VALDAI DISCUSSION CLUB REPORT
www.valdaiclub.com
THE RUSSIANJAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
Anna Kireeva, Andrey Sushentsov
MOSCOW, AUGUST 2017 Authors
Anna KIREEVA Ph.D. in Political Science, Associate Professor at the Department of Asian and African Studies of the Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation
Andrey SUSHENTSOV Ph.D. in Political Science, Programme Director of the Valdai Discussion Club, Director of the Foreign Policy Analysis Group, Associate Professor at the Department of Applied International Analysis of the Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation
This report has been prepared based on the results of a situational analysis conducted on March 15, 2017 with the participation of: Igor I. Khokhlov, Ph.D. in Political Science, Research Fellow, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences; Anna A. Kireeva, Ph.D. in Political Science, Associate Professor at the Department of Asian and African Studies, Deputy Dean of the School of Political Affairs of the Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation; Mikhail V. Mamonov, Managing Director for International Projects, Russian Export Center; Sergey I. Stepenkov, Executive Offi cer of the Executive Board, Russian Investment Agency; Dmitry V. Streltsov, Doctor of Historical Sciences, Professor, Head of the Department of Asian and African Studies of the Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation; Margarita V. Vasilyeva, Director of the Finance and Law Department, Russian Investment Agency.
The views and opinions expressed in this Report are those of the authors and do not represent the views of the Valdai Discussion Club, unless explicitly stated otherwise. Contents
1. Russian and Japanese Strategic Objectives in East Asia ...... 3
2. Improving Russian-Japanese Relations ...... 3
3. Factors Influencing Russian-Japanese Rapprochement ...... 7 1) The Window of Opportunities Resulting from the Confl uence of the Domestic, Bilateral, and International Agendas ...... 7 2) Japan’s Desire to Prevent Russian-Chinese Rapprochement Based on Anti-Japanese Grounds ...... 8 3) Common Interest in Cooperating on Security Issues on the Korean Peninsula ...... 8 4) Both Countries’ Interest in Economic Cooperation, Primarily in the Russian Far East...... 9 5) Russia’s Desire to Diversify Relations with Regional Partners in East Asia as Part of its Pivot to the East ...... 11
4. Limitations of Russian-Japanese Rapprochement ...... 12 1) Without a Strong institutional and Societal Foundation, the Desire of Leaders Alone is not Enough ...... 12 2) External Inhibiting Factors: the U.S.–Japan Alliance and China’s Strategic Partnership with Russia ...... 14 3) Russia’s Challenging Business Environment and Diffi culties in Implementing Full-Scale Economic Cooperation ...... 14 4) Japan’s Linking of Economic Cooperation with the Territorial Dispute Resolution is Unacceptable for Russia ...... 17 5) The Diffi culty of Formulating a Legal Framework for Joint Economic Activities on the Southern Kuril Islands ...... 19 6) Russian-Japanese Disagreements on Security Issues, over the U.S. Positioning Elements of its Missile Defense System in the Region, and North Korea’s Missile and Nuclear Programme ...... 19
5. Recommendations ...... 20 1) Create a Solid Economic Foundation for Russian-Japanese Relations...... 20 2) Improve the Business Climate and Create Institutionalized Mechanisms to Support Japanese Projects ...... 21 3) Develop a Strategic Dialogue on Issues of Politics and Security ...... 22 4) Develop a Social Dialogue and Cultural Cooperation ...... 23
6. Prospects for Russian-Japanese Rapprochement ...... 23 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
1. Russian and Japanese Strategic Objectives in East Asia
Russian-Japanese relations are not lacking to integrate into the dynamically developing for drama. The two countries gravitate to each region and to develop its Far Eastern territory other in the economic sphere, but are at odds over in cooperation with its Asian neighbors. Moscow territorial issues. Neither country wants to take would like to establish a strong partnership a back seat to the U.S. or China, yet neither with Tokyo aimed at developing the Russian wants to break off their alliance or partnership Far East and at helping Japan become a more with them either. Both strive for independence independent regional player with friendly in regional affairs, yet favor different approaches relations towards Russia. to security and other key issues – including The ideal arrangement for Tokyo would be the North Korean nuclear missile programme for Russia to abandon its support for China and and the U.S. missile defense system. The leaders exhibit greater independence in regional issues, of both states have taken steps towards while Japan would get the disputed southern rapprochement, but the two societies generally Kuril Islands and access to Russian resources. distrust each other and neither side can accept Japan’s long-term plan is to transform Russia the other’s position concerning the Kuril Islands. into one of its closest friends, to the point At the same time, their mutually complementary of forming a U.S.-Japan-Russia triangle in which economic interests naturally draw them together Japan would mediate disagreements between and both countries consider it abnormal that they the other two. have yet to sign a formal peace treaty. The edifi ce In all likelihood, neither of these desired of Russian-Japanese relations can only be erected futures is fully attainable, especially if a confl ict through sustained and painstaking effort. arises that touches on the interests of both Is there sufficient time for the two countries countries. Russia would have diffi culty remaining to accomplish it? neutral if China were to come under pressure or Ideally, Moscow would like to see Russia’s North Korea were attacked. For its part, Japan position in East Asia and the Asia-Pacifi c region would not be able to pursue rapprochement as the exact opposite of what it experiences with Russia if Moscow abandoned its neutrality in Europe, where conflicts, geopolitical in response to heavy pressure on China, or frontiers, sanctions, and echoes of the Cold if Russia took retaliatory action in the event War create a weighty burden. Russia is striving of a military escalation on the Korean peninsula.
