among the threats. The Russian military maintains only a limited military force to protect
the disputed South Kuril Islands. The islands are garrisoned by the 18th Artillery andMachine Gun Division,6 which, in spite of this imposing historical name, is a rather small,
specialized force with some 3,500 service members.7 The process of rearmament of the
18th division was extensively advertised by the Russian media and politicians; however,similar modernization since 2008 has been happening across the Russian army, following
sharp defense budget increases. There are no reasons to believe that the 18th division, in
reality, has been prioritized over the other parts of the Russian military.
Diplomatic Bulletin. “Stat’ia Posla Rossii v Iaponii A. N. Panova v Gazete Asakhi” [Russian Ambassador
A.N. Panov’s comments to Asahi Shimbun]. December 2003. http://archive.mid.ru//bdomp/dip_vest.
nsf/99b2ddc4f717c733c32567370042ee43/2400768222f907d7c3256e36004cc81e!OpenDocument.
4
Russian International Affairs Council.“Sovremennye Rossiisko-Iaponskie Otnosheniia i Perspektivy ikh Razvitiia
No. 6” [Modern Russian-Japanese Relations and Their Development Prospects No. 6]. 2012. http://russiancouncil.
ru/common/upload/RIAC_russia_japan.pdf.
5Kremlin.“Voennaia Doktrina Rossiiskoi Federatsii” [The Military Doctrine of the Russian Federation]. Accessed
March 20, 2016. http://static.kremlin.ru/media/events/files/41d527556bec8deb3530.pdf.
6
In the Soviet and Russian military, such an archaic name refers to specialized units responsible for static defense of
strategically-important areas with heavy reliance on long-term fortifications. The 18th division is the only one of thiskind remaining.
7
Khrustalev, Maxim. “Rossiia Usilit Voennoe Prisutstvie na Kuril’skikh Ostrovakh” [Russia Intends to Strengthen
Its Military Presence in the Kuril Islands]. KM.RU. February 15, 2011. http://www.km.ru/news/rossiya-usilitvoennoe-prisutstvie-na-kurilakh.
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The Role of Third Countries: North Korea and China
Russian-Japanese security relations are mostly defined by the relations among Moscow,
Tokyo, and the third countries that pose, or may potentially pose, security challenges
for Russia and/or Japan. There are two such countries in Northeast Asia: China andNorth Korea. Both Russia and Japan, participants in the long-stalled Six-Party Talks, areactively involved in the resolution of the nuclear issue on the Korean Peninsula, which isa significant component in their agenda of political relations. Shortly after North Korea’s
fourth nuclear test in January 2016, President Vladimir Putin and Prime Minister Shinzo
Abe had a phone conversation, discussing the reaction of the international community to
North Korean behavior.
Both countries play only a limited role in the North Korean nuclear issue, since
they have very modest capabilities to act independently on this issue with any significant
effect. The Russian trade volume with North Korea barely exceeds $100 million per year,8
which means that, compared to China, Russia has little prospect of pressuring Pyongyang
economically. North Korean attempts to use Russia as a counterbalance to Chinese
influence failed, which resulted in North Korean Supreme Leader Kim Jong-un’s decision
to skip participation in Victory Day celebrations in Moscow in May 2015. The Russian
approach to the North Korean issue remains to coordinate closely with the Chinese
position, which limits the possibility of cooperation between Russia and Japan on Korea.
The factor of a rising China, however, plays a key role in both Russian and Japanesepolitics and creates a clear need for a secure and trusted channel of communication on theregional security issue. To develop this channel, it is necessary to understand that, while
China is seriously affecting security and foreign policy planning in both Russia and Japan,
their perceptions of the China-related security challenges are different.

China and the Security of JapanThe Japanese territorial dispute with China over the Senkaku/Diaoyu Islands flared in the
2000s, and the situation is becoming increasingly tense, with some dangerous incidents,
such as a Chinese frigate locking its fire control radar on a Japanese naval Self-Defense
Forces ship on January 30, 2013.9 The Senkaku/Diaoyu Islands dispute is just part ofa wider conflict between China and Japan, in which the future of the whole system
of international relations in the Asia-Pacific is at stake. China’s 2015 white paper on
military strategy stated that, “Japan is sparing no effort to dodge the post-war mechanism,

Eksportery Rossii. “Torgovyi Oborot Mezhdu Rossiei I KNDR (Severnoi Koreei) v Pervom Kvartale 2015g”[Russian trade with DPRK in Q1 2015]. June 30, 2015. http://www.rusexporter.ru/research/country/detail/2561/.
9BBC News. “Japan Protest over China Ship’s Radar Action.” February 5, 2013. http://www.bbc.com/news/worldasia-21337444.
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overhauling its military and security policies. Such development has caused grave concerns
among other countries in the region.”10 The new Japan-U.S. defense guidelines publishedthe same year were criticized by the official Chinese media as “resurrecting the ghosts ofJapan’s militaristic past.”11
Japanese military modernization is increasingly addressing the Chinese threat withadditional investments in missile defense and underwater and anti-submarine warfare
capabilities, cuts in ground troops, and relocation of military assets from the northern tosouthern areas of Japan.
Japan considers China to be a primary source of military threats, while remaining
deeply involved in economic cooperation. Japan is worried about the clear rise of Chinese
nationalism and increased use of anti-Japanese rhetoric in Chinese domestic politics.
Although there is growing economic and cultural/ideological competition between China
and Japan, traditional, hard security threats emanating from China play a central rolein Japanese security planning. The Defense White Paper, approved by the Abe Cabinet
in March 2015, is focused on China-related threats. It notes, “China, particularly overmaritime issues, continues to act in an assertive manner, including coercive attempts atchanging the status quo, and is poised to fulfill its unilateral demands without compromise.”
The Japanese assess that China “has been continuing activities seen as high-handed to alter
the status quo by force and has attempted to materialize its unilateral claim without making
compromises,” and these Chinese actions could “trigger contingencies.”12

Russian Views on China-Related Security Challenges
Russia does not see China as a military threat, now or in the foreseeable future. The twocountries have resolved their territorial disputes and hold very close positions on mostinternational issues. Since 1997, a set of large-scale, military force reductions and trustbuilding measures have been implemented along the Russian-Chinese border.13 Their
militaries have developed good cooperation and are well aware of each other’s capabilities
and priorities. Even in the event of a Chinese regime change and the rise of anti-Russian
nationalist politicians, with Russia being one of two nuclear superpowers, it is hard to
China Daily. “China’s Military Strategy.” White Paper. May 26, 2015. http://www.chinadaily.com.cn/
china/2015-05/26/content_20820628.htm.
11
Xinhua. “China Voice: U.S. Reanimates the Ghosts of Japan’s Ugly Past.” April 30, 2015. http://news.xinhuanet.
com/english/2015-04/30/c_134200576.htm.
12Gady, Franz-Stefan. “Surprise: Japan Sees China as Its Main National Security Threat.” The Diplomat. July 21,
2015. http://thediplomat.com/2015/07/surprise-japan-sees-china-as-its-main-national-security-threat/.
13
1997 force reduction agreement among Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and China puts limits on
the forces present within a 100 kilometer strip on each side of the border and establishes an inspection mechanism.
Ministry of Defense of Russia. “Soglashenie s Kitaiskoi Narodnoi Respublikoi 1997 G. (Moskovskoe)” [Agreementwith the People’s Republic of China 1997 (Moscow)]. Accessed March 20, 2016. http://stat.doc.mil.ru/documents/
quick_search/more.htm?id=10947127@egNPA.
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imagine that China would take the huge risk of military confrontation with Moscow.
In such a confrontation, China could hardly gain any significant benefits, even underthe best-case scenario. The main Russian oil and gas fields are located in Western Siberia,
thousands of kilometers from the Chinese border; their development, in fact, represents
the main challenge to the Russian “turn to the East” policy, because they require hugeinfrastructure investments. Any attempt by China to undermine Russian sovereignty in theadjacent regions of the Russian Far East, even in case of maximum success, would result intaking an under-populated territory with a harsh climate and few useful resources. That goal
would be achieved only at the cost of tremendous damage to Chinese energy security policy
and at the risk of nuclear war.
The current Chinese government policy is comprehensive economic and politicalengagement with Russia. The Chinese strictly avoid any steps that could arouse Russian
suspicions or anger. China considers strong relations with Russia a necessity for its national
security and long-term economic development. Russia acts as China’s key partner and,in some cases, protector in the international arena, voicing common positions on key
international issues. Although military technical cooperation with Russia has, from the
1990s through the early 2000s, lost its role as the main pillar of bilateral relations, it is still
important for the modernization of China’s People’s Liberation Army (PLA).
Russia is emerging as an important factor in Chinese energy security, helping todecrease Beijing’s dependence on oil imports from an unstable Middle East and vulnerable
sea lines of communication, especially on the Malacca straits. In 2015, Russia, at least
temporarily, overtook Saudi Arabia and became the biggest oil supplier to China.14 In the
future, with additional pipeline projects being implemented, Russia’s role in Chinese energy
security can be expected to grow. The governments of the two countries are aiming for
greater economic interdependence and closer cultural contacts, which will make any future
conflicts less likely.
Russia is also boosting military cooperation with China. Since 2005, Russia andChina have held at least one large-scale, joint ground forces exercise (Peace Mission), peryear. Since 2012, there have also been yearly naval exercises, which are called Maritime
Cooperation. Joint Russian-Chinese exercises are increasingly sophisticated and serve toincrease practical interoperability of the two militaries for possible joint action during a local
conflict.
The transitional nature of the political systems of both China and Russia makes it
hard to forecast their long-term relations. The two lack strategic trust and are undertaking
security measures to hedge against a low probability, high risk scenario of political andRaval, Anjli. “Russia Takes over as Top Oil Supplier to China.” Financial Times. June 23, 2015. http://www.
ft.com/intl/cms/s/0/9eda3756-19bc-11e5-8201-cbdb03d71480.html#axzz3dm4dy0DV.
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military confrontation. Clear evidence of existing Russian planning for a possible crisis
in relations with China are regular, large-scale exercises of the Eastern military district( Joint Strategic Command East) and the continuing deployment of Russia’s most modern
weapons systems to the Russian Far East, including new generation nuclear submarines,
tactical nuclear weapons delivery systems (such as SS-26 Stone), and 4++ generation
fighters. The growing number and technological sophistication of the Chinese intermediate
range missiles is a possible reason for the continuing Russian investment in sea-based
nuclear deterrent forces, instead of diverting the resources towards an intercontinental
ballistic missile force that is more effective for deterring the United States. For Russia, as
well as for the current Chinese leadership, a possible military encounter between the two isa low probability scenario, as remote as a possible military encounter between Russia andJapan. At the same time, such a possibility cannot be ignored and the necessary precautions
are being taken.

The Soft Security Issues for the Russian Far East
The supposed main, non-military threat to the Russian Far East, Chinese demographic
expansion, which was widely discussed in the 1990s and early 2000s, turned out to bea myth. To this day, there is no evidence that the Chinese government ever considered
any policy of demographic expansion to Siberia and the Russian Far East; when illegal
migration existed at any noticeable level at all, the Chinese government readily cooperated
with Russia to deal with it. In addition, expansion towards Siberia and the Russian Far East
makes no sense based on China’s economic and security interests.
Due to the harsh climate and difficult landscape, only a limited area of the Russian Far
East close to the Chinese border is favorable for settlement and agriculture, at least at thecurrent level of technology and under the current climatic conditions. Even the Chinese
regions closest to the eastern part of the two countries’ border, Heilongjiang province andthe Inner Mongolia Autonomous Region, are under populated by Chinese standards,
although their natural conditions and climate are better than the conditions of the Russian
territories to the north. The Chinese do not appear to consider Russia a likely destinationfor emigration.
The maximum number of Chinese in Russia, including illegal immigrants, likely
never exceeded five hundred thousand.15 In 2008, the last time such a poll was published,some 20 percent of Chinese said that they were interested in Russian citizenship;
however, the number of Chinese migrants interested in citizenship was highest in

Larin, A.G. “Skol’ko v Rossii Kitaiskikh Migrantov?” [How Many Chinese Migrants Does Russia Have?].
Demoscope. September 29, 2008. http://www.demoscope.ru/weekly/2008/0347/tema01.php.
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Moscow and relatively low in the much poorer Russian Far East.16
Since the Chinese workforce (fifteen to fifty-nine years old) started to shrink in theearly 2010s,17 and local labor shortages started to affect wages, Chinese interest in migrating
to Russia also appears to have weakened. Economic development of the Russian Far East
currently relies heavily on Central Asian migrants, who have largely replaced Chinese
workers in the local labor market.18 After the sharp devaluation of the Russian ruble against
the main global currencies (including the renminbi), the average Chinese wage (56,339
renminbi per year in 2014), in nominal dollar terms, appears to be higher than the Russian
wage (359,520 rubles per year), which eliminates the economic rationale for significant
emigration.

