Japan-Russia Territorial Disputes: Finding a Solution

Japan and Russia have recently “agreed”, in a joint statement, that it is “abnormal” that they have not concluded a “peace treaty 67 years after the end of World War II.”1 For over six decades, Japan had been maintaining that it will “conclude a peace treaty with Russia “contingent on the resolution of the Northern Territories issues”2 – a group of islands off the coast of Hokkaido. This commitment came about at the summit level talks between Japanese Prime Minister Shinzo Abe and Russian President Vladimir Putin in Moscow on April 29, 2013. This is a great departure in Japan’s previously held stance and has rekindled hope that both the countries will conclude a peace treaty and will settle their territorial disputes.

Northern Territories are known as the Kuriles Islands in Russia and is a contested area between the two countries since the end of the World War II.3 The Soviet Union in 1956 had offered Japan to hand over two Islands (Shikotan and Habomai) and retain the remaining two (Kunashiri and Etorofu) in exchange of a peace treaty. The nationalists in Japan had opposed such a deal on the sovereignty of the islands at that time and the issue had been lingering ever since.

However, changing realities are pushing Moscow and Tokyo to settle the issue. Russia wants to develop its far east including the contested territories through foreign investment. Likewise, Japanese investors too would like to invest in the islands but have not got the state’s backing. Japan is averse to any development works on the islands and has objected to the participation of South Korean and Chinese companies on Russian bid. A mutually agreed settlement will ease Russian efforts to develop infrastructure on the territories. Secondly, following low demands of its natural gas in recession hit Europe, Russia is in search of another market. Post-Fukushima, LNG demands remain high in Japan as most of its nuclear reactors remain dormant. Russia quite clearly eyes Japanese LNG market but has to compete with the US’ shale gas, which remains a favourite option for the Japanese entrepreneurs even though transportation costs remain high.

Japan, on the other hand, faces pressure from its domestic constituencies, especially from the people who were displaced from the territories. To recall, in 1949 the Stalin regime expelled some 17000 Japanese from the contested territory while allowing the people of the Russian origin to stay on. Japan claims that Russia had seized the Northern Islands week after its surrender in World War II. The Japanese say that the average age of those displaced is now 79 years and they want both the countries to settle the issue in their life time so that they have the opportunity to go back to their homeland. Japan observes Northern Territories Day on February 7 every year4 and the former inhabitants of the islands remain on the forefront in organizing protest rallies demanding return of the islands from Russia. In fact, the Japanese establishment has also been using the displaced people as leverage to press upon Russia to resolve the territorial issue. In a protest rally on February 7, 2011 the then Prime Minister Naoto Kan termed the then Russian President Medvedev’s visit to Kunashiri, one of the contested island, as “unforgivable outrage.”5 Medvedev became the first political leader to have visited the Kunashiri Island in November 2010, in an effort to reinforce Russia’s sovereignty claim over the disputed islands. Earlier in September 2004 the Japanese Prime Minister Koizumi announced that he will “set foot” on the islands but decided to take an aerial view of the territory after criticism by Russia that Koizumi trip will complicate treaty negotiations.6

But in a changed global and regional political landscape, Russia is signaling its intention to negotiate with Japan over the islands. As soon has Putin resumed Presidency for second term he stated his readiness for a “draw”7 with Japan. During the talks with Prime Minister Abe, Putin referred to “how Moscow settled some of the disputes with other countries by equally dividing the territories in question.” The previous Medvedev administration, however, had conveyed to Japan to “accept the outcome of the World War II just like other countries have”.8 It was construed in Japan that Russia does not want to negotiate the settlement. However, the overtures by Putin hint to the fact that Russia is ready to return to the 1956 proposal of handing two islands to Japan and retaining the remaining two.

It is not yet clear whether Japan will accept Putin’s formula. The two islands, Hobomai and Shikotan, that Russia is offering to Japan is very small as compared to Kunashiri and Etorofu and constitute only 7 per cent of the entire territory in question.9 In Japan, while some sections believe that the government should not budge from its stance of regaining all the four islands, others think that Japan should settle for “two plus little extra.” Former Japanese Prime Minister Yoshiro Mori, who has been designated as an envoy to negotiate with Russia for the settlement of northern territories, surprised many when during a TV debate he drew a line claiming the first three Island facing Japan.10 (See map 1) While Japan had officially denounced former Prime Minister Yukio Hataoyama for his “two plus little extra” remark as his personal opinion, no Japanese officials have made such statement over Mori’s remark. This suggests that Japan his ready to re-think its previous stance of reclaiming all the four islands.