2. Improving Russian-Japanese Relations
For the first time in many years, there ‘hikiwake’ (meaning, ‘a draw’). This implies is a chance that Russian-Japanese relations a compromise without clear winners or losers. will see a qualitative improvement. Signs During a visit to Russia by Japanese Prime that relations might normalize first appeared Minister Shinzo Abe in April 2013, the two in 2013. In March 2012, Russian President leaders agreed to renew talks on signing a peace Vladimir Putin proposed resolving the territorial treaty and begin a dialogue in the “2+2” format dispute based on a concept used in judo called to include meetings of their foreign and defense
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 3 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
THE KURIL ISLANDS DISPUTE: HISTORICAL OVERVIEW
7KHʳUVWKDOIRI Maarten de Vries, 7KHʳUVW5XVVLDQ Martin Spangberg, 7KHVHFRQGKDOI 7KHODWHWKFHQWXU\ WKHWKFHQWXU\ Dutch explorer, expedition Russian explorer, RIWKHWKFHQWXU\ -DSDQVHWXS -DSDQHVH SURGXFHGWKHʳUVW to the Kuril Islands mapped all the Islands WKH$LQXFRPHXQGHU PLOLWDU\RXWSRVWV H[SHGLWLRQV map of the Kuril led by Ivan and found a sea route 5XVVLDQUXOH RQWKHLVODQGV FRPHLQWRFRQWDFW Islands Kozyrevsky to Japan DOOWKH,VODQGVPDUNHG RI,WXUXSDQG ZLWKWKH$LQX DVD5XVVLDQWHUULWRU\ .XQDVKLU RQPDSV 1643 1711 1739
Nicolai Rezanov, Russian ambassador, failed to open Japan to trade with Russia. *The indigenous people The growing rivalry between the countries. Nicolai Hvostov and Gavriil Davydov attack of the Kuril Islands Japanese trading posts without state authorization. Japan takes retaliatory actions 1804–1805
1855Possession: Russia Japan Condominium 1875
The Treaty of Shimodo The Treaty of .DPFKDWND3HQLQVXOD The establishment of diplomatic Saint Petersburg relations between the countries. The period of Sakhalin Sakhalin Several Japanese ports to be 6HDRI2NKRWVN Russian opened to trade. Vries Strait development of becomes the boundary thus Sakhalin. Japan .XULO,VODQGV Iturup, Kunashir, Shikotan, and renounces claims Habomai Islands belong to Kuril Islands on Sakhalin in Japan. The status of Sakhalin left exchange for the Iturup XQGHʳQHG GHIDFWR Kuril Islands Kunashir condominium). The boundary owned by Russia Shikotan coincides with Japanese 3DFLʳF2FHDQ +RNNDLGR Habomai WHUULWRULDOFODLPV VRFDOOHG ‘Northern Territories’) 1945 1905
World War II The Treaty of 6HDRI2NKRWVN In accordance with the Allies’ 6HDRI2NKRWVN Portsmouth decisions reached at Yalta Russia cedes the conference, the USSR takes southern part of Sakhalin to Japan control over Sakhalin and all Sakhalin the Kuril Islands. Japan after the Russo – Kuril Islands accepts the Potsdam Japanese War Declaration that limits the ȡ Japanese sovereignty to the islands of Honshu, Hokkaido, Kyushu, Shikoku, and minor 3DFLʳF2FHDQ islands which to be 3DFLʳF2FHDQ determined
1951 1956
The Treaty of San Francisco Soviet – Japanese Joint Declaration of 1956 9ULHV6WUDLW Japan gives up all the claims The end of the ‘state of war’ and the restoration of diplomatic relations RQWKH.XULO,VODQGV WHUULWRULHV between the countries. The parties agreed to continue negotiations for a QRWVSHFLʳHG EXWWKH7UHDW\ QRW 6WUDLW&DWKHULQH peace treaty. The USSR ‘taking into consideration the interest of the signed by the USSR) does not Japanese State’ agrees to transfer to Japan the Habomai Islands and recognise the Soviet Union’s Shikotan Shikotan after the conclusion of a peace treaty. However, the USA claimed sovereignty over the Islands that they refuse to return Okinawa to Japan in this case. Japan demanded +RNNDLGR Habomai all the southern islands. As the result, the peace treaty was not signed
4 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
STRATEGIC AND ECONOMIC IMPORTANCE OF THE SOUTHERN KURIL ISLANDS Economic potential
The unique rhenium deposit (a metal used )LVKHU\DQGˉVKSURFHVVLQJ Gold and silver in high-performance rocket engines) (the major industry for the islands) deposits
Polymetal ore Geothermal power Recreational resources Airports
Armed forces Strategic Importance of the region 18th Machinegun Artillery Division (military personnel – 3,500) Control over passages to the Sea of Okhotsk Divisional Air Defence Border Headquarters Systems Troops Access to marine resources
Area 3319 km2 Population 5561 (2017) Russia
Kurilsk Iturup Sea of Okhotsk Japan Goryachiye Klyuchi 49th Machinegun Artillery Regiment
Area 1495 km2 Population ɘ 46th Machinegun Artillery Regiment
Kunashir 3DFLˉF2FHDQ
Yuzhno-Kurilsk Area 264 km2 Population ɘ Shikotan
Japan Habomai
Area 96 km2 Hokkaido Population none
Source: RIA Novosti, Institute for Complex Strategic Studies, Sakhalinstat, open sources.
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 5 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
ministers, and to establish regular contacts of Economy, Trade, and Industry Hiroshige Seko between their Defense Departments. In response to the position, tasking him with stimulating to a query from Japan, Russia signaled that it Japanese businesses to develop specifi c projects was open to discussing the territorial issue and with Russia. During his visit to Japan in December was committed to the wording of the Soviet- 2016, Vladimir Putin brought an agreement Japanese Joint Declaration of 1956. According to begin consultation on joint economic activities to that document, the Soviet Union, as a goodwill on the disputed Kuril Islands without prejudice gesture, agreed to “transfer” the Habomai Islands to either side’s position on the peace treaty, and group and Shikotan Island to Japan after the two granting Japanese former residents of the islands countries concluded a peace treaty. The Ukrainian freedom to visit the graves of their ancestors crisis and Japan’s support of Western sanctions on the Southern Kurils. Prime Minister Abe caused a brief interruption to those nascent made a working visit to Moscow in April 2017 efforts to resolve the peace treaty issue. that focused on the systematic implementation During their meeting in Sochi in May 2016, of previously reached agreements. The Foreign Japanese Prime Minister Abe offered to President Ministries of the two countries began consulting Putin a ‘new approach’ to the territorial issue that on the issue and, for the fi rst time, a delegation would be unhindered by past ideas. Abe moderated of Japanese businessmen and officials visited Japan’s position from demanding “all four islands the Southern Kurils in June 2017 to identify in a batch” to a more fl exible solution. This could specifi c projects and prospects for joint economic imply that Japan is once more looking into a ‘two activities. The parties approved a Joint Action plus alpha’ formula that entailed, in addition Plan and a major list of 80 high priority bilateral to the return of Shikotan Island and the Habomai economic projects. Island group – territories that Japan argues Russia and Japan have different the Soviet Union had already promised to return – expectations regarding the signing of a peace continued negotiations on the status of two other treaty. Shinzo Abe insists that the issue be resolved islands, Iturup and Kunashir. Abe also outlined during his term in offi ce. And, since it seems his an 8-point plan for Japanese-Russian economic political prospects do not extend beyond 2021, that cooperation that includes the development means Tokyo is allowing 4-5 years for the process of urban infrastructure, the creation of “smart of rapprochement. Russia recommends taking cities,” healthcare, development of small- and a longer-term approach. President Putin offered medium-sized business, energy, industry, the experience of settling territorial disputes advanced technology and innovation, joint with China along the Amur River as a working development of the Far East, as well as an example. That process lasted approximately 10 increase in humanitarian exchanges. During his years. The Russian President emphasized the need September 2016 visit to the Eastern Economic to create an atmosphere of trust and cooperation Forum in Vladivostok, Abe invited President Putin between the countries, and to normalize their to work together to develop the Far East, advance political dialogue as a prerequisite to resolving cooperation along the eight-point agenda, and territorial issues. This goal should be underpinned to attend the Eastern Economic Forum every year. by reaching agreement on joint economic activities The Prime Minister even created a post unique for on the southern Kuril Islands, developing the Japanese government – Minister for Economic economic cooperation between the countries, and Cooperation with Russia – and appointed Minister normalizing the political dialogue.