What Are the Genuine Russian Concerns about China?
While Russia and China are widening their economic and defense cooperation andincreasingly working together on global issues—such as reform of international financial
institutions, the Iran nuclear problem, and Syria—Russian policy in the Asia-Pacificremains pointedly detached from Chinese interests. Russia is intentionally keeping a low
profile on the most divisive regional issues, such as the South China Sea disputes. Even
more, Russia remains the key provider of modern weapons systems to one of the China’s
opponents in the South China Sea, Vietnam, and to a potential major rival, India. The saleof six Project 636 conventional submarines to Vietnam has been implemented in spite ofclearly voiced Chinese dissatisfaction. Vietnam was also provided with coastal supersonicanti-ship missiles, S-300PMU2 long-range surface-to-air systems, missile boats, and Su30MK2 heavy fighters. In 2012, the Russian energy company Gazprom took part in an
oil-drilling project in a disputed area of the South China Sea under Vietnamese control, inspite of Chinese objections.
India continues to be a privileged customer of Russian military technology andenjoys access to technologies that are still denied to China. These include Su-30MKI 4++
generation heavy fighter license production, the BrahMos supersonic cruise missile coproduction project, and Russian help in development of the Indian nuclear submarine fleet(including lease of a Project 971 nuclear attack submarine). Such policies were only possible
because Russia managed to maintain freedom of action in East Asia, while strengthening
strategic cooperation with China.

———. “Zhizn’ v Rossii Glazami Kitaiskikh Migrantov” [Life in Russia through the Eyes of Chinese Migrants].
Demoscope. September 29, 2008. http://www.demoscope.ru/weekly/2008/0347/tema01.php.
17
Chang, Gordon G. “Shrinking China: A Demographic Crisis.” World Affairs Journal. May/June 2015. http://www.
worldaffairsjournal.org/article/shrinking-china-demographic-crisis.
18“Russia: Central Asian Migrants Find Better Opportunities for Employment in the Far East.” EurasiaNet.
Accessed March 20, 2016. www.russian.eurasianet.org/node/60235.
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At this stage, the main challenge for Russia is to maintain an independent foreign
policy and diverse economic relations in the Asia-Pacific, while deepening its strategic
partnership with China. The main task for Russia is balanced integration into the regional
economy, without becoming too attached to Beijing. Achieving this goal will not be easy.
The Russian government statements about the “turn to the East” after the start of the
Ukrainian crisis were widely criticized as unrealistic. The critics were partly correct—the
government did not manage to use China to compensate fully for the losses in cooperation
with the West. However, the hard fact is that the role of China in the Russian economy has
seen very significant growth since the late 1990s, when the real, much slower rebalancing of
Russian economic ties started.

A Need to Rebalance Russian Economic Ties in the Asia-PacificRussian economic reliance on China has been growing steadily since the late 1990s. In
2000, the volume of Chinese-Russian trade was around $8 billion, and China’s share in
Russian foreign trade was 4.51 percent.19 China was the fourth largest trade partner ofRussia, after Germany, Italy, and the United States. Now China is the number one trade
partner of Russia among individual countries and the second after the European Union.
In 2014, according to Russian customs data, China (Hong Kong included) accounted for11.5 percent of the Russian external trade in goods, with a trade volume of $89.8 billion.
Of course, the European Union, combined, still accounted for some 48 percent, but the
dynamics are rather clear—the relative importance of Europe for the Russian economy isslowly decreasing.
The sharp fall in Russian foreign trade in 2015, caused by falling commodity prices,
has affected trade with both China and the European Union, but the negative effects on
trade with China were smaller. From January to August 2015, the European Union share in
Russian foreign trade fell to 45.7 percent (from 49 percent in the period January to August2014), and the Chinese share grew to 11.7 percent (from 11 percent in the period January toAugust 2014). The gradual economic turn towards China was not stopped by the economiccrisis and sanctions, and it may gain new momentum once oil prices stabilize or rebound.
This is a long-term process, which will affect politics, the economy, demography, culture,and education in Russia. The process, itself, is unavoidable; the task is to keep it manageable.
Instead of turning just towards China, Russia should be turning towards the Asia-Pacific.
That shift will require careful balancing of the entire system of Russian economic andpolitical ties with the region’s countries.
The success of this policy is important for Russia and the region, in general. If
Portyakov, V.Y. “Russo-Chinese Trade: Political and Economic Discourse.” China in Global and Regional Politics 16(2011).

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Russia manages to balance the current growth of economic relations with China withcorresponding growth in relations with Japan, South Korea, and the Association ofSoutheast Asian Nations, we expect that it would stabilize the Russian political role in theregion for the foreseeable future. Relations with China will always remain special for Russia,
but it could avoid close alignment with China on most regional issues, while maintaining
general support for the rise of China as a major global power. In other words, Russia’s failure
to diversify economic relations in Asia would lead to closer political alignment with China
and affect its ability to develop relations, simultaneously, with the other countries in theregion. Such a situation would bring a host of political and economic risks, both for Russia
and for the entire region of the Asia-Pacific. The Russian leadership is well aware of suchrisks, and the development of relations with the developed Asian economies is one of thepriorities of Russian foreign policy in the region.
Until 2015, Russian trade with the Asia-Pacific countries, other than China, wasexpanding, and during the difficult months of 2015 most of them kept their shares of
Russian foreign trade or even moderately increased them. However, China now accounts
for about 50 percent of Russian trade with East Asia, and that share can be expected to
grow. Trade with Japan, the second most important Russian partner in Asia, accounts for
only about 30 percent of Russia’s trade with China. Economic reliance on China can be
expected to increase when the new infrastructure projects, such as expansion of the MoheSkovorodino oil pipeline and the “Power of Siberia” gas pipeline, become operational.

Conclusion
Both Russia and Japan have concerns caused by their relative declines compared to China;
however, their concerns are of a different nature. For Japan, China is a primary security
threat, a new and growing great power seeking to rewrite the rules for the Asia-Pacific at
the expense of Japan and using anti-Japanese nationalism as one of the pillars of its official
ideology. Russia is more concerned with the possibility of economic overreliance on China,
which would restrict freedom of maneuver in Russian foreign policy in the Asia-Pacific.
Russian security planners do recognize that China, one day, may become a military threat,but see it as a high risk, low probability threat.
Russia and Japan have been slowly developing military-to-military relations since thefirst half of the 1990s. The first contacts between the two militaries were established in
1993, when the first deputy chief of the Russian General Staff, General Andrei Nikolaev,
made an unofficial visit to Japan. In September 1994, the first Russian-Japanese disaster
relief naval exercises were held near Vladivostok. In 1996, the chief of the Japanese National
Defense Department, Hideo Usui, visited Russia, after which contacts between the twocountries’ defense ministers and chiefs of staff became regular.
The next major development was the first consultations between the ministers of

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foreign affairs and defense (”two plus two” talks), held in November 2013. The negotiations
focused on coordination on issues of piracy and terrorism. The Russian officials in their
public comments underlined that China was not discussed during the negotiations.
According to Asahi Shimbun, the Japanese side tried to raise the China issue during thenegotiations but received no response.20
Russia is obviously interested in creating new, effective channels of communication
with Japan to discuss regional politics and security issues. But Russia will carefully avoid
any specific discussions of Chinese behavior and the Chinese military buildup, because,at this stage, Russia does not see this buildup as a threat and does not want needlessly todamage its relations with China. This means that the future agendas of such contacts will
be centered on such issues as the Kuril Islands, North Korea, terrorism, piracy, disaster
relief, and dangerous incidents prevention, with little mention of the Chinese elephant in
the room. However, well-developed channels of communication would allow for quickly
establishing such dialogue and cooperation, if the need arises.
The Ukrainian crisis did much less damage to Russia’s relations with Japan than
its relations with any other G7 country. Both countries remain committed to reviving
bilateral relations as soon as possible. Their common interest is supporting diversificationof Russia’s political and economic relations in the Asia-Pacific, which would help Moscow
to maintain its current, balanced approach to regional politics and contribute to regional
security. Closer economic cooperation and interdependence may, in the future, turn Russia
into a stabilizing factor in Sino-Japanese relations. After the Ukrainian crisis, Japan, in fact,
became Moscow’s most trusted partner among the G7 countries, and it is likely to keep thisrole, which will affect Russian strategic positioning in the Asia-Pacific and contribute to thesecurity of Russia and Japan.

Suzuki, Takuya, Koji Sonoda, and Akiyoshi Komaki. “Peregovory «2 + 2» Mezhdu Rossiei i Iaponiei:
Raskhozhdenie v Voprosakh o Kitae i Severnykh Territoriiakh, Usilenie Sodeistviia v Sfere Bezopasnosti” [Twoplus two negotiations between Russia and Japan: Differences over China and the Northern Territories]. Inosmi.ru.
November 05, 2013. http://inosmi.ru/world/20131105/214479205.html.
20Chapter 9

Japan-Russia Relations
through the Lens of the
U.S.-Japan AllianceFrank Jannuzi

The United States-Japan alliance is a grand bargain: the cornerstone of Washington’s efforts
to promote peace and security in East Asia. Japan allows the United States to forwardposition tens of thousands of troops and hundreds of aircraft and ships at more than eighty
facilities scattered across the Japanese Islands. Without these facilities, the United States
would have difficulty projecting power and might find it impossible to fulfill its treaty
obligations to other alliance partners in the region, including the Philippines and South
Korea. In return for basing rights and generous host nation support, the United Statesshields Japan beneath its “nuclear umbrella” and safeguards Japan’s sovereignty and territorial
integrity against all external threats. It thereby ensures that Japan, an archipelagic power, hasa strong continental ally, albeit one on the other side of the Pacific Ocean.
This bargain has served both nations well, even as the strategic focus of the alliance
has shifted from deterrence of Soviet aggression to maintenance of peace and security inan “increasingly complex security environment.”1 Ambassador Mike Mansfield famously
called the alliance “the most important bilateral relationship in the world, bar none.”
Drafted at the height of the West’s contest for global supremacy with the Soviet Union,
the 1952 U.S.-Japan Mutual Security Assistance Pact provided valuable security guarantees
for both allies. The Soviet threat energized the partnership and fueled Japan’s rearmament.
Washington’s military support and generous aid allowed Tokyo to concentrate its limited
resources on national reconstruction and economic growth, rather than military spending.
The alliance was also a bulwark against any Soviet designs on Japanese soil and gave Japansufficient geopolitical strength in 1956 to normalize diplomatic and economic relations
with the Soviet Union. For the United States, the alliance provided the wherewithal todefend its foothold on the Korean Peninsula and later to project power into Southeast Asia.
Ministry of Defense of Japan. “The Guidelines for Japan-U.S. Defense Cooperation.” April 27, 2015. http://www.
mod.go.jp/e/d_act/anpo/shishin_20150427e.html.
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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

It also prevented the Soviet Union from leaving its eastern borders undefended in order toconcentrate its conventional and nuclear forces in Europe.
What Japanese Prime Minister Shinzo Abe calls an “alliance of hope” remains vitalto both nations, but it is no longer animated by a common perception of an overarching
Soviet/Russian threat. In fact, the 2015 revised U.S.-Japan Defense Guidelines take pains
to avoid describing any nation as an adversary. The guidelines, instead, scope out an alliancedesigned to address effectively and seamlessly “persistent and emerging threats” without
geographical limit, including situations when an armed attack on Japan is not involved.
If pressed to identify a potential adversary, alliance managers, today, would point toNorth Korea or China, not Russia. This does not mean that Moscow’s conduct escapes
scrutiny, but as was sometimes true during the Cold War, the United States and Japan,
today, have differing perceptions of Russia and the role of the alliance in managing it.
President Obama views Russia as a threat to the international order and expects Japanto join the United States and other nations in punishing Russia for its transgressions.
Abe views Russia as an opportunity, while he hopes the U.S.-Japan alliance will facilitate
détente, even as it reinforces the international norm against settling territorial disputes byforce. Washington’s priorities for Russia include rolling back its annexation of Crimea andnegotiating an end to Syria’s civil war. Tokyo’s priority is deterring China from challenging
Japan’s sovereignty over the Senkaku (Diaoyu) Islands, and it views a potential peace treaty
with Russia as an important step toward shoring up its strategic position vis-à-vis China.
It is not the first time that Washington and Tokyo have differed over how best to
manage relations with Moscow. As is true in any long-term relationship, a certain amountof give and take and compromise is required to accommodate the evolving and sometimes
competing priorities of the partners. This flexibility will be particularly important if Tokyo
comes to believe that its strategic interests are best served by rapprochement with Moscow,
at a time when the United States and other members of the G7 are intent on punishing andisolating Russian President Vladimir Putin.

