Fourth, I wonder what the balance sheet of this negotiation would look like. I don’t quite understand why Abe is pursuing this deal so eagerly. I know that almost every Japanese Prime Minister has been driven by personal ambition to solve the Northern Territory dispute. But Abe seems to be clearly overdriven.
What Russia would receive is clear if the deal is done between Abe and Putin. Kremlin will gain large economic assistance to help its weak economy, and it will score diplomatic points in the face of difficult relationship with the West. It’s ideal for Putin if he can settle the deal without substantially compromising on the territorial issue.
On the other hand, the payoff of the deal is not very clear for Abe and Japan. If Abe can recover the four islands in the coming deal with Putin, that will be fine enough. But such a successful deal will be very unlikely as I will discuss later. Return of the two islands of the Shikotan and the Habomais, occupying only seven percent of the total acreage of the four islands, will not match big economic assistance, exceeding ten billion dollars as recently reported.
When Hatoyama and Shigemitsu negotiated with Moscow in 1950s, they had clear missions. The recovery of the islands was only a part of them. Japan must resume diplomatic relation with the Soviet Union who had vetoed Japan’s entry into the United Nations. It also needed to get the Japanese soldiers in Siberia back home, and resume fishing in the northern Pacific. Japan-Soviet Joint Declaration of 1956, although lukewarm (or a failure as a result) in terms of the solution of the Northern Territories dispute, achieved at least these three goals successfully. If Japan can achieve big national interest in the fields other than the territorial issue, I believe the coming deal would be worthy of trying hard. Let us check from this stand point of view.
Will Japan gain big economic merits from investment in Russia? Frankly speaking, Russia is not a very attractive market. The size of Russian Gross Domestic Product is smaller than that of South Korea. Its economy is heavily dependent on the crude oil price, meaning it will continue to lose momentum at least in the near future. The population declined for about two decades after the collapse of the Soviet Union, and Russia will continue to suffer the demographic problem unless it increases immigration drastically.
Isn’t it good for Japan to diversify the supply source of crude oil and natural gas by investing in the Russian energy industry? Theoretically, yes. But the past behavior of the Russian government suggests that Kremlin may maneuver our energy dependence on them as a political tool for another bargaining.
Is the deal regarded as a strategic bargain for Japan? Abe claims that his new approach has “a global viewpoint” in the negotiation with Russia, implying the Japanese government wants to take advantage of the improved relationship with Moscow to check the provocation by China and/or North Korea. Russia should be also benefited by the better relationship with Japan in managing its relationship with China. The benefit of strategic bargain for Japan, however, will be subtle. For Russians, the economic gain from the rapprochement with Japan will never exceed the economic and strategic merit from the Sino-Russian entente. Economically, the share of Russian trade with China was 11.3%, whereas the share of Japan was only 3.9%. Strategically, both China and Russia need each other as long as they have tense relationship with the United States. Tokyo will never be able to separate Moscow from Beijing.
What about a peace treaty with Russia? Prime Minister Abe says the situation where Japan and Russia have not concluded a peace treaty for 67 years since the end of World War II is abnormal. Sounds it surely is. To be cool-headed, however, lack of a peace treaty with Russia causes no substantial inconvenience. Japan already has a diplomatic relationship with the Soviet Union and Russia since 1956. It’s more than a quarter century since the cold war ended, and we don’t have to worry that Russia will invade Japan. Even without a peace treaty, the Japanese government, if it wishes, can offer economic assistance to Russia as much as it wants.
These considerations cannot help making me have a bad premonition about the coming deal between Abe and Putin.