6 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
3. Factors Influencing Russian-Japanese Rapprochement
1) The Window of Opportunities with regard to the right to collective self-defense Resulting from the Confluence and permitting Japan’s Self-Defense Forces of the Domestic, Bilateral, and to act with greater force on a broader scale. International Agendas Improving relations with Russia is apparently one of the logical expressions of this strategy The current international situation opens because it would strengthen Japan’s position up an important window of opportunity for in the balance of powers in East Asia and make Russian-Japanese relations. In the coming years, Japanese foreign policy more autonomous. Thus, both countries will have leaders who are interested there is a favorable confl uence of domestic political in developing that dialogue. Prime Minister Abe factors, the bilateral agenda, and conditions would like to fi nalize the outcome of World War in the international arena. II and go down in history as the politician who Moscow considers the absence resolved a key territorial dispute. The fact that of a peace treaty with Japan an anachronism and Prime Minister Shinzo Abe’s father Shintaro Abe the development of economic ties with Tokyo had served as Japanese Foreign Minister and a natural priority. And, although Russia is sincere advocated improving relations with the Soviet in its commitment to the phrasing contained Union and the laying of a groundwork for their in the Soviet-Japanese Joint Declaration of 1956 normalization also plays a role. President Putin concerning the transfer of the two islands, it would like to resolve all key border disputes with imposes a number of conditions on the realization neighboring countries. The West’s extension of this scenario. Russia makes it clear that it of economic sanctions against Russia gives will not compromise under pressure, but agrees Moscow even more reason to search for economic to make certain concessions as part of a larger partners in Asia. The continuing revamping process of improving bilateral relations. Moscow’s of the administration of U.S. President Donald first condition is to create an atmosphere Trump reduces Washington’s attention towards its of trust that would prevent the politicization allies and provides them with a brief opportunity of the islands issue. However, a major expansion to exercise greater independence in international in economic cooperation would have to serve as affairs. If this state of affairs remains unchanged, it the foundation of such a process. Russia thinks means that, during the tenure of Donald Trump – highly of the Japanese proposal designating eight unlike that of the previous administration – Japan areas of economic cooperation and focusing will not face U.S. opposition for improving largely on investment by Japanese companies its relations with Russia. There is a reason in the Russian Far East. Moscow has also noted to believe that such an approach corresponds that, by announcing a programme of economic with the strategy of the Japanese prime minister cooperation with Russia, Tokyo is effectively who, while continuing to rely on the U.S.-Japanese withdrawing its support for sanctions and risks alliance, also seeks to preserve and strengthen becoming the object of criticism by its G7 partners. Japan’s role as one of the key leaders and power The possibility of carrying out joint centers in the region. The desire to reinforce economic activities on the southern Kuril Japan’s role as a leading power in East Asia Islands offers the greatest promise as it would can also be seen in Abe’s effort to gradually shift that issue into the context of cooperation remove post-war national security restrictions – and create a qualitatively different atmosphere in particular, by reinterpreting the Constitution for bilateral contacts.
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 7 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
2) Japan’s Desire to Prevent Russian- In this context and in view of Japan’s geopolitical Chinese Rapprochement Based goals, its rapprochement with Russia is both logical on Anti-Japanese Grounds and justifi ed, and would enable Japan to improve security on its northern fl ank and free it to focus For Japan, the issue of improving relations efforts in other areas, particularly the southwest. with Russia goes beyond the territorial dispute over the Kuril Islands. Tokyo is concerned about China’s increasingly assertive attitude in regional 3) Common Interest in Cooperating affairs and the escalating territorial dispute on Security Issues on the Korean over the Senkaku / Diaoyu Islands – a situation Peninsula that Japan increasingly views as a key security threat. In parallel with its negotiations with Japan is very interested in cooperating with Moscow, the Japanese leadership is attempting Russia to stabilize the situation on the Korean to form a network of regional cooperation as peninsula and values the working contacts Russia a counterbalance to Beijing. In particular, Japan holds with North Korea that enable Moscow is forming signifi cantly stronger ties with India, to maintain a political dialogue with Pyongyang. Australia, the ASEAN countries, and other Asia- Tokyo is deeply concerned about North Korea’s Pacific region countries. Japan is uneasy over independent nuclear missile programme and the political and security-related cooperation considers it a key threat to Japan’s security. between Russia and China that has deepened North Korea might manage to develop new over the past three years. In particular, Tokyo delivery systems capable of overcoming elements is concerned about Russia being noticeably of the U.S. missile defense system and quickly critical of U.S. actions in the region, its reaching Japanese territory. Here, Moscow and deployment of a regional missile defense system Beijing could act as intermediaries in establishing as part of a global system and naming the system a dialogue with this dangerous neighbor. Shinzo of U.S. alliances as the one that seeks to achieve Abe has repeatedly spoken of the importance military superiority while ensuring its security of Russia’s role in dealing with North Korea. at the expense of other states’ security. Overall, Russia’s position calls for the denuclearization Japan would like to see Russia act at least as of the Korean peninsula as an ultimate goal a neutral observer in the Japanese-U.S. confl ict and a ‘double freeze’ in the near future of North with China and hopes to prevent the ‘nightmare’ Korea’s nuclear missile programme in tandem scenario of a Russian-Chinese rapprochement with the suspension of large-scale military based on anti-Japanese grounds. Japan does not maneuvers by the U.S. and South Korea. Russia see Russia as a major potential military threat, advocates a peaceful resolution to the issue but it is concerned about Russia modernizing its of North Korea’s nuclear missile programme military forces on the Kuril Islands and Russian- through the resumption of six-party talks that Chinese rapprochement on security matters have a place for all interested parties, including leading to joint maneuvers in the region, such Russia and Japan. New opportunities in this regard as in the Sea of Japan or in Japan’s exclusive have arisen with the coming to power of liberal economic zone, particularly but not exceptionally South Korean President Moon Jae-in, who favors emergence of Russian and Chinese warships a restoration of dialogue with Pyongyang and in the vicinity of the Senkaku / Diaoyu Islands. expanded cooperation with Russia.