Post-Cold War Russia and a Reoriented U.S.-Japan Alliance
Given its Cold War origins, the U.S.-Japan alliance was bound to experience an identity
crisis with the collapse of the Soviet Union. The principal strategic rationale for the alliancevaporized almost overnight, and it was not immediately clear whether the allies could
identify a compelling purpose or embrace a coherent mission in the era of globalization. The
1997 defense guidelines authorized in vague terms a role for Japanese forces in situations
and territories far removed from the direct defense of Japanese territory—an important stepin the evolution of the alliance, from one based on a single, common threat to one based
more on a set of common security interests and values. The alliance was entering a decidedly
post-Soviet era, emphasizing missions and capabilities having little to do with Russia andJAPAN-RUSSIA RELATIONS THROUGH THE LENS OF THE U.S.-JAPAN ALLIANCE

91

its regional ambitions, limited as they were by the implosion of the Soviet Union and thecollapse of Russian military readiness. The terror attacks of 9/11 reinforced these trend lines,
further shifting the focus of the alliance away from its traditional adversary and reorienting
it toward unconventional threats, albeit in a non-combat role.
Nearly twenty years later, the allies have just issued the latest version of their defense
guidelines, responding to the emergence of new conventional threats: North Korean nuclear
weapons and missiles—and unconventional ones—radical Islamic terrorism, humanitariandisasters, piracy, and cyber security, among others. The U.S.-Japan alliance has truly “goneglobal.” With the reinterpretation of its constitution to permit Japan to exercise collective
self-defense, Japan can now take action to defend U.S. or other allied forces anywhere in
the world, even if Japan is not under direct attack. It can, at least in theory, use a Japanese
Aegis cruiser to shoot down a missile flying over Japan toward U.S. territory. And by
introducing greater symmetry into the relationship, the new guidelines take Tokyo closer tothe status of equal partner with Washington, rather than “little brother.” Yet, for all of theattention focused on emerging global threats, the Obama-Abe revisions also underscore thepersistence of great power rivalries as a rationale for the alliance.
The rise of China prompted U.S. Secretary of State Hillary Clinton’s call for a “pivot
to Asia,” and it also presages the return of the U.S.-Japan alliance to its traditional security
mission; that is, deterring a potential regional hegemonic power or peer competitor andmaintaining freedom of navigation and open sea lines of communication. Both Japan andthe United States are worried by China’s irredentist tendencies and more assertive military
posture in the Western Pacific. Many provisions of the new guidelines, especially the highpriority attached to ballistic missile defenses, cyber security, and space, were clearly draftedwith alliance relations with China in mind. Here, at last, is a potential adversary large
enough to replace the Soviet Union in U.S. and Japanese strategic thinking, prompting
a raft of analysts, some serious, some less so, to reiterate and underscore the vital role of
the U.S.-Japan alliance. As former American diplomat Robert Blackwill and Carnegie
Endowment senior associate Ashley Tellis wrote for the Council on Foreign Relations:Because the American effort to ‘integrate’ China into the liberal international order has
now generated new threats to U.S. primacy in Asia—and could result in a consequential
challenge to American power globally—Washington needs a new grand strategy toward
China that centers on balancing the rise of Chinese power rather than continuing to assist
its ascendancy.2

If there is growing consensus on the need for the alliance to devise a new strategy to deal

Blackwill, Robert D., Henry A. Kissinger, and Ashley J. Tellis. “Revising U.S. Grand Strategy toward China.”
Council on Foreign Relations. April 2015. http://www.cfr.org/china/revising-us-grand-strategy-toward-china/
p36371.
2

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

with China, there remain important differences in the allies’ assessments of the challenges
and opportunities posed by Russia. Russia and Japan do not view each other as threats. The
same cannot be said of the United States and Russia. Washington is increasingly worried
about Russia under Putin’s leadership. And when it comes to determining the alliance’s rolein great power, balance of power politics, Washington still expects to be the senior partner.
Deteriorating U.S.-Russia ties have, thus, begun to complicate alliance management,with Washington focused on the Crimea and Syria, while Tokyo fixes its gaze on an older
Russian land grab much closer to home.

Evolving U.S., Japanese, and Russian Perspectives
on the Kuril Islands Dispute
The United States has long held a nuanced position on the Northern Territories—or as
Russia calls them, the Southern Kurils—reflecting the complex and often contradictory
history of the conflict.3 The Kuril Islands were promised to the Soviet Union at Yalta andseized by the Soviet Union following Japan’s surrender in World War II. Under the terms of
the 1951 San Francisco Peace Treaty, Japan renounced “all right, title and claim to the Kurile
Islands,” and the islands were effectively incorporated into the Soviet Union. But somein Japan and the United States argued, at the time, that at least two of the islands close to
Hokkaido—Habomai and Shikotan—are actually part of Hokkaido, rather than part of
the Kuril Islands, and as such are not subject to the 1951 treaty. Moreover, Britain and theUnited States agreed that territorial rights would not be granted to nations that did notsign the Treaty of San Francisco; therefore, the Kuril Islands were never formally recognized
as Soviet territory. In a 1956 declaration, the Soviet Union promised to return the twosouthernmost islands once a final peace treaty was finalized, leaving the status of Etorofu
and Kunashiri to be determined.4 But that deal was never consummated, derailed in part
because the United States urged Japan to take a hard line. In numerous subsequent roundsof negotiations, Japan was unwilling to accept a territorial compromise—insisting on the
return of all four islands—and the United States has generally stood by its ally, albeit withan annoying lack of clarity. In August 2014, for instance, State Department spokeswoman
Marie Harf said, “The United States recognizes Japanese sovereignty over these islands,”5
leaving unclear precisely which islands were in question.
For detailed analyses of the complexities, see Stephan, John J., The Kuril Islands: Russo-Japanese Frontier in the Pacific(Oxford: Clarendon Press, 1974), and also Hara, Kimie. “50 Years from San Francisco: Re-Examining the Peace
Treaty and Japan’s Territorial Problems.” Pacific Affairs 74, no. 3 (Autumn 2001): 361–82.
4
Goodby, James, Vladimir I. Ivanov, and Nobuo Shimotomai, eds., Northern Territories and Beyond: Russian,
Japanese, and American Perspectives, (Washington, DC: U.S. Institute of Peace, 1995).
5Japan Times. “U.S. Recognizes Japan’s Sovereignty over Russian-held Isles: Official.” August 14, 2014. http://www.
japantimes.co.jp/news/2014/08/14/national/u-s-recognizes-japans-sovereignty-over-russian-held-isles-official/#.
VkVrzYSDTz.
3

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93

Komchatka

Sea of Okhotsk

1875

Etorofu
1945
Hokkaido

Kunashiri
Shikotan

1855

North Pacific Ocean

Habomai Islands

The Kuril Islands (Northern Territories), with the current Japanese names of the four disputed islands. The
borders from the Shimoda Treaty (1855), Treaty of St. Petersburg (1875), and current effective administration(as of 1945) are also shown.

The prospects for a deal on the islands appeared bright, not long ago, fueled by good
personal rapport between Putin and Abe. From the moment Abe regained the position ofprime minister, he has consistently expressed his interest in concluding a post-World War
II peace treaty with Russia. Abe and Putin have met a dozen times and have established ahigh-level “two plus two” mechanism in an effort to forge closer ties. In 2012, Putin used
the judo term “hikiwake” to suggest a compromise on the territorial dispute, and in April
2013, Abe became the first Japanese prime minister in a decade to visit Russia, following
which Abe confidant and national security advisor Shotaro Yachi hinted that Japan was
open to a deal that would leave some of the disputed islands under Russian control.6
Abe’s rationale for wanting to settle the dispute is straightforward.7 It is preventing apeace treaty that makes strategic sense, considering both nations’ economic complementarity
and Japan’s concerns over the rise of China. The closure of Japan’s nuclear power plants
after the tragedy of 3/11 cut the nation’s energy production by a third and left it dependenton Middle East oil for electric power. Russian oil and gas could significantly reduce Japan’s
dependence on fossil fuels from unstable suppliers. Japan is also eager to discourage Russia
and China from forging a genuine strategic partnership, and a peace treaty would clear the

Nippon.com, “Behind the New Abe Diplomacy: An Interview with Cabinet Advisor Yachi Sh tar (Part Two),”August 9, 2013, http://www.nippon.com/en/currents/d00090/.
7
For a fulsome exploration of Abe’s motives, see Brown, James. “Japan’s Territorial Dispute with Russia: Prime
Minister Abe’s Plan to Break the Deadlock.” The Asia-Pacific Journal 14, no. 4 (February 15, 2016). http://www.
globalresearch.ca/japans-prime-minister-abes-2016-plan-to-break-the-deadlock-in-the-territorial-dispute-withrussia/5509546.
6

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way for Japan to expand its economic dealings and political leverage with Russia.
For its part, Moscow has long been eager to diversify its energy exports. It does notwant China to monopolize the market for Russian hydrocarbons in East Asia, and it isalso hungry for non-Chinese investment in the Russian Far East. Japan is the closest
and most logical source of capital. The Kremlin would love to drive a wedge between
Tokyo and Washington—delivering a blow to U.S. global influence. Some further argue
that, although Putin has made a great show of cozying up to Beijing, this seems more amarriage of convenience than a strategic convergence. Japanese advocating for a deal with
Russia, including Abe and several of his senior national security advisers, hope a diplomatic
breakthrough could turn into a tectonic shift in Northeast Asia.

