SINCE the Second World War, Russia and Japan have disputed ownership of four islands in the Kuril archipelago. This has prevented them from developing closer economic ties.
Japan views the Russian occupation of the islands as illegitimate. Russia says otherwise, because Japan launched, and then lost, a war of aggression, and must accept the loss of territory as a just consequence.
However, Russian President Vladimir Putin, and Japanese prime minister Shinzo Abe may finally be settling the matter. These two nationalist hawks may cut a deal that more moderate predecessors never could.
Russia is struggling under severe US-led international sanctions, imposed in response to Moscow’s 2014 annexation of Crimea and support for armed separatists in eastern Ukraine. With commodity prices, particularly oil, in a prolonged slump, Moscow is in urgent need of investment from Japan.
Japan is less certain than before of America’s seven-decade-long security guarantee, in light of China’s increasing military forays in the South China Sea. Tokyo is also worried by American scepticism about far-flung military commitments.
So, Russia and Japan both view enhanced economic and political ties as crucial to a stable balance of power in northeast Asia, where a rising China is flexing its muscles and North Korea seems increasingly unpredictable.
Abe went before Japan’s Diet last week to proclaim: “I will resolve the territorial issue, end the abnormal situation in which no peace treaty has been concluded, even 71 years after the war, and cultivate the major possibility of Japan-Russia co-operation in areas such as the economy and energy.”
Abe would not issue such a bold statement if there was no indication that his diplomatic engagement with Putin was about to bear fruit. Last month, Putin also signalled the possibility of an agreement. “We’re not talking about some exchange or some sale,” Putin said. “We are talking about finding a solution, where neither of the parties would feel defeated or a loser.”
During the Cold War, the Kremlin considered the Kuril Islands vital to its Pacific fleet, in case of a US blockade. Any talk of territorial and political settlement with Japan would have had unacceptable implications for the military balance with the United States. But Japanese leaders were reluctant to concede the permanent loss of the Kurils, because they have lost so much territory elsewhere. Putin’s actions in Ukraine, however, may have sufficiently cemented his reputation as a conqueror that he can afford to make a limited territorial concession, in exchange for much-needed financial and political benefits.
Abe has secured his political right at home by playing a tough nationalist card on China, South Korea, and other Asian states. How might such a deal look? Russia could salve Japanese honour by returning the two smaller islets to Japan, with no strings attached. This would give Abe the political breathing room to open a formal dialogue on the two larger islands. There, sovereignty could be shared.
Russia could transfer formal ownership to Japan and receive, in exchange, a permanent, no-cost lease on its military bases. The Kremlin could thus maintain a troop presence, as a guarantee of its national security interests. Alternatively, Japan and Russia could each take one large island.
These scenarios suggest Russia’s greater willingness to compromise than some might expect. But recall that in 2010, Russia and Norway put to rest a bitter Arctic territorial dispute by simply dividing the territory equally. And that was when Russia was under far less political and economic pressure.
Moscow could also use a deal with Japan as a wedge against the US-led isolation-and-sanctions policy in which Japan has been a grudging participant.
Opening trade-and-financing links with Japan could also tip the scales for other reluctant US allies that do not want to be left out of access to the vast Russian market. Improved ties with Japan would also help Moscow extract more from its developing relationship with China, which has exploited Russia’s relative isolation to get highly favourable long-term deals on gas pipelines and regional integration.
Just as when it struck the deal with Norway in 2010, Russia could argue that it has a better way of resolving territorial disputes than the West’s coercive measures, including sanctions.
Putin insists that Russia’s annexation of Crimea was peaceful — not a shot was fired — and that it was ratified by a democratic referendum. Even the mere fact of changing the boundary line between Russia and Japan would marginally strengthen Russia’s argument that adjustments are needed to bring the de facto borders from the Soviet Union’s 1991 collapse into line with the actual distribution of population.
These arguments may ring hollow to Western ears, but will likely play well in Russia. They could give Putin the domestic political incentive he needs to cut a deal that would unlock badly needed foreign trade and investment, and ease Russia’s international isolation.