8 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
4) Both Countries’ Interest potential that remains untapped. Japanese in Economic Cooperation, Primarily businesspeople with long years of experience in the Russian Far East in this country remain interested in the Russian market, and a signifi cant number of them plan Japan is also interested in Russia as an to expand their businesses. The purposeful economic partner and as a source of resources. policy that Abe’s cabinet pursues has resulted Russia is not currently one of Japan’s key in a noticable increase in new economic contacts economic partners and Tokyo recognizes that with Russia. For its part, Russia is interested Russian-Japanese economic cooperation holds in Japanese investments, technologies, and
JAPANESE PUBLIC OPINION ABOUT FOREIGN COUNTRIES, 2016
Russia China United States
Japanese opinion about: )HHODIˉQLW\ 'RQRWIHHODIˉQLW\
19.3% 16.8% 13.2% 84.1%
76.9% 80.5%
Current relations are: *RRG 1RW*RRG
27.8% 12.5% 9.8% 87.1%
65.2% 83%
The future development of relations is: ,PSRUWDQW 1RWLPSRUWDQW
2.5% 77% 72.9% 95% 18.3% 15.1%
6RXUFH 3XEOLF5HODWLRQV2IˉFH&DELQHW2IˉFHWKH*RYHUQPHQWRI-DSDQ1RYHPEHU
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 9 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
innovations, Japanese participation in energy social standards, and contributing to economic projects, the creation of joint ventures with development through the subsequent transfer high added value, and especially in Japan’s of technology and the development of human participation in the development of the Russian potential. At the G7 summit in May 2016, Prime Far East. Minister Abe announced “Expanded Partnership for Russia has declared the development of its Quality Infrastructure” with the global expansion Far Eastern territory as a key priority for the 21st of this initiative and the allocation of funding century. The government has created a number totaling $200 billion over fi ve years. Russia is one of mechanisms to achieve this goal: the Ministry of the countries to be included in the expanded for the Development of the Russian Far East, form of this initiative – that also interprets 18 advanced special economic zones (ASEZs), infrastructure more broadly to include energy and and special free port regime for Vladivostok and resources. Furthermore, despite its growing level four other Far Eastern ports. All ASEZs enjoy of activity, China cannot singlehandedly assist a special legal regime of doing business with large- Russia in the near future to achieve the degree scale tax and administrative preferences, while of technological modernization it is seeking for a free port regime entails special customs, tax the Far East. Thus, Japan and Russia share a clear and administrative regulation. Russia views Japan convergent interest in economic cooperation. as one of the key foreign partners in the further The prospect of Japanese investment in the context realization of these projects. Japan put forward of Russia’s modernization and the development ”Partnership for Quality Infrastructure” in Asia of the Far East, as well as plans to expand overall in 2015, and allocated $110 billion in fi nancing. economic cooperation between the two countries Japan positions its initiative as cost-effective, not strikes Moscow as attractive and as clearly overly expensive, safe, meeting high ecological and answering Russia’s interests.
FOREIGN DIRECT INVESTMENTS (FDI) IN ASEZs
,QYHVWPHQWV ȷEQ
150 3 140 2.7 120 2.5 2 90 1.8 60 1 30 0.7 10.6 0 0 China Australia Japan Singapore Kazakhstan Italy
*according to the applications
Source: Far East Development Corporation.
10 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
5) Russia’s Desire to Diversify Relations organizations as the East Asia Summit, APEC, with Regional Partners in East Asia as and ASEAN Regional Forum. Russia also deems Part of its Pivot to the East it important that Japan should pursue its own national interests and independent policy Russia, in turn, seeks to preserve in East Asia and global affairs without regard the independence of its foreign policy and to the position of its military and political ally, strengthen its presence in the Asia-Pacifi c region the United States. as an independent player, even while maintaining In addition to economic cooperation, a close relationship with China based on mutual trust-based partnerships require improved trust. Russia does not want to take sides relations on political issues and security. in the territorial dispute in the South China Sea. The example of a number of East Asian It advocates a resolution to the confl ict based countries that cooperate closely economically on international law and the UN Convention and are highly interdependent, but that have on the Law of the Sea, but opposes U.S. efforts nonetheless seen a serious deterioration in their to pressure China and the internationalization political relations and worsening security of the dispute. Russia also takes a neutral conflicts shows that international political position on the territorial dispute in the East cooperation and the coordination of national China Sea. If its pivot to the East to succeed, interests is just as important. Russian-Japanese it is important that Moscow improve relations relations were already moving in a positive with Japan, one of the leading powers in East direction in 2013, and are now resuming this Asia. Both Russia and Japan can strengthen their trend. Russia is seeking to raise those relations regional standing by cooperating on key security, to a strategic level and to protect the results political, and economic issues in the region, and already achieved from the infl uence of purely by coordinating more actively in such regional political factors.
JAPANESE FDI IN RUSSIA, 2005 – 2016 ($ MLN)
800 757
700
600 507 500 391 381 400 350 447 306 300 339 211 200 160 95 99 100
0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: JETRO.
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 11 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
FOREIGN TRADE PARTNERS, 2016 ($ BN)
Russia Japan
1 China 66.1 1 China 270.3 2 Germany 40.7 2 United States 197.4 3 Netherlands 32.3
4 United States 20.3 3 South Korea 71.2 5 Italy 19.8 6 Japan 16.1 4 Taiwan 62.3 7 Turkey 15.8 5 Thailand 47.5 8 South Korea 15.1
9 France 13.3 6 Australia 44.7 10 Poland 13.1 Other 218.6
15 Russia 16.4 Source: Federal Customs Service of the Russian Federation, Japan External Trade Organization. (1.6% of total trade turnover)
4. Limitations of Russian-Japanese Rapprochement
1) Without a Strong institutional and Societal Foundation, the Desire the Prime Minister’s views. A similar situation exists among Moscow’s ruling elite, few of whom of Leaders Alone is not Enough see Tokyo as a political heavyweight, even Several factors might complicate this while President Putin is willing to undertake emerging trend. Japan’s programme for efforts to improve bilateral relations. The fact improved relations with Russia is the brainchild that responsibility for improving relations is so of Prime Minister Abe, who has developed concentrated on the two leaders themselves a trust-based relationship with President Putin. brings with it serious risks and inconveniences. Abe devotes a great deal of attention to foreign Without broad support from the political elite policy and has visited more than 90 countries or public opinion, the Japanese Prime Minister in the last four years. If Prime Minister Abe’s pays a high political price for his political course political position weakens or he leaves offi ce, it with Russia, with the result that he might one could threaten the positive momentum he has day weaken his support for it. created with Russia. The Japanese elite focus Russian and Japanese public opinion mainly on the U.S., and many of those elite could also prove inhibiting factors. Both in the Liberal Democratic Party and Foreign societies would inevitably view a compromise Ministry – that they head – do not share concerning the Kuril Islands through the prism
12 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
of the memory of World War II and its outcome. regarding the ‘northern territories’ have long As a successor to the Soviet Union that been politicized, played a role in the domestic was a victorious state in the WWII, Russia political struggle, and fueled nationalists. considers the Kuril issue settled and objects As a result, a perception of Soviet aggression to historical revisionism. If Moscow were has taken hold in Japanese society, along with to transfer two of the four islands in accordance a demand for the return of ancestral territories. with the Declaration of 1956, Russians could Japanese public opinion is generally negative perceive it as a betrayal of national interests. toward Russia. Only adding to that impression, According to opinion polls conducted in August the Russian president has repeatedly said that 2016, a majority of Russians (78%) would not the 1956 Declaration contained no provisions agree to any territorial concessions with Japan. specifying on which terms the “transfer” The Japanese public also opposes all half- of the islands would take place, the nature hearted compromises on the Kuril Islands issue of this “transfer,” and under whose sovereignty and would view them as a sign of weakness the islands would be placed. The Japanese media in their leaders. Although more than half constantly aggravates the problem by promoting of Japanese favor some form of compromise, any a negative image of Russia and creating infl ated Japanese Prime Minister who settles for just two expectations about resolving the territorial islands would be committing political suicide. dispute on Japanese terms. This only leads In fact, the idea of the ‘northern territories’ – to disappointment and makes it impossible as the islands are known in Japan – has become to create a positive image of progress in relations an important national symbol: stereotypes between the two countries.