U.S. Perspective on Warming Relations
between Japan and Russia
For all of the underlying strategic reasons for Japan and Russia to seek improved ties, thelikelihood of a deal declined sharply after Russia annexed the Crimea. The prospects are
far less promising today than they were during the first couple of years of the Abe-Putin
courtship. On a practical level, more than seventeen thousand Russians live on the Kuril
Islands; an inconvenient truth that constitutes a major barrier to Moscow handing over thelargest of the four islands. And as the last remaining former Japanese residents of the islands
die of old age, Japan’s emotional link to the territories will diminish. More important, as
was true in 1956, any deal to resolve the dispute will require at least the tacit approval of
Washington. And the United States currently views Japan-Russia security ties with great
skepticism; a fact the Obama administration has not been shy about communicating toTokyo. On July 5, 2014, Assistant Secretary of State Danny Russell had the following to say
about warming ties between Japan and Russia:
The Japanese government clearly recognizes that the unity in the international community
will ultimately be one of the factors that convinces Russia that it must adjust its behavior
and stop the challenge to international law and values. I have a high degree of confidence
that the Japanese government also recognizes that unity in this issue also has significant
implications for the Asia-Pacific region. There are abundant analogies that can be drawn
between Russia’s behavior and the threats to sovereignty and territorial integrity, muchcloser to home for Japan. That lesson has not been lost on the Japanese government, andwe’re counting on them.8

In diplospeak, this was an exceptionally blunt warning. When diplomats say they have a

AJW by The Asahi Shimbun. “INTERVIEW/ Daniel Russel: U.S. Hopes China Will Agree to Japan’s Call for
Dialogue on Senkaku Issue - AJW by The Asahi Shimbun.” January 05, 2014. http://ajw.asahi.com/article/views/
opinion/AJ201407050024.
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JAPAN-RUSSIA RELATIONS THROUGH THE LENS OF THE U.S.-JAPAN ALLIANCE

95“high degree of confidence,” it means they are very worried that the opposite might be thecase. And when they use the word “unity” twice in two adjacent sentences, it means they are
worried that divergence exists. And when they specifically reference threats to sovereignty
and territorial integrity, they are invoking the most critical phrases of treaty alliances. Finally,
when diplomats say, “we are counting on you,” they really mean, “we will be very, very
disappointed if you let us down.”
Coming just a few months after Abe’s visit to Sochi for the Winter Olympics, Russell’scomments can only be interpreted as a shot across the bow of any Japanese plan to pursue
a settlement on the Northern Territories issue on terms that are likely to be acceptable to
Putin. Washington demands that Japan hold Russia at arm’s length and cooperate with theUnited States and the European Union in maintaining sanctions. It has implicitly linked
Tokyo’s willingness to punish Moscow for its “threat to sovereignty and territorial integrity”
in Europe to the U.S. willingness to stand up to Chinese threats “much closer to home
for Japan.” This is one of those moments in the history of the alliance when the “grandbargain” is clear. Washington expects Tokyo to prioritize alliance solidarity over the prospect(however slim) of resolving the Northern Territories issue.

G7 Solidarity and Next Attempts at Rapprochement
Perhaps taking the obstacles being thrown up by Washington into account, both Moscow
and Tokyo have hardened their negotiating positions on the Kuril Islands in recent months.
Russian Prime Minister Dmitry Medvedev visited Iturup Island on August 22, 2015, andannounced plans to enhance Russian military and civilian infrastructure in the Kuril Islands
chain.9 Medvedev chose “State Flag Day” for his visit, posing beneath a giant Russian flag,
lest the nationalist purpose of his visit be lost on anybody. Engaged in a high-profile disputewith Washington over Ukraine and angered by Tokyo’s decision to side with the G7 on
sanctions, Moscow is not currently inclined to show flexibility when it comes to an issue ofnational pride.
Japan’s honor is also engaged. Foreign Minister Fumio Kishida rebuked Medvedev for
visiting the islands and postponed a trip to Moscow that had been scheduled for August.
Although Abe, in January 2016, reiterated his support for a summit meeting to mend
relations and agree to a final settlement of the dispute, the prospects of such a summit
materializing in 2016 are doubtful.10 Having once expressed concern that Washington’s
response to the Crimea was too weak—wondering aloud whether the United States could
The island chain guards passage to the Sea of Okhotsk, home to important Pacific bases for Russia’s strategic
submarine force.
10
Efforts to arrange an informal meeting between Abe and Putin in late April or early May continue, according topress reports. Nikkei Asia Review. “Tokyo, Moscow Eye Sochi Stopover by Abe in May.” February 16, 2016. http://
asia.nikkei.com/Politics-Economy/International-Relations/Tokyo-Moscow-eye-Sochi-stopover-by-Abe-in-May.
9

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

be relied upon to honor security commitments to Japan on the Senkaku (Diaoyu) Islands,
if it did not stand in solidarity with Kiev11—Tokyo can hardly soften its own policy line,
now that it has secured from Washington the iron-clad assurances on the Senkaku (Diaoyu)
Islands it had been seeking.
That said, Washington appears to be leaving nothing to chance. Responding to aquestion about a flurry of meetings between Japanese and Russian officials last summer andin early fall, State Department spokesman John Kirby on October 8, 2015, underscored U.S.
opposition to “business as usual” with Russia. His answer left little doubt that Washington
expects Japan, as host of the G7, to do nothing to undermine allied pressure on Moscow.12
Even though Japan’s sanctions on Russia are mostly symbolic, they, nonetheless, signal thatmaintaining close ties with Washington is more important than attempting a breakthroughin Russo-Japanese relations. What is less clear is how long Abe will hold his personaldesire to pursue a peace deal with Putin in suspense, and whether Washington’s stance on
a possible rapprochement may ultimately prove counterproductive, if that stance tends todrive Russia and China together in the Far East.

Conclusion
Washington’s success in persuading Abe to set aside, to date, his ambition to settle theislands dispute is a win for G7 solidarity and a win for U.S./NATO efforts to restrain
Moscow in Eastern Europe. But the arm-twisting required to secure Japanese solidarity
could complicate U.S. efforts to balance the rise of China and cope with other challenges
in East Asia, including North Korea. Washington’s priority on Ukraine appears to belie amajor argument undergirding the “rebalance” strategy—namely, that the preponderance ofU.S. economic and security interests has shifted from Europe and the Middle East to Asia.
China’s September 3, 2015, victory parade—with President Xi Jinping flanked by
Putin on one side and South Korean President Park Geun-hye on the other—provided
visual affirmation of Beijing’s dream that continental Asia will look to Beijing for leadership,rather than to Tokyo and Washington. And in November, Moscow announced a $2 billion
deal to sell twenty-four of its most advanced fighter aircraft, the Su-35, to Beijing—a deal
that might not have been made had Russia not been languishing under the economic
weight of sanctions, or if it still had hopes of cozying up to Japan. Russia has also moved
closer to Pyongyang, balking for a time at U.S. efforts to impose tough, new UN sanctions,following North Korea’s latest nuclear and missile tests.

Cooper, Helene, and Martin Fackler. “U.S. Response to Crimea Worries Japan’s Leaders.” New York Times, April
5, 2014. http://www.nytimes.com/2014/04/06/world/asia/us-response-to-crimea-worries-japanese-leaders.html.
12
U.S. Department of State. “Daily Press Briefing - October 8, 2015.” October 08, 2015. http://www.state.gov/r/pa/
prs/dpb/2015/10/248049.htm.
11

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97

Long term, the United States will have to evaluate whether its opposition to RussoJapanese reconciliation, under conditions of Russo-American hostility elsewhere in theworld, is compatible with the growing need to bolster the alliance’s ability to manage
North Korea’s nuclear ambitions and deter Chinese aggressive moves at sea, in space,and in cyberspace. Given allied anxiety about China’s growing economic, political, andmilitary clout—an anxiety that some in Moscow share,13 finding a way to repair relations
with Russia would appear to make strategic sense for both the United States and Japan.
A peaceful settlement of the Northern Territories issue could set a good precedent for thenegotiated resolution of territorial disputes in the East China Sea and South China Sea.
A peace treaty between Japan and Russia might also allow the alliance to shift military
resources away from the Russian threat and deploy them in pursuit of other global
objectives, including freedom of navigation—a top U.S. priority. This is the logic being
heard from Tokyo, but U.S. officials and many strategic analysts doubt it. Thus, divergencein geopolitical interpretations at the regional and global levels is complicating the diplomacy
between Washington and Tokyo over Abe’s continued pursuit of Putin in 2016.

Lukin, Alexander. “Perceptions of China Threat in Russia and Russian-Chinese Relations.” Proceedings ofChina Threat Perceptions from Different Continents, Hong Kong. 2001. Accessed March 22, 2016. http://www.
brookings.edu/fp/cnaps/papers/russiachina.pdf.
13

PART III

ECONOMIC
RELATIONSChapter 10

Japan-Russia Economic
Relations with Emphasis on
Energy Cooperation
Hirofumi Arai

Many questions are being asked about economic—especially energy—relations between
Japan and Russia. As the leaders of the two countries contemplate an agreement totransform bilateral relations, many believe that that agreement must include a far-reachingdeal on the export of Russian energy—gas, above all—to the Japanese market. Does thismake sense commercially for the Japanese side? Is the Kuril Islands territorial dispute amajor factor that stands in the way, and would its resolution make a big difference? Has
the sharp drop in energy prices since 2014 affected prospects for cooperation? If Russian
negotiators insist on an energy deal as part of an overall package, what should the responseof the Japanese side be in light of current economic realities? This chapter looks first attrade dynamics, then broadly at energy cooperation projects (focusing on eight in total), andthen specifically at natural gas cooperation, before identifying factors leading to stagnationin energy cooperation. The conclusion stresses uncertainty in the next step of bilateral
cooperation, presenting three possible scenarios to come.

Trade Dynamics
After Russia’s financial crisis in 1998, trade turnover between Japan and Russia grew rapidly
until 2008, driven largely by exports of machinery, including automobiles from Japan to
Russia’s expanding consumer market. The 2008 global financial crisis hit the Russian
economy severely, shrinking its import capacity and causing Japanese exports to decline
by as much as 600 percent between 2008 and 2009. That said, Japan’s imports, overall,have advanced relatively steadily since 2000 (see fig. 2), thanks mostly to the expansion ofenergy resource trade. The decline in 2015 was primarily a consequence of the fall of energy
resource prices.
Traditionally, Japan’s major import items from Russia have been natural resources
and raw materials. The composition, however, has changed dramatically in this century.

102JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

Figure 2. Trade volume between Japan and Russia.
3,000
2,500

n Export n Import

Billion Yen

2,000
1,500
1,000
500

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

0

Source: Trade Statistics of Japan.

In 1998, the major import items were nonferrous metals (38.1 percent of total imports),
fish (30.9 percent), wood (15.0 percent), and coal (6.6 percent). In the peak year of 2014,
while total imports had grown seven times since 1998, oil and gas comprised three quartersof the total: crude oil at 43.0 percent, oil products at 6.3 percent, and liquefied natural gas(LNG) at 26.9 percent. Even though imports of the previous major items, except for wood,
had also grown during this period, their growth rates were much less than the growth rate
for imports as a whole. Among the noteworthy developments during this period were thebeginnings of oil production (1999) and gas production (2009) in the Sakhalin-II project,
the commencement of oil production in the Sakhalin-I project (2005), and the start ofoperations of the East Siberia-Pacific Ocean (ESPO) pipeline (2009).

Energy Cooperation Projects between Japan and Russia
Despite the drastic change in the trade structure between Japan and Russia, there have beena few successfully-implemented, joint projects in the energy sector, among them Sakhalin-I
and Sakhalin-II. Another project, which has proven mutually beneficial, is the ESPO oilpipeline, which paved the way to joint projects in Eastern Siberia. The Vladivostok LNG
project, which was the focus of bilateral energy cooperation discussion for years, has lost
momentum. Coal has been a traditional item of cooperation between the countries since
the Soviet era, but negotiations on new coal deposit developments have not brought visible
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103

The following is a quick review of cooperation projects, either in operation or underdiscussion.

