Japan's Star Fades in Russia

Michael Richardson  (Visiting Senior Research Fellow, Institute of Southeast Asian Studies in Singapore)

After the Soviet Union collapsed in 1991, it appeared that newly democratic Russia, its main successor state, and Japan might become natural economic and strategic partners. Japan was well placed to help Russia develop - especially in Siberia and other energy-rich eastern regions that need investment, industrial know-how and market outlets.

But as Russian President Vladimir Putin prepares to visit Tokyo on Sunday, it is plain that much of the potential synergy between Japan and Russia has failed to materialise. Instead, Japan's rival, China, has overcome a legacy of ideological and border disputes with its Russian neighbour to build a relationship with Moscow that has grown steadily stronger over the past few years.

At the heart of Japan's problems with Russia is the disputed Kuril Islands chain off the northeastern coast of Hokkaido. The Soviet army seized the islands, which had never previously belonged to Russia, after Japan surrendered in 1945 at the end of the second world war. The dispute has prevented Russia and Japan from signing a peace treaty formally ending hostilities.

Nationalism on both sides has intensified and, as Russia's economy has strengthened on the back of rising oil prices in recent years, it has felt less need to make concessions to Japan. Mr Putin said in September that while Russia wanted to resolve issues of contention with all its neighbours, including Japan, there was no room to manoeuvre over the disputed islands. "They are under Russian sovereignty," he declared. "This is reinforced by international law. And on this issue we are not ready to discuss anything."

The second big disappointment for Tokyo has been Russia's recent decision to give priority to China, instead of Japan, in building a multibillion-dollar pipeline to export crude oil from eastern Siberia. The project was formally presented to Russia's cabinet this month.

For a while it seemed that the promise of Japanese soft loans to help build the pipeline through Russian territory would carry the day. Tokyo wants the line to run to Nakhodka, on the Pacific coast, where the oil could be exported to Japan and other markets. But in September, Mr Putin told a group of western analysts and journalists in the Kremlin that the 2,300km pipeline would go first to China, and only later to the Pacific coast.

The construction of the line is due to begin late this year and open in November 2008. It will carry 30 million tonnes of oil, over three times the current volume of Russian oil being exported to China by rail.

Mr Putin has pledged to expand the flow to 50 million tonnes a year, or roughly 1.2 million barrels a day - and to extend the pipeline all the way to the Pacific coast - at some time in the future. But Japanese officials worry that the east Siberian fields do not have enough oil to feed both China and Japan for the long term.

Mr Putin made it clear at the Kremlin meeting why Russia was putting China ahead of Japan. He said that relations with the former had dramatically improved and that Chinese military orders were helping to sustain the Russian arms industry.

He also noted that China and Russia had resolved all their border disputes for the first time in 40 years, while Tokyo had shown intransigence over the Kuril Islands.

Mr Putin will be welcomed in Tokyo next week with full pomp and ceremony. And a joint declaration will be issued that stresses positive elements in the links between Russia and Japan. But this will not disguise the gap between what their relationship is - and what it could have been.

(Originally appeared in the November 18, 2005 issue of South China Morning Post in Hong Kong, reproduced here with permission.)