RUSSIAN PUBLIC OPINION ON THE KURIL ISLANDS DISPUTE
How should this problem be solved? As of May, 2016
None of the islands should be given away 56%
Two of four islands can be returned: Habomai and Shikotan (all the better that they won’t give Japan access to the Sea of Okhotsk) 9%
These four islands should be the joint property of Russia and Japan 8%
All four islands should be returned 4%
All four islands should be returned at some time in the future when it is appropriate 4%
Other 1% ,WLVGLIˉFXOWWRVD\18%
Source: Levada-Centre.
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 13 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
2) External Inhibiting Factors: relationship is based on shared international the U.S.–Japan Alliance and China’s and political interests, common approaches Strategic Partnership with Russia to resolving global problems, and similar positions on the formation of a polycentric world A number of factors could serve as order. Japan cannot count on Russia taking an additional “spoilers” to improving relations anti-Chinese position any more than Russia between Russia and Japan. First, the emerging could seriously expect Japan to side against positive trend faces a signifi cant number of very the U.S. infl uential opponents in both countries. Second, Russian-Japanese rapprochement cannot but arouse the interest and apprehension of other 3) Russia’s Challenging Business regional players, especially China. Environment and Difficulties Finally, with Russian and the West in Implementing Full-Scale Economic locked in confrontation, Japan cannot ignore Cooperation the position of other G7 countries, primarily that of its ally, the United States. Although Western Russia and Japan do not consider each countries realize that Japan has special interests other key economic partners. Japan has always in relation to Russia, they often require Tokyo viewed economic relations with Russia as holding to show solidarity, with Washington usually only secondary importance, and has made applying the most pressure on the issue. Hopes full-scale expansion of economic cooperation continue to wane that Washington and Moscow dependent on a resolution of territorial disputes. will enter a new period of improved relations. Russia is much more interested in expanding However, Washington has already applied economic relations with Japan. Tokyo is willing less pressure on Japan than the previous U.S. to signifi cantly intensify economic contacts based administration. Trump’s current foreign policy on its eight-point plan, but will implement only stance suggests that U.S. allies should take those projects that Japanese businesspeople deem greater responsibility for their own security economically viable. and assume more autonomy, thus giving Japan Structural problems in the Russian a free hand in improving relations with Moscow. economy and system of governance – However, that trend could reverse if Russian-U.S. especially the high degree of bureaucratization, relations break down again or in case of staffi ng irregularities in the legal system, and law changes in the U.S. administration. If Chinese- enforcement practices – could become Japanese relations deteriorate or the situation obstacles to expanding Russian-Japanese on the Korean peninsula heats up, Japan will cooperation. Japanese businesspeople point want security guarantees from the U.S. – and to the unattractive business climate in Russia that, in such circumstances, would be of greater and single out such problems as bureaucratic importance to Tokyo than its relations with barriers, the opaque nature of decision- Moscow. Japan would not put its alliance with making, frequent changes in the rules of doing the U.S. at risk for the sake of establishing business, the tax and accounting systems, contacts with Moscow. vague rules for doing business in many Similarly, Russia places a high priority sectors, the lack of transparency, the amount on its strategic partnership with China. That of time required for the export and import
14 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
of goods, customs clearance, sudden changes in response to Western sanctions. This practice in the classifi cation of goods or import duties, has led to the production of lower quality the need to submit voluminous documentation goods, particularly in the oil and gas sector. to certify each individual product on an The Western sanctions against Russia and occasional basis, corruption, the diffi culty and the volatile ruble exchange rate are also cited time involved in obtaining approval for as factors negatively affecting the business projects, difficulties in financing Russian climate. companies, the underdeveloped transport Local authorities on the Kuril Islands and and logistics infrastructure, and the shortage in Sakhalin, Primorsky Krai, and Kamchatka of information on contractors and qualified often see no concrete benefits for their experts with knowledge of the language and regions from these economic initiatives, and the ins and outs of doing business in Russia. instead view them more as problems than as Another matter of concern to the Japanese opportunities. To this day, Russia’s reputation business community is Russia’s policy suffers from several unpleasant incidents of import substitution that Moscow launched concerning property owned by Japanese
CHALLENGES FOR JAPANESE BUSINESS IN RUSSIA, 2016
Related to... Number of responses 0102030405060
Legal system 53
Executive branch and law enforcement practice 52
Export/Import procedures 47
Tax system and accounting standards 31
0RQHWDU\SROLF\DQGʳQDQFLDOV\VWHP 23
Tariff policy 23
Financing of Russian companies 23
Infrastructure 20
Regulations on foreign staff 17
Industrial policy 17
Political situation and security 16
Information 16
FDI promotion policy 10
Labour regulations 8
Judicial system 3
Others 23
Source: Japan Business Federation (Keidanren).