Sakhalin-I
Sakhalin-I is one of the offshore oil-gas development projects on the continental shelfof Sakhalin Island. The project has proceeded in accord with a 1995 production-sharing
agreement among the project consortium, the government of the Russian Federation,and the local government of Sakhalin. The project operator is Exxon Neftegas Limited,current shareholders of which are Exxon Mobil (30 percent, USA), Sakhalin Oil & Gas
Development Co. Ltd or SODECO (30 percent, Japan), ONGC Videsh Ltd. (20 percent,India), Sakhalinmorneftegas-Shelf (11.5 percent, Russia) and RN-Astra (8.5 percent,Russia). In fact, the two Russian participants are affiliates of Rosneft, the largest stateowned oil company in Russia; thus, the latter is the key stakeholder in the project, boosted
by its influence on the political process of the Russian Federation.
For Japan’s part, SODECO is a public-private joint venture. Formally, 50 percent of
its share belongs to the state, specifically the Ministry of Economy, Trade, and Industry(METI). Among the five joint stock companies JAPEX, Itochu, Marubeni, INPEX, andItochu Oil Exploration, which together own the remaining 50 percent, JAPEX and INPEX
are state-owned enterprises, whose largest shareholder is METI.
The project shipped its first commercial oil in 2005 and soon became one of Japan’smajor oil sources. Natural gas development has faced challenges, so far. Lacking export
possibilities, Sakhalin-I has not been able to launch full-scale production of natural gas.
Currently, the associated gas goes to the mainland through the Sakhalin-KhabarovskVladivostok pipeline, which was completed in 2011 as part of preparations to accommodate
the 2012 Asia-Pacific Economic Cooperation summit in Vladivostok.
Among the options for gas exports that have been discussed are: an extension of
the pipeline to China, construction of the Far East LNG plant proposed by Rosneft,construction of a new pipeline to Japan, and supply of natural gas to the Sakhalin-II LNG
plant expansion project. Advancing these initiatives, however, requires simultaneously
resolving complex questions involving domestic factors, including overcoming the rivalry
between Rosneft and Gazprom, and external factors, such as satisfying the needs ofpotential consumers and eliciting favorable policies from the importing countries, given
their socio-economic and political constraints.

Sakhalin-II
Sakhalin-II is another continental shelf development project operating with a productionsharing agreement signed in 1994. The project operator, Sakhalin Energy Investment
Company Ltd., is also a joint venture, whose shareholders are Gazprom (50 percent plus

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JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

one share), Royal Dutch Shell (27.5 percent minus one share), Mitsui (12.5 percent), andMitsubishi (10 percent). Unlike Sakhalin-I, the Japanese participant in this project is agenuinely private business. Initially, the project was a purely foreign one, but Russia’s gas
monopoly took effect in 2006, altering its ownership.
Sakhalin-II has always taken precedence over Sakhalin-I. It operates Russia’s first-ever
LNG plant, exporting natural gas to Japan, South Korea, and other Asian countries. It is
the source of “emergency” supplies to the Japanese market, which was at risk of blackouts
following the shutdowns of nuclear power plants after the 2011 Fukushima disaster. Japan’s
imports exceeded 8 million tons per year from 2012 to 2014, while the volume of long-term
contracts is 5.5 million tons annually. A plan to expand the LNG plant with an additional
capacity of five million tons per year is under discussion.

The East Siberia-Pacific Ocean (ESPO) Pipeline
The ESPO pipeline transports crude oil extracted from the East Siberia oil fields forexport to Asia-Pacific markets. The trunk line runs from Tayshet in the Irkutsk region to
the Kozmino oil loading port in Primorsky territory, with a branch line to the Chinese cityof Daqing (Heilongjiang province), the center of China’s oil industry. Russia’s oil pipelinemonopoly company, Transneft, owns and operates the Russian part.
This project is a Russian-Chinese joint project, as the construction of the branch line
was an outcome of successful bilateral negotiations among state-owned enterprises fromboth countries: Rosneft, Transneft, and China National Petroleum Corporation (CNPC).
Transneft constructed the other parts, unilaterally. There are no Japanese investments in orloans to this project.
However, Japan played a substantial role in bringing the idea about, by committing
support to this project. In January 2003, then-Prime Minister Junichiro Koizumi visited
Moscow and expressed his “careful attention” to this project. The Japan-Russia Action Plan,
the outcome of the summit meeting with President Vladimir Putin, stipulated, “both sides
will undertake reviews at the governmental and private-sector levels on the advancement ofspecific cooperation in the realization of energy transportation” in the Far East and Siberia.
Four months later, the Russian government endorsed the plan with the main line to the
Kozmino port and the spur to China. Recalling the 1990s origin of the project, for whicha Russian private oil company (Yukos) and CNPC had agreed to construct a pipeline to
China, the decision in May 2003 seemed to be an inversion in the competition between the
two Asian consumer countries, in favor of Japan.
The record, to date, proves that the decision was right, or rather beneficial for all. The
pipeline system has enhanced development of oil fields, and Japan, China, South Korea, andother Asian economies have been able to diversify their oil procurement sources, which arehighly dependent on the Middle East.

ECONOMIC RELATIONS WITH EMPHASIS ON ENERGY

105

Development of Oil Fields in the Irkutsk Region
As noted above, the ESPO pipeline opened opportunities for untouched oil fields tobe developed. The Japan Oil, Gas, and Metals National Corporation ( JOGMEC) had
initiated geological surveys and exploration works in East Siberia, establishing joint ventureswith partners from the Russian side. Receiving the positive results of geological surveys,
JOGMEC invited private companies (Itochu and INPEX) to two blocks in 2013. Theirlocal partner, Irkutsk Oil Company (INK), announced that the project was proceeding to
the pilot production stage in November 2015.1 Eventually, this and/or other oil fields are
expected to export the “Japanese oil” home.

Yamal LNG
Unlike the other projects, Yamal LNG project’s operator is not state-owned; it is theindependent gas company Novatek. Its foreign partners are Total E&P Yamal (20 percent,France) and CNODC (20 percent, China). Its production site is located in Yamal peninsula,projecting into the Arctic Sea. It plans to export LNG to both Europe and Asia throughthe Northern Sea Route. Currently, the project is at the construction stage. The production
capacity of the first stage is 5.5 million tons per annum (mtpa), which will commence in2017, with further expansions to 11.0 mtpa in 2018 and 16.5 mtpa in 2019.
Although there are no shares held by Japanese gas traders, Japanese businesses find that
their products are being used in the project. The engineering, procurement, and construction
contractor consortium involves Technip (France) and two Japanese companies ( JGC andChiyoda). Mitsui O.S.K. Lines was awarded an LNG tanker operation contract.

Vladivostok LNG
This project, led by Gazprom, envisages production of 15 million tons of LNG per annum.
The intention is to expand Russia’s LNG exports to East Asia, the world’s largest market,
encompassing Japan, South Korea, China, and Taiwan. This project has been on thepriority agenda of Japan-Russia cooperation since 2009. The Agency of Natural Resources
and Energy of Japan (ANRE), JAPEX, and Itochu, together with Gazprom, conducted a
pre-feasibility study from 2009 to 2010. In line with the agreement between ANRE and
Gazprom, in December 2010, the partner companies in SODECO established a dedicatedcompany, which eventually conducted a joint feasibility study with Gazprom. Relying on
its conclusion, Gazprom approved the Investment Rationale in February 2013. Later inJune 2013, Gazprom and the Japanese company signed a memorandum of understanding

Irkutsk Oil Company. “INK – ITOCHU, INPEX and JOGMEC JV Commences Ichyodinskoye Oil Field Pilot
Production.” November 30, 2015. Accessed January 25, 2016. http://irkutskoil.com/press-center/sovmestnoepredpriyatie-ink-i-yaponskikh-kompaniy-itochu-inpex-i-jogmec-pristupilo-k-probnoy-eksplua/.
1

106JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

on further cooperation, including marketing activities in Japan. All of these steps weresuccessful. The disaster in Fukushima in March 2011 stressed the significance of energy
cooperation. Prime Minister Shinzo Abe’s visit to Moscow in April 2013 accelerated theprocess as well.
However, the process has stagnated since 2013. Whereas Gazprom has seemed to
devote serious attention to the “Power of Siberia” pipeline project to realize the large gas
deal with China, signed in 2014, as well as Sakhalin-II expansion and other projects in
the Far East, there have been few official announcements on the progress of Vladivostok
LNG. Remarks of top management, reported in the media, indicate that it is not among thecompany’s priorities.2

Proposed Sakhalin–Japan Gas Pipelines
The idea to construct gas pipelines from Sakhalin to Japan has a long history and has beenpart of various discussions. In 1999, for example, key participants in the Sakhalin-I project(Exxon Mobile, JAPEX, Itochu, and Marubeni) started a feasibility study of two proposedroutes to Honshu, the main island of Japan. Although the study concluded that the plan
was technically feasible, this project has not been realized. After the Fukushima accident,
given Japan’s need for less expensive fuel, the pipeline option was revived as a subject of
discussion. Below, I discuss various options for transporting natural gas to Japan.

The Magadan Continental Shelf
In May 2013, INPEX agreed with Rosneft on cooperation in two exploration blocks in
the Sea of Okhotsk, approximately 50–150 kilometers south of Magadan city. No final
agreement, however, has been announced to establish a joint venture that would conduct
exploration work.

Natural Gas Cooperation
This section takes a closer look at discussions about cooperation on natural gas, whichshould be distinguished from other fossil fuels. The development of oil and coal deposits iseasier because their project operators have relative flexibility. They do not need large initialinvestments in gas transportation facilities. Oil and coal are commodities with liberalized,
open markets. On the other hand, natural gas development projects are more complicatedand require careful consideration before implementation. At least so far, both its technical

For an example, see Zolotoj Rog. “Vladivostokskii SPG Ushel iz Prioritetov ‘Gazproma,’ no v Planakh Ostalsia”[Vladivostok LNG No Longer a Priority for Gazprom, Although Plans Remain]. October 7, 2015. Accessed January
25, 2016. http://www.zrpress.ru/business/primorje_07.10.2015_74492_vladivostokskij-spg-ushel-iz-prioritetovgazproma-no-v-planakh-ostalsja.html.
2ECONOMIC RELATIONS WITH EMPHASIS ON ENERGY

107

features and trade practices have made the natural gas business very complicated. It is nota coincidence that coal cooperation projects could become a reality, even in the Soviet era,and oil production in the Sakhalin projects started earlier than gas production. The fact that
the ESPO oil pipeline was realized much earlier than the “Power of Siberia” gas pipeline
is another confirmation of their substantial differences. Natural gas projects need stablebusiness conditions during their long project lifespans.
In this regard, it is quite natural that both governments found a potential joint projectin the gas sector, aimed at upgrading bilateral cooperation after the successful cooperationin the ESPO project. If they were to succeed with Vladivostok LNG, they could
announce that bilateral cooperation has reached a new stage with more stable and deeplyinterconnected relations.
The other options to transport Russia’s natural gas are expansion of Sakhalin-II LNG,
the Far-East LNG proposed by Rosneft, the Sakhalin-Japan pipeline, and the VladivostokJapan pipeline. The Vladivostok LNG was the frontrunner, while it was seen as a priority
for bilateral cooperation. The situation changed when Russia agreed with China to supply
natural gas from East Siberia. At this moment, all options have a chance to be realized.
One determinant is price competitiveness. In this regard, the Sakhalin-II LNG
expansion and the Sakhalin-Japan pipeline surpass the others, as they can be realized at alower cost (see fig. 3). There is, however, another significant determinant: the probability

Figure 3. Cost of natural gas supply to Japan.
14
12
10

$/MBtu

8

3.3

3.0

0.4

0.8

East Africa

Australia

1.0

6
4
2
0
-2
-4

Sakhalin-2
LNG(3 Train)

Sakhalin-1
LNG

Vladivostok
LNG (East
SiberianGas)

Vladivostok
LNG (gasfrom
Sakhalin)

SakhalinJapan
pipeline

Yamal LNG

US LNGn Production n Prod Tax n Pipelinen Export Dutyn Liquification n LNG trans n Regasification n Margin

Russian LNG, and especially pipeline gas, is more competitive at $10/Mbtu, some projects—even at $8/Mbtu
Presented at the “Eighth Japan-Russia Energy and Environment Dialogue in Niigata,” November 4, 2015. Courtesy of Tatiana Mitrova.

108

JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

of changes in natural gas export regulations. The current regulations restrict the amountof natural gas to Sakhalin-I, which is the only available source of exports to Japan in the
short-term. If the government would lift the exclusive right of Gazprom to export pipeline
natural gas and/or expand eligibility for the export duty exemption to all Far Eastern naturalgas, including pipeline exports, Rosneft would be able to pursue a wider variety of export
options. It is difficult to foresee how the struggle between Gazprom and Rosneft will besettled, which makes the future of export options uncertain. On the Japanese side, as well,there is no consensus on import options.

