Toward Better Japan-Russia Relations

Keikichi HONDA (Senior Fellow, Japan Center for Economic Research)

These days Russia is attracting much attention as one of the so-called BRICs and as a member of the extended Asian region, which has been growing rapidly in recent years. It is also expected to have mutually closer relations with Japan in the future as a result of the Japan-Russian summit meeting held in Tokyo late last year. At this juncture, therefore, it seems crucially important to understand the whole picture of Japan-Russia relations from the historical and geopolitical viewpoint.

First, it has been 15 years since the fall of the Soviet Union, which might be called the "lost 15 years" in the sense that not much progress has been made in Japan-Russia relations since then. And Japan could have done much during the period when the Soviet-style political system was transformed to the CIS and the Russian Federation system. It is really regrettable, instead, to have seen the stagnation of Russia’s relationship with Japan due to the difficulty of the Northern Territory issue. However, we need not look backward, but should instead consider various economic policies and diplomatic measures to make up for the lost 15 years. For example, there are a number of concrete projects that both countries can work together on regarding comprehensive regional development of the Russian Northeast, including the Four Northern islands.

Second, geopolitically Japan’s position may be compared to that of the UK, which has been wisely managing its diplomacy by positioning itself between Europe and America for the past few centuries. Japan can play various roles in building a bridge between China and the West, especially the U.S., which is concerned about the epoch-making development of the Asian giant. Among other things, Japan should play an important role of checks and balances in Asia. In this regard Japan’s recent approach to India seems a little too short-sighted, and more appropriate strategies should be formulated by taking account of the balance of power in the greater Asia region including Russia and Southeast Asian countries. It is clear that there is much room for improvement in Japan-Russia relations, and both sides are responsible for delaying such a desirable move.

In this context, an interesting fact is that Japan and Russia are rather alike in terms of population size--somewhere between 120 million and 150 million-- although this fact is not generally recognized as important at all. However, when Japan is approaching China or India as a neighbor, their population size is too vast for Japan to grasp and understand the whole picture of various issues that the neighbor might have in relation to Japan. Similarly, many of the other Asian countries are not large enough in terms of population for Japan to have mutually stable relations in the long run. Therefore, Japan and Russia might well develop mutual understandings and fruitful relationships as equal partners with similar population size.

Third, it is interesting to point out that Japan's elite group, who went to college in the 1950s, studied Marxian economics and other social and natural science textbooks published by the Moscow Academy, and was fascinated by the clarity of their logic and the seemingly workable social system of the Soviet Union. Furthermore, they loved Russian literature and music when they were students, and still possess strong nostalgia for Russian culture. It is sad to see, therefore, that such feelings seem to be gradually fading over time, and there are quite a few people in older generations who would prefer to retain and revive such emotional ties with Russia. For that purpose, official diplomatic efforts are not enough. Rather, private exchanges among citizens and business corporations are more important. In this connection we are witnessing Toyota's investment in Russia and development of mutual interest in resources such as natural gas, in hopes that such private initiative will help advance better Japan-Russia relations. Such initiatives might also revive Japan’s deep-rooted emotional ties with Russia, which could create a self-reinforcing circle to continue improving relations between the two countries.

Finally, we must mention a serious problem on the Russian side; that is, the fact that Russia is yet to transform its economic structure into one of sustainable growth of the developing economy type, although it is widely regarded as one of the rapidly emerging BRICs. While the Russian economy is benefiting from recent rises in resource prices, the ratio of its domestic investment to GDP is less than 20%, significantly lower than that of most Asian economies. Russia should make use of its vast accumulation of science and technology by transferring it from military to civilian and commercial use for the purpose of producing higher value-added goods and services. If that is done, the economy could be changed rapidly and fundamentally. Since Russia has great potential for such change, we might soon see a turning point if Russia mobilizes its potential power systematically on a market basis by cooperating with Japan without delay.