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 15 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
businesspeople that occurred in the Far East Russia is attempting to secure large-scale in the 1990s. Japanese businessmen argue that Japanese investment and carry out major the signed memorandums will become full- projects, whereas Japan is cautious and, given fl edged agreements and only be implemented the challenges of the business climate, prefers on the condition that Russia create favorable launching a number of smaller pilot projects conditions for Japanese businesses. whose success could pave the way for more The current phase of interaction largely consists ambitious investment later. The Japanese of establishing contacts, creating mechanisms prime minister would have difficulty selling for deepening them, and the search for projects large-scale projects with Russia to his people that are attractive for businesses in both given the prevailing negative perception countries. For the agreement to be implemented, of the country and the current low level the Russian side needs to improve the business of economic cooperation. climate and conditions for Japanese investors. However, it takes a great deal of time At the same time, the difference to build trust between the two countries and in the economic potentials of the two achieve qualitatively better relations. Most countries inevitably narrows the possibilities of the Japanese companies that have no plans for forming a mutually benefi cial partnership. to do business in Russia see the Russian In 2015 and 2016, the volume of Russian- market as unpromising due to the condition Japanese trade dropped from 2014 levels by of its economy in 2014-2016 and the resultant 30% and 25% respectively, but rebounded by decline in economic attractiveness. Prime 25% over the previous year in the fi rst quarter Minister Abe’s Cabinet is currently pushing of 2017. Lacking comprehensive economic Japanese companies to establish economic interdependence, Russian-Japanese trade contacts with Russia. Many Japanese companies stands on a fragile foundation that could and conglomerates are only beginning to enter collapse quickly due to political or economic the Russian market and show an interest in this causes. Oil and gas make up approximately direction. Although the success of those projects 70% of Russian exports to Japan, and Japanese depends largely on the policy of the Japanese automobiles account for 50% of imports. government, even more depends on the ability If mutual trade declines, both Moscow and Tokyo of the Russian authorities to provide a favorable can compensate for the loss by relying on other business environment. This applies particularly trading partners and markets. Japan has a policy to the Far East where signifi cant effort is needed of diversifying its energy imports and does not to implement existing agreements and want any one country to become the dominant secure the participation of Japanese business energy supplier. For this reason, the political in the Advanced special economic zones (ASEZs) leadership in both countries may place a lower and the development of free ports. value on bilateral cooperation. In addition, Japan In addition, the small size of the Far is interested among other things in selling its East’s domestic market makes it impossible finished products in Russia, whereas Russia for Japanese businesses to carry out major would most like to obtain Japanese investments investments with the fi nal products consumed and projects that would subsequently remain in the Far Eastern Federal District. Japan on Russian territory and contribute to national would have to transport those goods to either development and the creation of jobs. Moreover, the European part of Russia where much
16 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
of the country’s consumption is concentrated, “two plus alpha.” Prime Minister Abe initiated or export them to the Asia-Pacifi c region. That a shift in Japanese policy: whereas resolution makes for a difficult process of identifying of the territorial dispute on Tokyo’s terms was the specifi c niches in which Russian products previously a prerequisite to the large-scale would be competitive in the region. expansion of economic cooperation with Russia, now the targeted development of economic contacts with Russia serves as an incentive for 4) Japan’s Linking of Economic Moscow to take a more conciliatory position Cooperation with the Territorial Dispute regarding the disputed territories. However, either Resolution is Unacceptable for Russia way, Abe maintains the same goal of resolving the territorial dispute – an approach that Russia has never been a foreign economic remains unacceptable for Russia. President Putin priority for Japanese business. The economic has repeatedly responded to such suggestions problems mentioned above have made by stating that Russia does not bargain over doing business in Russia extremely risky territories. The Russian leadership considers in the eyes of Japanese businesspeople. What’s Japan itself important and has an interest more, economic cooperation between the two in developing economic, humanitarian, political, countries in areas other than energy and auto and even military relations with Tokyo. However, manufacturing remains on a very modest scale. Russia is not willing to link these questions Moreover, an unoffi cial linkage exists between with any preconditions from the Japanese side. the possible large-scale expansion of economic Russia looks favorably on the positive dynamic cooperation and Japanese investment with in relations between the two countries, efforts a resolution of the territorial issue in a form to take them to a new level and to conclude that the main political forces in Tokyo find a peace treaty and implement Shinzo Abe’s eight- acceptable – namely, the return of all four point plan for improving economic cooperation, islands at once, or according to the formula but that in no way implies that Moscow
RUSSIA – JAPAN TRADE TURNOVER, 1996 – 2016 ($ BN)
35,000 29.7 30.7 30,000 28.9 33.2 31.2 25,000 23.1 20.1 21.3 20,000 16.1 15,000 12.2 9.6 14.5 10,000 7.3 3.9 3.9 3.3 4.3 5,000 3.0 2.6 3.2 2.8 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Federal Customs Service of the Russian Federation.
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 17 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
RUSSIA – JAPAN TRADE IN 2016 Turnover – $16.1 bn Exports to Japan Imports from Japan
$9.4 bn $6.7 bn Export Structure
75.41 Mineral products The biggest increaseas compared to 2015 ($ mln)
Wood products 54.4 10.13 Metals
Cereals 39.6 Wood products 4.38 and paper goods The largest decrease as compared to 2015 ($ mln) % Food and agricultural 4,969 3.62 commodities Crude petroleum and petroleum products
2.99 Machinery and vehicles Vessels 124.8
Inorganic chemicals 79.7 2.75 Precious metals Aluminium 52.6 0.66 Chemical products Rubbers 29.1
Import Structure
80.02 Machinery and vehicles The biggest increase as compared to 2015 ($ mln) 169.7 Vehicles 11.32 Chemical products % Vessels 52.8
2.71 Metals The largest decrease as compared to 2015 ($ mln) 167.4 Nuclear reactors 1.16 Textiles and equipment
Iron and steel 72.7 4.79 Others Plastics 51.2
Iron and steel products 35
Rubbers 34.7
Non-precious metals products 24.6
Source: http://russian-trade.com/reports-and- reviews/2017-02/torgovlya-mezhdu- Photo and video equipment 23.8 rossiey-i-yaponiey-v-2016-g/.
18 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
is abandoning its position on the territorial issue. reaching a solution on the territorial issue. The threat of making that issue the top priority In that case, Russia would continue developing could neutralize much of the progress already the islands itself, but it would have lost an achieved in other areas. opportunity for cooperation with Japan.