Factors Leading to Stagnation in Energy Cooperation
It might not be fair to conclude that energy cooperation between the two countries has
now reached a point of stagnation, because there are several ongoing cooperative projects, as
reviewed above, along with other joint projects in the fields of energy saving and renewableenergy, which are not discussed here. Nevertheless, the current drift in the flagship project,
Vladivostok LNG, alone, should be convincing evidence that momentum has been lost andstagnation may be occurring.
There are structural and temporary factors discouraging a large-scale energy
cooperation project, particularly in natural gas. Structural or longstanding impediments are:discord between energy business mechanisms, resource nationalism, and domestic rivalry.
First, there are specific features in Japan’s energy resource procurement abroad.
Traditionally, procurement is handled by competent, major trading companies, including
Mitsubishi, Mitsui, Sumitomo, Itochu, Marubeni, and Sojitsu. Meanwhile, the stateowned companies, INPEX, JAPEX, and JOGMEC, participate in less commercially viable
projects with low-cost funding from the government. They all are mediators and need
explicit or implicit consent from buyers (power generation companies, gas utilities, or large
industries) before deciding to invest in LNG projects. In terms of both scale and function,
Japanese players are heavily dependent on the government (ANRE), other trading and/or
oil companies, and buyers. The Russian government and Gazprom seem to be bewildered in
identifying and communicating with their counterparts. The problem is obvious, comparing
Japan with China or South Korea, where CNPC, KOGAS, and some other state-owned
enterprises could act as self-sufficient partners.
Second, Russia strengthened its resource nationalism policy during the period of higher
energy prices. In practical terms, it closed the door for Japan to take part in the developmentof attractive assets, which might have encouraged the Japanese side to act much morepositively. At the same time, the policy created a perception problem, arousing suspicions
within Japanese society about the supply stability from Russia.
Third, the domestic rivalry between Gazprom and Rosneft complicates the situation.
As reviewed above, the partners of Gazprom involved in Vladivostok LNG are theECONOMIC RELATIONS WITH EMPHASIS ON ENERGY

109

consortium members of the Sakhalin-I project. Rosneft has not found a way to export
natural gas from Sakhalin-I. In Japan, there is uncertainty about the choice between pipeline
gas and LNG.
In the context of structural barriers to energy cooperation, I argue that the territorial
dispute is not a serious obstacle. The Japanese investors in the Sakhalin projects, including
state-owned enterprises, have dared to go across the border to the Sakhalin region, theadministration of which covers the Kuril Islands, including the Northern Territories. Thus,
Japan does not allow this territorial issue to interfere with energy development.
Among discouraging factors that are short-term or temporary, there are energy resource
prices, the sanctions against Russia, and energy sector reforms in Japan. Although it might
be too obvious that a low price for oil or gas depresses resource development projects, theVladivostok LNG project is a special case with even more severe conditions. In order toachieve price competitiveness with other gas sources, such as Sakhalin-II LNG, Vladivostok
LNG needs to procure cheap gas, which would be possible only through cross-subsidies
for long-distance pipeline transport to the plant site. This means that the project is very
vulnerable. When energy prices go down, either the project must operate with a loss, or the
cross-subsidy would impose a heavy burden on domestic consumers. In short, the project
can go forward only under high energy prices.
The sanctions against Russia matter to some extent, but not critically. The impact ismore psychological than material. My recent conversations with Japanese businesspeoplesuggest that they hesitate to take bold steps, particularly given the risks of violating
sanctions. To be fair, however, Japanese businesspeople have never been brave in Russia,
where they fear changing conditions could leave them with unfavorable financial
commitments.
The simultaneity of Japan’s energy market liberalization and the Fukushima accident
complicated the situation. A detailed examination of this issue is unnecessary here; the key
point is that uncertainty about future market conditions creates difficulties in making longterm commitments for huge investment projects.

Conclusion
The fact that Japan, one of the largest energy importers, has a neighbor—Russia—that is
one of the largest energy exporters, makes it natural that the two countries would cooperate
in the energy sector. Even though Abe expressed his strong intention to improve bilateralrelations and eventually to put an end to the longstanding territorial dispute and conclude
a peace treaty, there are no signs of a breakthrough. This impasse may be partly due tothe failure to reach even a tentative understanding on any large-scale energy project, apartfrom a few that date from earlier periods. Recently, the Vladivostok LNG project wasconsidered the most likely choice for opening a new era of deepening mutual trust through110JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

long-term, pragmatic cooperation. As preparation continues for a Putin visit to Tokyo in
2016, however, external and internal conditions have changed significantly, making it moredifficult for the two governments to identify a project that would serve as a new symbol ofcooperation.
In my personal view, there are three scenarios that might lead to a possible symbolic,bilateral energy cooperation project. One is to start new, joint exploration and/or
development projects in onshore oil fields, which are not the target of the existing sanctions.
Igor Sechin, president of Rosneft, proposed several such oil fields to Japanese investors at aseminar in Tokyo in November 2015. Among them is the Verkhne-Chon oil field, which isone of the most prominent oil fields discovered in Eastern Siberia and has never been open
to foreign investors. As Russia is shifting to opening up investments in natural resources,
there should be more chances for big deals. In terms of technical arrangements, this option
is easier than other projects. The decision will depend mainly on political and commercial
considerations.
In another scenario, it might happen that the two governments would arrange anotheroption to transport natural gas from the Sakhalin-1 project to Japan. It might be a pipeline
as proposed prior to 2000, or an LNG plant on Sakhalin as proposed by Rosneft. In fact, tosatisfy the diverse interests of stakeholders, both Japanese and Russian, is a time-consuming
process. So far, I have not observed any sign of sincere efforts in this direction among thestakeholders.
The least promising scenario is to treat Vladivostok LNG as a symbol of cooperation.
Even though there is little chance of realizing this project in the near future, neither theJapanese nor Russian government has officially announced its termination, and it still
remains on the cooperation agenda. If negotiations on new flagship projects should fail,officials in charge might feel obliged to return to this project, even though it would serve noother purpose than to buy more time.
History shows that energy cooperation has bolstered bilateral relations between Japanand Russia. I would like to express my hope that advanced energy cooperation will nurture
mutual trust and, in turn, become a solid foundation not only for bilateral relations but also
for regional stability in Northeast Asia.

Chapter 11

The Russia-Japan Economic
Relationship: It Is Political,
but Not about the Territories
Alexander Gabuev

Economic ties between Russia and Japan are the most important stabilizing force in theirbilateral relations, which technically have not reached a state of durable peace after WorldWar II. Despite very slow progress negotiating the final peace treaty, which ultimately will
have to include a settlement of remaining territorial disputes in the Kuril Islands, their tradevolume has grown significantly in absolute numbers. From 1999 to 2014, bilateral trade
increased around twelve times, from $2.58 billion to $30.8 billion. At the same time, these
positive dynamics cannot obscure the sad truth of bilateral relations: neither power is an
important trading partner or source of investment for the other.
In 2014, Japan made it to the top ten as a source of Russian imports and a destination
for Russian exports, but its share remained at 4.6 percent of imports and 4.3 percent ofexports. For the Japanese economy, its western neighbor plays an even less prominent role.
In 2014, only 1.3 percent of Japanese exports went to Russia, and 3.6 percent of imports(mostly hydrocarbons) came from Russia. In investments, the picture looks even grimmer,with just 1.29 percent of foreign direct investment to Russia originating in Japan, and just
0.02 percent of outbound Russian investment going to its eastern neighbor. For Japanesecompanies, Russia comprises just 0.24 percent of their outbound investment.
The low level of economic cooperation between Russia and Japan is surprising,considering the number of factors that would suggest greater potential for mutually
beneficial cooperation. Both economies are fairly large ( Japan was the third largest global
economy in 2013 by nominal gross domestic product (GDP), while Russia was the tenthlargest). The structure of the economies is complementary: Japan is a manufacturing
superpower with world-class infrastructure and indigenous innovations, while Russia isrich in natural resources (not only hydrocarbons, but also coal, metals, arable land, andwater, among others) and requires a leap forward in infrastructure building. The mismatch
between potential cooperation opportunities between Moscow and Tokyo on the one

112JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

hand and the poor state of current relations in trade and investment on the other requires
explanation.
Based on a series of interviews with Russian and Japanese sources (officials,
businesspeople, and experts) conducted from March through July 2015, this chapter argues
that the major obstacle for development of the economic relationship lies in politics. But
political problems are not limited to their decades-old territorial dispute, as simplistic,
conventional wisdom might suggest. Rather, the real problems that hinder Japanese
investment into Russia and the volume of bilateral trade are the direct result of the schism
between Moscow and the West, aggravated by the introduction of economic sanctions
against Russia in 2015, and the Russian government’s own difficulties managing its national
economy. If these factors are not addressed, resolution of the territorial dispute will not help
to increase bilateral economic cooperation between Moscow and Tokyo.

Close, but Not Important
Since the breakup of the Soviet Union and emergence of an independent Russia in
December 1991, economic relations with Japan entered a new stage. During the Cold
War, trade with Japan remained very limited: not only did the Soviet Union not have any
infrastructure to export oil and gas to its Asian neighbors, but foreign investment in the
Russian Far East was impossible, and many areas were developed as military outposts
against the United States and its Asian allies, as well as China. After the Soviet Union was
dissolved, many limitations on bilateral cooperation disappeared. In the early 1990s, bilateralties were driven mainly by the regional players in the Russian Far East, as Moscow’s politicaland economic control over the region was weak. Major players in the local economy werelocal business groups, often directly controlled by or paying “protection fees” to criminal
gangs. A big share of bilateral trade remained in “black” or “grey” areas of smuggling, illegal
fishing activities, and duty-free imports of used Japanese cars to the Russian Far East
(they were further redistributed to Siberia and even European Russia through the “Green
Corner” market in Vladivostok). Towards the end of the 1990s, however, relations became
more formally structured. After the election of Vladimir Putin as president in 2000, thecentral government’s control over the region was gradually restored. Former mafia clanstransformed themselves into “normal” companies, and gang leaders were coopted into thepolitical elite.
Bilateral trade over the last eighteen years has expanded dramatically—around twelve
times. The following graph shows rising trade volumes between 1996 and 2014 (see fig.
6).1 Several important observations can be made. First, the volume of trade started to pick1

The author wants to thank Tomohiro Harada, his research assistant at the Carnegie Moscow Center.

THE RUSSIA-JAPAN ECONOMIC RELATIONSHIP: IT IS POLITICAL

113

Figure 4. Russia’s exports to and imports from Japan, 1996–2014.
25

US$ Billion

20
15

Export n Import
10

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

0

1996

5

Source: UN Comtrade/Rosstat.

up in 2003 and was constantly rising, except for the brief period of decline in 2009, due tothe effects of the global financial crisis and oil price collapse. Second, there are two periods
when the trade balance was in favor of Japan: 2004 through 2009 and 2011 through 2012.
Since 2012, we have observed a steep rise in Russia’s exports to Japan (from $15.59 to$19.88 billion in 2014) matched by a decline in Japanese exports to Russia (from $15.68
billion to just $10.92 billion in 2014).
The dramatic increase in Russia’s export volume to Japan starting from 2010 ($12.49
compared to $7.26 billion in the previous year) can be explained by two factors. First is thestartup of a liquefied natural gas (LNG) plant on Sakhalin Island—a project in which theRussian gas monopoly Gazprom is a controlling shareholder (50 percent plus one share)
and the Japanese firms Mitsui (12 percent) and Mitsubishi (10.5 percent) are minority
stakeholders (27.5 percent minus one share belong to Royal Dutch Shell).2 Second is theoperation of the Eastern Siberia–Pacific Ocean (ESPO) oil pipeline in December 2012,
with the port of Kozmino as a base for the export of Eastern Siberian oil to Asian-Pacificmarkets.3
The launch of these two projects has fortified Russia’s position as an important supplierof oil and gas to Japan. According to the U.S. Energy Information Administration, Japanrelied on Russia for 8 percent of its oil imports (eleven months of 2014) and 10 percent

For more information on the Sakhalin-2 project, including recent production and distribution statistics, see the
Sakhalin Energy website (http://www.sakhalinenergy.ru/en/company/overview.wbp).
3
Transneft. “Eastern Siberia-Pacific Ocean Pipeline System. Skovorodino – Kozmino Section (ESPO-2).” Accessed
March 1, 2016. http://www.en.transneft.ru/about/projects/realized/10709/.
2

114JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

Figure 5. Top ten export items from Russia to Japan in 2004.
(Total export: US$ 3,400 million)
Aluminum and articles thereof
Mineral fuels, oils, distillation products, etc.
Wood and articles of wood, wood charcoal
Iron and steel
Fish, crustaceans, molluscs, aquatic vertebrae
Ores, slag and ash
Other base metals, cemets, articles thereof
Inorganic chemicals, precious metal compound
Fertilisers
Pulp of wood, fibrous cellulosic material, waste

1,300
882..8
649.2
85.3
79.6
31.6
26.9
24.7

n US$ Millions

11.7
9.2

Source: UN Comtrade/Rosstat.

