Among the various disputes in East Asia that have garnered significant attention over the past two years, the Russia-Japanese dispute over the Kuril Islands or Northern Territories as they are known in Japan has been treated as an almost afterthought. While the potential for conflict over this dispute is minimal, it has served to complicate Russia-Japan relations. Recent actions by Moscow have angered Tokyo and while both sides wish to reach a peaceful resolution, Moscow insists that the status of the islands is not up for debate. With Russian President Putin pursuing a more active foreign policy and nationalism growing in Japan under Prime Minister Abe, a resolution to this dispute does not seem likely in the short term.
Several islands in an island chain north of Hokkaido were developed by Japanese migrants from the 18th century onward and in 1855, Russian and Japan signed the Treaty of Shimoda granting Japan the four southernmost islands in the chain. Japan maintained control of these islands until the end of World War II when they were occupied by Russia. In 1949, Russia deported all of the Japanese residents on them to Japan. Japan renounced “all right, title and claim to the Kuril Islands” in the 1951 San Francisco Peace Treaty though this was not signed by Russia nor did the Japanese recognize the southernmost four islands as part of the Kuril chain. Since then the dispute has remained unresolved and since Japan views Russia as an occupying force, neither countries have signed a peace treaty to end their World War II hostilities.
Carlson Capital's Black Diamond Arbitrage fund is up 5.77% for the first eight months of the year, including a 1.72% return for August. Last year, the fund returned 2.39% for the whole year. Q3 2021 hedge fund letters, conferences and more The fund consists of merger arbitrage mainly consisting of signed or "rate of return" Read More
Attempts at Mediation
There have been numerous attempts at settling the dispute but they have always fallen far short of what Tokyo has sought and what Moscow was willing to concede. By 2013, relations between Japan and Russia were improving and the possibility of a resolution being realized was becoming more likely. The 2014 revolution in Ukraine ended this as Russia-Japan relations suddenly thawed. Since then, Russia has taken provocative military steps in the region and has signaled its intent to retain control of the islands.
This summer marked not only the 70th anniversary of the Soviet Union’s victory against Japan in World War II and the start of its occupation of the northern territories but also a worsening of the situation. In response to Abe’s June visit to Kiev, Ukraine, Moscow announced that the construction of military facilities in the Kurils would speed up. In August, Russian Prime Minister Medvedev in a widely publicized event visited the Kuril Islands on Russia’s state Flag Day. Tokyo immediately lodged a protest against this visit which was one of many made by senior Russian government officials over the summer.
Russian Deputy Foreign Minister Igor Morgulov commented during the World War II anniversary celebrations that the territorial issues between Russia and Japan had been solved 70 years ago. Japan immediately protested these comments with Foreign Minister Fumio Kishida calling them “unacceptable” and “unproductive and false”. Later in September, Kishida travelled to Russia on a three-day visit to discuss the disputed islands. Russian Foreign Minister Sergei Lavrov though stated that the only topic to be discussed is that of a peace deal, not the status of the territories. Lavrov said, “Moving forward on this issue is possible only after we see clearly Japan’s recognition of historic realities. The work is difficult and the difference in positions is vast”.
In the past there were indications that Russia might eventually hand over the disputed territories to Japan. Now that does not seem likely as Russia is unwilling to portray the issue as one where Japan has a legitimate claim; instead all Russia wants is to reach a peace deal without a change in territory. As far as Moscow is concerned, the islands belong to Russia and if a peace deal is to be reached, Japan must recognize them as part of Russia.
High-level talks will restart October 8th in Moscow for the first time since last January. It is uncertain though what these talks will produce given Russia’s new position on the issue. Furthermore, Russia cannot afford to suddenly backtrack since such a move would be seen as weakness at a time when Moscow is actively involved in Ukraine and Syria. Japan though will not back down either as Tokyo has nothing to lose. For these reasons, this dispute will continue to live on for years to come.