5) The Difficulty of Formulating 6) Russian-Japanese Disagreements a Legal Framework for Joint Economic on Security Issues, over the U.S. Activities on the Southern Kuril Islands Positioning Elements of its Missile Defense System in the Region, and The most difficult aspect of reaching an agreement on joint economic activities North Korea’s Missile and Nuclear in the South Kurils is establishing the legal Programme framework for its implementation. The Russian Finally, the last but not least important side believes that work should proceed based challenge is the ability of Moscow and Tokyo on Russian law and with the introduction to build a constructive dialogue on global and of special rules such as those governing ASEZs. regional political issues. Although Russia and In August 2017 a South Kurils ASEZ was created Japan are restoring their relations on political to stimulate the development of the islands and security issues, a number of irritants and projects for modernizing production, and on the regional level remain. Japan is concerned attract Russian and foreign investment toward over Russian steps to position missile systems that goal. The Japanese side argues that it and military divisions on the Kuril Islands, while is necessary to create a special international Russia objects to the placement of the BMD legal regime for activities that would not be in Japan, the U.S. THAAD system in South accountable to Russian law (up to and including Korea, and the possible placement of a similar the condominium principle) and thus would system in Japan. Moscow considers such moves not fall under Russian jurisdiction and would a violation of the strategic balance in the Asia- not imply Russian sovereignty. Japan is anxious Pacifi c region and a disproportionate response about the creation of the ASEZ because to the actions of North Korea. participation of japanease businesses could Although both sides agree that North mean acknowledgment of Russian jurisdiction. Korea must comply with UN resolutions, Moreover, Japan is anxious about the possibility Russia is critical of the bloc approach that Russia would attract investment to regional security and insists on the need in the Kurils from China and South Korea, and for collective action. Russia also criticizes this factor could adversely affect the possibilities Pyongyang’s provocative missile and nuclear for Russian-Japanese cooperation. Russia and activities, but Moscow and Tokyo take different Japan have yet to fi nd a mutually acceptable positions on the overall approach to security approach for cooperating on the South Kurils. At on the Korean peninsula. Whereas President the same time, if they fail to fi nd a way to pursue Putin emphasizes the need to refrain from joint economic activities there, that will clearly militant rhetoric and to seek a constructive undermine the momentum for improving dialogue – particularly by renewing six-party relations and adversely affect prospects for talks – Prime Minister Abe underscores the need
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 19 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
for North Korea to uphold UN Security Council South Korea freeze or downgrade their military resolutions and halt provocative actions, and maneuvers near North Korea as a starting point for increased pressure on North Korea. Japan for negotiations. Russia considers it unacceptable believes that now is not the time to renew six- to use force to resolve the North Korean problem party talks and it participates in joint military and insists on reaching a peaceful settlement maneuvers with the U.S. as a response to North through negotiation. Russia has put forward Korea’s “provocative” missile launches. Shinzo a roadmap for peaceful resolution of the nuclear Abe stated in April 2017 that Japan would issue on the Korean Peninsula and jointly support the U.S. if it decides to take military promotes the “dual freeze” plan with China. action against North Korea. Russia, by contrast, Russia and Japan face a daunting task supports the Chinese proposal brought up if they hope to coordinate their positions in the UN Security Council that North Korea halt on the key agenda questions in the Asia-Pacifi c its nuclear and missile testing and the U.S. and region.
5. Recommendations
1) Create a Solid Economic Foundation require fi ve years to complete. The pipeline for Russian-Japanese Relations would significantly increase the volume of Russian gas shipments to Japan and At this point, the policy of strengthening create the infrastructure for Russian- Russian-Japanese relations faces the main task Japanese cooperation and the development of establishing a fi rm economic and political of neighboring regions in the two countries. foundation that can withstand potential It would provide for not only the export of raw political turbulence between the two countries. materials, but also create an economic and Although the current window of opportunity social superstructure. A second promising is certainly not the last that will ever appear, project is the construction of an energy bridge there is no way to know how soon the next will between Sakhalin and Hokkaido that would come. It is therefore imperative that Moscow enable Russia to export electricity to Japan via and Tokyo make the most of the current seabed cables. opportunity. It is important to raise Russian- Large-scale, long-term infrastructure Japanese relations to a qualitatively new projects could provide an important step level of economic cooperation that would in this direction. A good example would be include numerous projects. Increasing the construction of a gas pipeline running the number of successful projects – in addition from Sakhalin Island to Hokkaido Island, to the activities of Japanese companies that with a branch line to the Tokyo prefecture have already been working in Russia for and a total length of approximately 1,500 decades – will contribute to an even greater km. Experts estimate that the project would influx of Japanese investments. To achieve
20 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
this, it is fi rst necessary to implement plans areas, create a database and docket of Japanese for the 80 priority projects in various fi elds companies currently looking for business (such as industry, agriculture, health care, partners in Russia as well as a list of promising infrastructure, innovation, small business, Russian partners, and their size and areas and humanitarian exchanges) that would of activity – especially in the priority regions be located in different regions. In addition of Siberia and the Far East. They should hold to cooperation on energy, it is important a regular exchange of contacts, increase to carry out projects is such other sectors as the promotion of these opportunities through manufacturing, agriculture, petrochemicals, the media and business websites, create finance, medicine and pharmacology, and support English and Japanese versions information and communication technologies, of the websites of key business structures and innovations, urban infrastructure, services, relevant agencies responsible for cooperation education, transport infrastructure, and with Japan, and update the pertinent content tourism. Only systematic efforts in all areas on a regular basis. of potential cooperation and the building of close contacts between small and medium- sized businesses will create enduring ties that 2) Improve the Business Climate and could produce a new level of interaction and Create Institutionalized Mechanisms mutual understanding in general. to Support Japanese Projects It is important that Russia and Japan intensify efforts by relevant agencies and Another important area is the creation business associations in identifying common of a favorable climate for business interests and business opportunities. It development, including SMEs, especially is important to provide more information in the Far East. Japanese businesspeople regarding potential contacts between analogous should have assurance that their businesses agencies and structures in both countries. Much will be protected from changes in the rules welcomed is cooperation between Economy of doing business, differences in interpretation Ministry of Russia and Japan’s Ministry of the law, bureaucratic pressure, and crime. of Economy, Trade, and Industry, as well as That requires clear and transparent conditions between the Ministry for the Development for conducting economic activity (uniform of the Russian Far East, the Russian Direct single-window system for doing business, Investment Fund, the Japan Bank for importing and exporting goods, clearing International Cooperation, the Russian-Japanese customs, taxation, fi nancial statements, etc.) Business Council, the Japan-Russia Business and shortening the wait time for the review Cooperation Committee of the Keidanren of proposals and import-export clearance (Japan Business Federation), and other relevant procedures, primarily in the Far East. Easing agencies, as well as the holding of the Russia- the issuance of visas for Japanese citizens Japan Business Dialogue. The relevant Russian should also produce a positive effect, and there agencies will have to help the Russian business are high hopes for the effect of the introduction community, and especially small and medium of a simplified visa procedure in the free enterprises (SMEs), identify priorities for port of Vladivostok. An effective feedback cooperation with Japanese companies in key mechanism is needed to resolve any diffi culties