Figure 6. Top ten export items from Russia to Japan in 2013.
(Total Export: US$ 19,670 million)
Mineral fuels, oils, distillation products, etc.
Aluminum and articles thereof
Pearls, precious stones, metals, coins, etc.
Wood and articles of wood, wood charcoal
Ships, boats and other floating structures
Iron and steel
Fish, crustaceans, molluscs, aquatic vertebrae
Ores, slag and ash
Rubber and articles thereof
Pulp of wood, fibrous cellulosic material, waste

17,000
697
560.4
480.1
239.8
213.5
202.8
117.3
23.6
23.2

n US$ Millions

Source: UN Comtrade/Rosstat.

of LNG imports (2013).4 Another consequence of these two large projects was thereinforcement of the current trade structure between the two countries, in which Japan ishome to sophisticated exports, while Russia is merely a commodity exporter. This trend is
illustrated in figures 5 through 8, reflecting the structure of Russia’s exports to Japan andJapan’s exports to Russia in 2004 and 2013.
As is evident from figures 5 and 6, the major trend in the Russian export structure is
the steady growth of the mineral fuels group in the overall export volume. In 2003, the main
export item was aluminum (about 38.2 percent) with mineral fuels occupying the second
U.S. Energy Information Administration. “Japan.” January 30, 2015. http://www.eia.gov/beta/international/
analysis.cfm?iso=JPN.
4

THE RUSSIA-JAPAN ECONOMIC RELATIONSHIP: IT IS POLITICAL

115

Figure 7. Top ten import items from Japan in 2004.
(Total import: US$ 3,900 million)
Vehicles other than railway, tramway
Nuclear reactors, boilers, machinery, etc.
Articles of iron or steel
Optical, photo, technical, medical, etc.
Electrical, electronic equipment
Rubber and articles thereof
Plastic and articles thereof
Miscellaneous chemical products
Pharmaceutical products
Toys, games, sports requisites

2,500
458.5
259.9
204.5
79.6
91.9
18.2
14.2
13
11

n US$ Millions

Source: UN Comtrade/Rosstat.

Figure 8. Top ten import items from Japan in 2013.
(Total import: US$ 10,920 million)
Vehicles other than railway, tramway
Nuclear reactors, boilers, machinery, etc.
Electrical, electronic equipment
Rubber and articles thereof
Optical, photo, technical, medical, etc.
Articles of iron or steel
Miscellaneous manufactured articles
Plastic and articles thereof
Tools, implements, cutlery, etc. of base metal
Furniture, lighting, signs, prefabricated

7,200
771.6
688.7
566.8
477
176.2
131.8
75.8
66.5

2,700

n US$ Millions

Source: UN Comtrade/Rosstat.

spot in the trade structure, with just 26 percent. In 2013, the picture was entirely different,with mineral fuels comprising 86.4 percent of Russian exports, while aluminum’s share wasscaled down to just 3.5 percent.
The dynamics of imports from Japan over the same time frame show that the overall
structure has not much changed over the decade of 2004–2013, as reflected in figures 7
and 8.
Having identified the trade pattern between Russia and Japan (it can be formulated
as “Russian oil and gas in exchange for Japanese machinery”), I still need to answer themain question: how economically important is each country to the other? This can be done
through analysis of trade shares. The data are shown in table 2.

116JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

Table 2. Trade between Russia and Japan, by year.
RUSSIA

JAPAN

Export to Japan/
Total Export

Import from Japan/
Total Import

Export to Russia/
Total Export

Import from Russia/
Total Import

Rank

%

Rank

%

Rank

%

Rank

%

1996

7

3.8%

13

1.6%

37

0.2%

18

1.1%

1997

10

3.4%

15

1.5%

37

0.2%

18

1.2%

1998

11

3.0%

14

1.9%

40

0.3%

20

1.0%

1999

12

2.9%

17

1.5%

49

0.1%

18

1.2%

2000

14

2.7%

14

1.7%

50

0.1%

21

1.2%

2001

14

2.4%

13

2.1%

42

0.2%

21

1.1%

2002

18

1.7%

15

2.1%

33

0.2%

22

1.0%

2003

19

1.8%

9

3.3%

31

0.4%

21

1.1%

2004

16

1.9%

5

5.2%

25

0.6%

21

1.3%

2005

19

1.5%

4

5.9%

23

0.8%

21

1.2%

2006

17

1.5%

4

5.7%

20

1.1%

22

1.1%

2007

14

2.1%

4

6.4%

13

1.5%

14

1.7%

2008

14

2.2%

3

7.0%

11

2.1%

15

1.8%

2009

14

2.4%

7

4.2%

27

0.6%

17

1.6%

2010

10

3.1%

4

4.5%

20

1.0%

13

2.3%

2011

11

2.8%

4

4.9%

15

1.4%

13

2.2%

2012

9

3.0%

4

5.0%

15

1.6%

13

2.3%

2013

6

3.7%

7

4.3%

14

1.5%

12

2.8%

2014*

6

4.6%

5

4.3%

18

1.3%

10

3.1%

Source: UN Comtrade (http://comtrade.un.org/labs/BIS-trade-in-goods), except for 2014 data marked by * from Rosstat(http://www.gks.ru/bgd/regl/b15_12/IssWWW.exe/stg/d02/27-06.htm).

As is clearly seen in the data, the two countries’ economic importance to each otheris growing but remains relatively small. The years 1999–2006 can be identified as a period
during which Russia and Japan were not a priority for each other. From 1999 to 2004,
Russia was a destination for just 0.1–0.4 percent of Japanese exports, ranking from thirtyfirst to fifteenth as a partner. For Russia, in 2005 and 2006, Japan accounted for just 1.5
percent of its exports.
The recent figures show that Japan’s role as a source of imports and destination forexports has grown. Since 2010 (launch of Sakhalin-2), Japan has been among the top ten
export destinations for Russia, and its share is growing—from 2.8 percent in 2011 to 4.6

THE RUSSIA-JAPAN ECONOMIC RELATIONSHIP: IT IS POLITICAL

117

percent in 2014 (sixth in rank). As for imports, Japan has been on the top ten list since 2003
and accounts now for 4.3 percent of Russian imports (fifth in rank)—much better than in
the past, but still a far cry from 19 percent, China’s share of Russian imports the same year.5
For Japan, the relative importance of Russia is even smaller. Only in 2014 did Russia makeit onto the top ten list of imports for Japan, with a share of 3.1 percent (tenth in rank), but it
remained a destination for just 1.3 percent of Japanese exports (eighteenth in rank).
The share of bilateral investments is even smaller. According to Russian Central Bank
statistics, Japan’s share of Russian outbound foreign direct investment has never exceeded
0.04 percent (2007) and was 0.02 percent in 2014.6 Japan’s share of foreign direct investment
to Russia peaked in 2013, but remained at modest levels of 1.29 percent.7 For Japan, theshare of investments to Russia has grown over the last fifteen years, from 0.03 percent in2001 to 0.24 percent in 2014. Investment from Russia totaled 0.02 percent in 2014.8
The negative dynamics became even more evident in 2015. According to Japan’s
Ministry of Finance statistics,9 the volume of bilateral trade in the twelve months of 2015
was just slightly over $20.8 billion, of which $5.1 billion was Japan’s exports to Russia,
and $15.7 billion was Japan’s imports. The overall volume of trade has, thus, decreased by
32.5 percent, with Japan’s export collapsing by 53.3 percent and imports decreasing by 21
percent. These figures can be explained by two factors: decreasing commodity prices andthe contraction of the Russian economy. As Ambassador Evgeniy Afanasiev pointed out
in his December 22, 2015 remarks to the press, the physical volume of oil shipped to Japan
increased in 2015 by ten percent,10 so the drop in hydrocarbons-dominated Russian exports
can be explained by the decline of commodity prices. The Russian Ministry of Economic
Development has published a document that also blames the 30 percent drop in Russia’s
exports on low oil prices (the Ural’s reference price decreased by around 50 percent in 2015).
The dramatic collapse of imports from Japan can be attributed to economic turbulence

Ministry of Economic Development of the Russian Federation. “Analiticheskaia Spravka o Rossiisko-Kitaiskom
Torgovom Sotrudnichestve v Ianvare-Sentiabre 2015 Goda” [Analytical Review of Russian-Chinese tradecooperation in January-September 2015]. Accessed March 1, 2016. http://www.ved.gov.ru/exportcountries/cn/
cn_ru_relations/cn_ru_trade/.
6Bank of Russia. “Russian Federation: Outward Foreign Direct Investments by Russian Residents, by Instruments
and Geographical Allocation, 2007 - 2013.” Accessed March 1, 2016. http://www.cbr.ru/eng/statistics/print.
aspx?file=credit_statistics/inv_out-country_e.htm&pid=svs&sid=ITM_4401.
7
Bank of Russia. “Russian Federation: Inward Foreign Direct Investment, by Geographical Allocation, 2007–2013(equity, Reinvestment of Earnings, Debt Instruments).” Accessed March 1, 2016. http://cbr.ru/eng/statistics/print.
aspx?file=credit_statistics/inv_in-country_e.htm.
8
JETRO. “Chokusetsu Tōshi” [Foreign Direct Investment]. Accessed March 1, 2016. https://www.jetro.go.jp/
world/japan/stats/fdi.html.
9Japan Ministry of Finance. “Trade Statistics of Japan.” Accessed March 1, 2016. http://www.customs.go.jp/toukei/
srch/indexe.htm.
10
Ekonomika Segodnia. “Tovarooborot s Iaponiei v 2015 Godu Snizilsia na 30%” [Trade with Japan decreased by
30% in 2015]. December 22, 2015. http://rueconomics.ru/138833-tovarooborot-s-yaponiey-v-2015-godu-snizilsyana-30.
5

118JAPAN-RUSSIA RELATIONS: IMPLICATIONS FOR THE U.S.-JAPAN ALLIANCE

in Russia and ruble devaluation, which can be traced to price shocks in the global
commodity markets, but was also affected by Western economic sanctions. The ruble has
lost more than 50 percent of its value since March 2014, and the ongoing currency volatility(reflecting the volatility of oil prices) has spooked many investors and affected the abilityof Russian firms and households to buy expensive, imported goods, including those fromJapan. The economy contracted in 2015 by 3.7 percent.11
The outlook for 2016 and beyond continues to be grim. According to the Ministry of
Economic Development forecast, if the oil price for 2016 hits a projected US$50 a barrel,
Russia’s GDP will grow by a modest 0.7 percent. But if the price of a barrel of oil is US$40,
Russia’s economy will contract by one percent. The adjustment process will be most painful
for the state and for ordinary citizens. According to Minister of Finance Anton Siluanov,the budget for 2016 will be balanced only if the price of oil reaches US$82—a figure that
seems unrealistic to all industry analysts. Russia’s Development Center of the Higher
School of Economics has calculated that, if the oil price drops to the US$25 mark, thebudget will lose about 3.4 trillion rubles in revenue and will need to be cut by 20 percent inorder to maintain a three percent GDP deficit level.12
Facing that reality, Russian officials in private conversations do not expect a major
influx of foreign investors to Russia, either in resource sectors or in businesses targeting theRussian market. There may be some investments motivated by strategic considerations ofaccessing natural resources (examples include the Chinese Silk Road Fund investment in the
Yamal LNG project in December 2015), but no major developments with investors who
have only economic motivation, including Japanese companies.13