One of the most visible change during Prime Minister Abe’s visit to Moscow was a delegation of over a hundred Japanese entrepreneurs. Resultantly, more than 20 Memorandum of Understandings were signed in the fields of construction works, health care and agriculture which is likely to give fillip to trade ties between Russia and Japan. It must be noted that Japan has adopted a policy of Seikei Bunri (separation of politics and economics) with two of its neighbours – China and South Korea with whom it also has some unsettled territorial issues. As a result, Japan’s current bilateral trade with China is USD 309.6 billion while with South Korea it is USD 105.4 billion. With Russia, the Japanese investors, perhaps owing to the unsettled territorial issues, have not adopted a similar policy. This is evident with their trade figures. Bilateral trade between the two countries was around USD 32 billion in 2011. This figure is quite low considering Japan’s geographical proximity.

This scenario is likely to change as a number of Japanese companies have expressed a commitment to invest in Russia. But their aims are not just to secure their entrepreneurial interests; they want to gain some political objective out of it. The Japanese media quoted a Japanese official as saying “we are going to give Russia a glimpse of a list of benefits they will get if they make substantial compromises on territorial issues.”11 Similarly, in an obvious reference to resolution of territorial issue a Japanese business group noted that creation of a free trade zone and tax relief (by Russia) would be welcomed, “but there are other things we would like them to address beforehand.”12 Japan Bank for International Cooperation and the Russian Direct Investment Fund are looking to start a corpus of USD 1 billion to encourage investment in Russia13 – clearly a policy of Seikei Bunri but also hinting at the same time that Russia needs to settle the territorial issues with Japan.

The domestic constituencies in both the countries have generally been averse to any compromise on the territorial issues. It has to be seen whether or not these constituencies accept the recent deal by the political leadership of the two countries.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.

• 1. “Expanded Japan-Russia cooperation would push forward territorial talks” ( Editorial), The Asahi Shimbun, May 07,2013, available online at http://ajw.asahi.com/article/views/editorial/AJ201305070044 ( accessed May 08, 2013)
• 2. “Overview of the Issue of the Northern Territories”, Ministry of Foreign Affairs, Government of Japan, available online at http://www.mofa.go.jp/region/europe/russia/territory/overview.html ( accessed May 08, 2013).
• 3. For a historical background of Russia-Japan territorial dispute see, Shamshad A. Khan, “No Solution in Sight for Russo-Japanese Territorial dispute,” IDSA Commentary, February 24, 2011, available online at http://idsa.in/idsacomments/RussoJapaneseTerritorialDispute_ShamshaAKhan… ( accessed May 19, 2013)
• 4. On February 07, 1855 Japan and Russia had signed Shimoda Treaty delimiting their boundaries, see for details, “Japan’s Northern Territories: For A Relationship of Genuine Trust”, Ministry of Foreign Affairs, Government of Japan, available online athttp://www.mofa.go.jp/region/europe/russia/territory/pamphlet.pdf ( Accessed May 19, 2013).
• 5. Kan reveals ire at an annual rally for northern isles, The Japan Times, February 8, 2011.
• 6. “Koizumi Inspects disputed Island”, The Chosun Ilbo, September 3, 2004 available at http://english.chosun.com/site/data/html_dir/2004/09/03/2004090361007.html ( accessed May 27, 2013)
• 7. Hakamada Shigeki, “ Must not Misread the True Intention of Putin’s Statement on Northern Territories” JFIR Commentary, Japan Forum For International Relations, March 26, 2012.
• 8. Shamshad A. Khan, Op.Cit, n.3.
• 9. Total area of Habomai and Shikotan is 100 square Km and 295 square km respectively, while total area of Kunashiri and Etorofu is 1499 square Km and 3184 square Km respectively.
• 10. “Mori: Return 3 islands”, Jiji Press/ Mainichi Daily, January 11, 2013.
• 11. Reiji Yoshida, “Globe-trotting Abe has energy on the brain”, The Japan Times, April 27, 2013.
• 12. “Russia eyes Japanese investment to kick start its sluggish Far East”, The Asahi Shimbun, April 29, 2013. available online at http://ajw.asahi.com/article/economy/business/AJ201304290084 ( Accessed May 18, 2013).
• 13. “Japan, Russia to boost business ties, restart territorial talks”, Reuters, April 25, 2013.