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 21 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
that might arise. In other words, real and with Japan – at both the federal and regional ongoing political support is necessary to ensure levels – in politics, economics, high technology effective economic cooperation. Joint Russian- and innovation, humanitarian activities, and Japanese projects need institutionalized cultural cooperation. support to succeed. The Russian-Japanese Investment Fund together witha Platform founded in April 2017 to support Japanese 3) Develop a Strategic Dialogue investment in the Far East, ASEZs, and on Issues of Politics and Security the free port of Vladivostok – and that will begin operations in the third quarter of this year – Russia and Japan should deepen their must solve the problem of co-fi nancing, assist cooperation on a wide range of global and investors in the preparation of investment regional issues. As part of their strategic proposals, and provide support for projects dialogue on issues of politics and security, during their implementation. It is important they should coordinate their positions that this work is performed in a systematic on key regional problems and integration manner and that similar mechanisms operate projects. Russia and Japan can cooperate at both the federal and regional levels. It might on key issues concerning security and the fi ght be possible to offer a preferential MFN policy against non-traditional threats and security for Japanese business partners that could challenges (bilaterally and multilaterally with include infrastructure and priority support the ASEAN countries), strengthen cooperation at for business deals. It is necessary to train and the regional level, and formulate joint initiatives. provide a professional staff with knowledge In addition to the non-proliferation of nuclear of the Japanese and English languages, as well weapons and weapons of mass destruction, it as the Japanese style of doing business, that would be worthwhile to discuss such issues as could accompany Japanese businesspeople. maintaining regional security, maritime security The strengthening of Russian- and freedom of navigation, the fight against Japanese economic cooperation must go terrorism, drug trafficking, organized crime, beyond the initiatives of the two leaders money laundering, transport security, natural and take on new institutional forms. Creating and man-made disasters (including the accident a special agency responsible for joint Russian- at the Fukushima-1), cooperation on information Japanese initiatives would probably be an and communication technologies, food security, effective solution. It would also be advisable e-commerce, education and science, and to appoint officials with influence among joint research. Dialogue in the ‘two plus two’ the political elite who would be responsible format should continue, as should confi dence- for overseeing efforts with Japan. Such a move building measures between the two would engender greater trust from the Japanese countries. The latter should include dialogue by demonstrating Moscow’s commitment between the heads of the General Staffs, visits to undertake significant efforts to improve by ships to each other’s ports, and the holding bilateral relations. The Russian-U.S. Bilateral of bilateral and multilateral exercises. The two Presidential Commission that operated in 2009- countries could also consider restoring their 2014 offers a positive example. A similar body inter-parliamentary dialogue and establishing could oversee the entire block of interactions exchanges between their respective parliaments.
22 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
4) Develop a Social Dialogue and on Russia, enabling them to create greater Cultural Cooperation awareness in both countries of the potential for Russian-Japanese relations in various The two countries can take signifi cant spheres. Increasing the volume of publications steps in the field of social dialogue and in Russia about Japan and vice versa could cultural cooperation. Russia and Japan also serve this objective, as could stepping up declared 2018 the year of cultural exchange. contacts between professionals in education Japanese culture enjoys a well-deserved and science, and holding conferences and popularity among Russians, including among seminars with a wide range of participants from youth. In turn, many images of contemporary different regions of Russia and Japan. It would and classical Russian culture are well known also be worthwhile to establish a “second track” in Japan. Humanitarian cooperation between format by creating a public council composed the two countries could create a positive of major political and public fi gures, as well as atmosphere for cooperation in the fields authoritative representatives of the business of tourism, small business, education, and community and expert circles. This could science. One area that offers promise play a constructive role in developing areas is developing tourism routes in Russia, of future cooperation with Japan. It is important especially in the Far East, and presenting them to develop student, youth, cultural, and sport to the widest possible audience in Japan. The two exchanges, and to train specialized personnel countries could provide more support to Russian as part of the humanitarian foundation for experts on Japan and Japanese experts Russian-Japanese cooperation.
6. Prospects for Russian-Japanese Rapprochement
A review of the factors helping and the current window of opportunity will not hindering Russian-Japanese rapprochement last for more than the next few years. indicates that the process is very fragile. Although it is, of course, overly Despite the fact that rapprochement optimistic to hope that the programme is in both countries’ interest, it proceeds proposed by Prime Minister Abe would be largely due to the efforts of their respective implemented fully, both countries would leaders and could be derailed at any time. derive significant economic and political The current congruence of their domestic benefits from even its partial realization. and bilateral agendas, as well as the situation Russian and Japanese public opinion, as in the world makes it imperative that they well as the imperfect Russian economic undertake concerted and systematic efforts model – particularly in the Far East – are to utilize the opportunities that now exist. the main obstacles to concluding a peace Without such efforts, rapprochement treaty and enhancing cooperation respectively. might slow and give way once again The best way to overcome them is to create to disappointment – especially because a strong foundation for economic cooperation
VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 23 THE RUSSIAN-JAPANESE RAPPROCHEMENT: OPPORTUNITIES AND LIMITATIONS
that could withstand the political vicissitudes Russia and Japan are two of the leading in Tokyo and Moscow. Creating a new context powers in East Asia, and improving relations for relations by shifting from the prevailing and building trust between the two countries focus on the problems that divide them is an important factor for strengthening to a more stable political framework, the positions of both players in the region. deepening economic interdependence, Discussion of key international political and improving their publics’ perceptions of each regional problems, a better understanding other, and pursuing a strategic dialogue of each other’s positions, and a desire on security would enable Russia and Japan to coordinate those positions are no less to put the question of a peace treaty and important than economic cooperation as the territorial dispute in a completely different prerequisites for creating relations based perspective. on trust. Improving Russian-Japanese relations The decision to conduct consultations will, on one hand, help strengthen Russia’s on joint economic activities on the South Kurils position as an independent player in the region, represents progress on this issue, especially lend greater weight to its pivot to Asia and because the Japanese side had rejected such make it more balanced, and give Japanese proposals on repeated occasions. Against foreign policy greater autonomy. On the other the backdrop of worsening security issues hand, it could make a signifi cant contribution in East Asia and territorial disputes in the East to the creation of a polycentric regional China and South China Seas, the possibility that order in which Russia and Japan would play Russia and Japan could carry out joint activities a key role – as opposed to the U.S.- and China- on the Kuril Islands could actually make centric bipolar order in which Moscow and a meaningful contribution to the strengthening Tokyo would hold far weaker positions. Even of cooperation and trust between accounting for limiting political and economic the sides and turn the Kuril Islands into a source factors in the international arena, Russia of development that would bring the countries and Japan still have great potential to build closer together, rather than pushing them apart. trust-based relations that would contribute Creating such an atmosphere of trust is the only to the development of both countries and possible way the two countries could conclude become an independent factor in international a peace treaty. relations to play a stabilizing role in East Asia.
24 VALDAI DISCUSSION CLUB REPORT, AUGUST 2017 #Valdaiclub
ValdaiClub ISBN 978-5-906757-63-0 ValdaiClub valdaiclub.com [email protected]
MGIMO UNIVERSITY