Investment Climate: Will It Ever Get Warm Enough?
Even before the 2014–2015 economic downturn, the low amounts of trade andinvestment between Russia and Japan could be called surprising, considering the size ofboth economies, their geographic proximity, and the complementary structures of theireconomies. Japan’s drive to diversify suppliers, and Russia’s strategy to develop the Far East
as a manufacturing hub by attracting smart money from developed economies in the AsiaPacific, make cooperation between the two countries natural. Why is it not happening, or atleast not on a scale Moscow and Tokyo might desire? It is worth listening to the people who

Interfax. “Rosstat Otsenil Padenie VVP Rossii v 2015 Godu v 3,7%” [Rosstat Estimates Russian GDP Fell 3.7%
in 2015]. Vedomosti. https://www.vedomosti.ru/economics/news/2016/01/25/625319-rosstat-padenie-vvp.
12
Interfax. “Tsentr Razvitiia VShE: pri Nefti v $25 Rossiiskii Biudzhet Poteriaet Okolo 20% Dokhodov” [Higher
School of Economics: with Oil at $25 per Barrel, Russian Budget will Fall Short by 20%]. 22 January, 2016.
Vedomosti. https://www.vedomosti.ru/economics/news/2016/01/22/625085-vshe-nefti-25-20-dohodov.
13
Confidential interviews with Russian officials during the Gaidar Economic Forum in Moscow, January 13-15,
2015.
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shape the economic relations between Russia and Japan—businesspeople and officials on
both sides.
So far, there is just one major, ongoing study of Japanese investors’ attitudes towards
Russia, conducted by the Japan External Trade Organization ( JETRO), whose latest
available survey was conducted in 2014 and published in March 2015.14 Among 94
companies surveyed, 78.5 percent of respondents indicated “exchange rate volatility” as themost pressing risk for their investment in Russia (48.4 percent in 2013). The next mostimportant risk factor identified by respondents was “unstable political and social climate”(74.2 percent, a twofold increase from 37.1 percent in 2013). The third risk was thecomplexity of administrative procedures, which was cited by 67.5 percent of respondents;
and the complexity of the tax system was cited by 59.1 percent. It is worth noting that 55.9
percent of respondents said they feel the negative impact of Western sanctions on theirbusiness.
In-depth interviews, conducted from March through December 2015 in Tokyo,
Sapporo, Vladivostok, and Moscow, confirm this picture and add to its complexity. Theinterviewees included twenty Russian and Japanese diplomats in charge of trade andinvestment and representatives of large companies (with 60 percent in the oil and gas sector
and 30 percent in banking) on both sides.
Most of the Japanese interviewees divided the barriers into two large categories. One
was the omnipresent problems related to Russia’s management of the economy, particularlyin the Russian Far East. Many of them were listed in the JETRO survey, including thecomplexity of administrative procedures, complexity of the tax regime, underdeveloped
legislation and non-transparent implementation, unclear policy orientation of thegovernment, and restrictions on foreign investments.15 Other problems mentioned wererenegotiations of existing federal rules, which may affect future investment projects. (A casein point was reports about renegotiation of the energy industry’s taxation system.)16 The
Japanese investors and officials pointed out that the pace of changing rules seems to haveincreased since 2013.
The other group of negative factors included a recent combination of political andeconomic trends following Russia’s annexation of Crimea and its growing involvement in
the Ukrainian war, coupled with the impact of declining oil prices. One of the interviewees
called this combination “a perfect storm of Fukushima magnitude” for Japanese investors
JETRO. “2014 Survey on Business Conditions of Japanese-Affiliated Firms in Russia.” March 2015. https://www.
jetro.go.jp/ext_images/en/reports/survey/pdf/2015_03_biz.pdf.
15
Ibid., 37.
16
Papchenkova, Margarita, and Petr Tretyakov. “Minenergo Ne Sobiraetsia Meniat’ Nalogovyi Manevr, Nesmotria
Na Zhaloby Sechina” [Energy Ministry Will Not Adjust Tax Maneuver, Despite Sechin’s Complaints]. Vedomosti.
June 8, 2015. http://www.vedomosti.ru/economics/articles/2015/06/08/595567-minenergo-ne-sobiraetsya-menyatnalogovii-manevr-nesmotrya-na-zhalobi-sechina.
14

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in Russia. The falling oil price made many of the projects the Russian side has pitched
to various Japanese players less attractive, including large projects like Yamal LNG.
Meanwhile, global oversupply in the oil markets made the challenge of managing energy
security less pressing.
The volatility of the ruble became another issue, which was tightly linked to the oil
price. It was not the devaluation, which decreased costs of building infrastructure in Russia,
but rather volatility of the exchange rate and difficulties in calculating reliable financial
models for investment projects in Russia that greatly worried Japanese investors. For
investors in manufacturing (most notably carmakers), targeting the Russian market becameless attractive as a result of the shrinking economy and the decline in disposable income.
Last, but not least, came the sanctions. Japan has introduced sanctions as part of the G7collective action against Russia. But European and U.S. sanctions, particularly the packageof sectorial sanctions introduced in September 2014 after the downing of Malaysian
Airlines Flight 17, caused a lot of nervousness for potential Japanese investors. This factor isalso acknowledged by Russian authorities, as the remarks by Ambassador Evgeny Afanasiev
show.17 Concerns were raised over the possibility of different technologies in the oil and gas
sectors being included in the U.S. sanctions list (particularly LNG-related technologies).
The worries were caused by the U.S. Treasury’s ability to include particular assets on the
sanctions list—like the South-Kirinskoe gas field in August 2015,18 which has caused
many problems for Gazprom and Shell.19 Some problems were seen in projects like Yamal
LNG,20 when French shareholder Total tried to negotiate a loan with the Japanese Bank ofInternational Cooperation.21
Added to the list of factors preventing deeper investment cooperation between Russia
and Japan was the Trans-Pacific Partnership (TPP). Japan became one of the original
signatories to this treaty, while in Russia it was met with hostility. Moscow made clear thatjoining the treaty is not on its agenda. TPP has yet to be ratified by twelve legislative bodies,including the U.S. Congress in an election year, but, if ratified, the treaty could change
foreign direct investment flows in the Asia-Pacific, decreasing non-members’ (including

Rossiia Segodnia. “Rossiiskii Posol Vyskazalsia o Vliianii Sanktsii Iaponii v Otnoshenii RF” [Russian
Ambassador Spoke about the Impact of Japan’s Sanctions against Russia]. December 22, 2015. http://ria.ru/
economy/20151222/1346603625.html.
18
Industry and Security Bureau. “Russian Sanctions: Addition to the Entity List to Prevent Violations of Russian
Industry Sector Sanctions.” Federal Register. August 07, 2015. https://federalregister.gov/a/2015-19274.
19This article describes how both companies have difficulties in bypassing imposed restrictions: Barsukov, Yuri.
“‘Gazprom’ i Shell Podnyrnuli pod Sanktsii” [Gazprom and Shell Ducked under Sanctions]. Kommersant. September
30, 2015. http://www.kommersant.ru/doc/2821271.
20
Reuters. “Financing for Russia’s Yamal LNG Plant Stalls - Sources.” October 19, 2015. http://uk.reuters.com/
article/2015/10/19/russia-novatek-yamal-financing-idUKL8N12G2F020151019.
21
Oil & Gas Eurasia. “Total Negotiating Financing of Yamal LNG Project with Japanese Banks.” October 8, 2015.
https://www.oilandgaseurasia.com/en/news/total-negotiating-financing-yamal-lng-project-japanese-banks.
17

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Russia’s) shares in those investments. So far, Moscow has answered by proposing a project of“economic partnership” among the Eurasian Economic Union, the Shanghai Cooperation
Organization, and the Association of Southeast Asian Nations (ASEAN). This idea wasintroduced in Vladimir Putin’s December 3, 2015, national address without much detail.22
No matter what results this ambitious initiative brings, Japan is not projected to be amember in this framework.
Another set of factors can be sourced from the interviews on the Russian side.
Confirming many trends identified by Japanese experts and businesspeople, the Russians
also identify new challenges that prevent development of economic relations. Manyinterviewees mentioned that the economic side of the relationship is often viewed inpolitical terms by Moscow. Some high-level people expect that Japanese companies will
invest in Russia as a result of a political rapprochement between Putin and Prime Minister
Shinzo Abe. For them, the key obstacle to unlocking the potential of the Russian Far East
to Japanese money is the territorial dispute—as soon as the deal is achieved, the argument
goes, investors from Japan will flood into Russia. Another school of thought in Moscow
hopes for increased Japanese investment as a result of dramatic change in Sino-Russian
relations, following the Ukraine crisis. This group of officials hopes to play Japan against
China in competition for the resources of the Russian Far East—that is, fearing that Russia
may fall into China’s arms, Tokyo will “order” Japanese companies to invest. Both schools
tend to think that large companies in Japan obey government instructions, and that Tokyo isready to use its economic leverage for geopolitical goals.
These expectations of the political leadership and many diplomats are unrealistic,
as many practitioners on the Russian side point out. The economic-financial team in
the government, headed by First Vice Premier Igor Shuvalov (he also chairs a bilateralgovernmental commission on Russia-Japan cooperation), is aware of the real state of thingsand channels its views to the Kremlin. It was not until the middle of 2015 that the Russian
assessment of prospects for deeper economic cooperation between Tokyo and Moscow
started to become more realistic. This fact points to a broader problem in Russia’s policy
towards the Asia-Pacific: lack of an independent, large, and influential expert community tohelp the government and national companies craft a realistic strategy.
Japanese studies in Russia face the same problems as many area studies, particularly
focused on Asia.23 Dmitry Streltsov, head of the Department for Asia Studies at theprestigious Moscow State Institute of International Relations and one of the leading

President of Russia. “Presidential Address to the Federal Assembly.” December 3, 2015. http://en.kremlin.ru/
events/president/news/50864.
23
An example of the state of Russia’s China watching community can be found in: Gabuev, Alexander. “Russia’s
Policy towards China: Key Players and the Decision-making Process.” The Asan Forum. March 5, 2015. http://www.
theasanforum.org/russias-policy-towards-china-key-players-and-the-decision-making-process/.
22

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Japan specialists, argued in a recent interview that the major problems are lack of funds forresearch, a growing generation gap, the deteriorating quality of training, and the hostile
attitude towards U.S. allies, including Japan. The problems with Japan-watching are evident
not only in the academic community but also in the private sector, with lack of independent
consultancies and advisors as well as the small number of in-house experts. Thus, the policy
and economic strategy on the Russian side is ill-informed, and, thus, many expectations canbe unrealistic.

Conclusion
Regarding the territorial dispute, many Russian and Japanese diplomats cite the issue as the
major barrier for increasing bilateral trade. This seems to be one of the incentives to engage
in discussions on Moscow’s side, despite Russia’s overall, hardening position (seen by many
as a negotiating tactic). At the same time, officials in Tokyo seem to link the resolution of
the decades-long, territorial dispute with the possible increase of Japanese investments to
Russia and particularly the Russian Far East. “Pieces of inhabited land for billions in loans,investments, and technology transfers” seems to capture the consensus among many officials
on both sides.
The problem is that, in Japan, the government may not have direct control overbusiness the way the Kremlin controls large Russian companies (even private ones). Even if
the territorial dispute is resolved, it may not change Japanese businesspeople’s perceptions
about investing in Russia. Symbolism is important, but the companies cannot ignore either
commercial realities (low commodity prices and the declining economy of Russia) or theinternational environment (sanctions). The most important factor would be normalizationof ties between Russia and the West and removal of the sanctions.

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