From Russia With Unrequited Love

A column internationally syndicated by Project Syndicate

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Japanese Prime Minister Shinzo Abe has assiduously courted Russian President Vladimir Putin, meeting with him more than a dozen times in four years. This month he hosted Putin in Tokyo and in his hometown of Nagato (famed for its onsen, or natural hot springs). But Abe’s courtship has so far yielded little for Japan, and much for Russia.

Abe’s diplomatic overtures to Putin are integral to his broader strategy to position Japan as a counterweight to China, and to rebalance power in Asia, where Japan, Russia, China, and India form a strategic quadrangle. Abe has already built a close relationship with India, and he sees improved relations with Russia – with which Japan never formally made peace after World War II – as the missing ingredient for a regional power equilibrium.

But Abe’s trust-building efforts with Russia are not aimed only at checking Chinese aggression. He also wants Russia to return its southernmost Kuril Islands – a resource-rich area known as the Northern Territories in Japan – which the Soviet Union seized just after the United States dropped nuclear bombs on Hiroshima and Nagasaki in August 1945. In exchange, Abe has offered economic aid, investments in Russia’s neglected Far East, and major energy deals.

Abe has, however, encountered several obstacles. For starters, Japan is a participant in the US-led sanctions that were imposed on Russia after it annexed Crimea in March 2014. These sanctions have pushed Russia closer to its traditional rival, China; and Putin has publicly identified the sanctions as a hindrance to concluding a peace treaty with Japan.

In response to Abe’s overtures, Putin has doggedly tried to drive a hard bargain. Russia has bolstered its defenses on the four disputed islands, and, just prior to this month’s summit, he told the Japanese media that the current territorial arrangement suits Russian interests. “We think that we have no territorial problems,” he said. “It’s Japan that thinks that it has a territorial problem with Russia.”

The US-led sanctions regime and low oil prices have battered the Russian economy, which is expected to contract by 0.8% in 2016. Thus, Putin is more reluctant than ever to offer territorial concessions, lest it tarnish his domestic image as a staunch defender of Russian national interests.

Against this backdrop, it is not surprising that Abe left the recent “onsen summit” with dashed hopes of resolving the territorial dispute, while Putin returned home with 68 new commercial accords. Many of the new agreements are symbolic, but some are substantive, including deals worth $2.5 billion and an agreement to set up a $1 billion bilateral-investment fund.

Under the latter agreement, Japan and Russia are supposed create a “special framework” for joint economic activities on the disputed islands. But the plan has already run into trouble. Peter Shelakhaev, a senior Russian official who leads the government’s Far East Investment and Export Agency, has indicated that there are legal hurdles to establishing such a framework, and that Japanese firms doing business on the Kurils would have to pay taxes to Russia. If Japan did that, however, it would effectively be recognizing Russia’s jurisdiction over the islands.

Abe has thus been denied the legacy that he sought, while Putin has succeeded in easing Russia’s international isolation. Abe was the first G7 leader to hold a summit with Putin after Russia annexed Crimea, and now Russia has won Japan’s economic cooperation, too.

Japan is the only G7 country that has a territorial dispute with Russia, and it is clearly more eager to reach a deal than the Kremlin is. But this has only strengthened Russia’s hand. While Japan has softened its position, and signaled that it may accept only a partial return of the islands, Russia has grown only more intransigent. After the recent summit, Abe revealed that Putin now seems to be reneging on a 1956 agreement between Japan and the Soviet Union, which stipulates that the smaller two of the four islands will be returned to Japan after a peace treaty is signed.

As it happens, this year marks the 60th anniversary of that joint declaration, which was widely viewed as a breakthrough at the time. The Kremlin is now suggesting that its commitment to fulfilling the declaration was conditional on Japan not joining any security alliance against Russia. And Putin has expressed concerns that the 1960 Japan-US Security Treaty would extend to the disputed islands if they were returned, thus allowing the US to establish a military presence there.

Japan is in no position to address Russia’s concerns. It cannot opt out of the US-led sanctions regime; and it cannot exempt the disputed Kurils from its security treaty with the US, especially now that it has been urging the US to provide an explicit commitment to defend the Japanese-controlled Senkaku Islands, over which China claims sovereignty.

Putin, for his part, appears smugly content with his negotiating position. Not only did he arrive almost three hours late to the onsen summit, in keeping with his habit of leaving foreign leaders waiting; he also declined a Japanese government gift – a male companion for his native Japanese Akita dog, which Japan gave him in 2012.

There is little hope now that Abe will see tangible returns on the political capital he has invested in cultivating Putin. And Japan’s dilemma will only deepen. US President-elect Donald Trump’s desire to improve relations with Russia may give Abe leeway to continue wooing Putin; but if Russia gets the US in its corner, it won’t need Japan anymore.

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