The Kuril Islands have been at the center of a territorial dispute since 1947 — a major barrier to a permanent peace treaty to formally end World War II and improve relations between Japan and Russia. The countries are inching closer to cooperation on the archipelago, but other issues have stymied substantial progress.
Following a five-day trip to the Southern Kurils in June by a 70-member Japanese delegation, the first since 1998, Japanese Prime Minister Shinzo Abe and Russian President Vladimir Putin discussed the delegation's talks on the sidelines of the G-20 summit on July 7. The two leaders agreed to have Japanese and Russian deputy foreign ministers meet in August to finalize joint economic projects in the Southern Kurils that may include salmon fishing, hospitality, medical care, transportation and hybrid wind-diesel power plants. Abe will then head a Japanese delegation to the third annual Eastern Economic Forum in Vladivostok on Sept. 6-7.
The 2016 Eastern Economic Forum ushered in a landmark December visit to Japan by Putin, with high hopes for a major breakthrough — particularly on the part of the Japanese. Expectations for this year's negotiations are more subdued. While Putin and Abe's meeting at the G-20 was their fourth in the last year, they have little to show for it.
Although political will for a deal is high on both sides, bigger issues have stood in the way. Japan hopes to reduce remaining friction with Russia so it can focus more on a rising China. And considering Abe's current political difficulties, a win on the Kurils would be particularly welcome. A key step in resolving the dispute would be for Japan to lift sanctions on Russia, which it has been unwilling to do because of U.S. pressure to maintain them. Russia is also pursuing Japanese investment into its flagging economy but has adopted an increasingly hardline stance.
Japan's strategy of trying to incentivize political concessions from Russia with economic sweeteners while maintaining sanctions is a difficult balancing act. Over time, Japan would like to move toward joint administration of the islands, after first engaging in initial projects that allow cooperation without Japan officially acknowledging Russia's sovereignty over them. But due to the Kremlin's position on territorial integrity in the years since the annexation of Crimea, Russia is unwilling to cede territory.
The recent tensions between U.S. allies in the Pacific and Russia over North Korea could spell a further hardening of the Russian stance. Defense and foreign ministers from both countries resumed dialogue in March, with Japan voicing concern about Russia’s militarization of the Kurils. Little progress was made during an April visit by Abe to Russia, and in June, Putin said Russia should beef up its defenses in the Kurils following U.S. buildups elsewhere. Putin specifically noted his concerns that any concessions now in the Southern Kurils could lead to an extension of U.S. military basing or missile defense in the future.
Russia and China have also become closer as they work to deepen their mutual economic ties and coordinate on North Korea. Both have said that the withdrawal of Terminal High Altitude Area Defense (THAAD) missile systems and a halt to U.S. military exercises with South Korea is a must for progress to be made on North Korea. With tough negotiations ahead over sanctions on North Korea, the Southern Kurils dispute will face further friction. But even as China and Russia become increasingly close and the United States pushes a hard line on North Korea, with an eye toward the long-term regional balance, Japan will work to ensure that it does not lose ground on its dialogue with Russia.