Page 1 of 3 Moscow's successful business diplomacy By Hisane Masaki
TOKYO - For Tokyo, Japan-Russia relations always seem to revolve around a
long-running territorial dispute stemming from World War II. But for Moscow -
and, not surprisingly, Japan Inc - they revolve around business.
Prime Minister Mikhail Fradkov recently made a two-day visit to Japan, the
first by a top-level Russian official since Japanese Prime Minister Shinzo Abe
took office last September. Fradkov's
visit came about 15 months after Russian President Vladimir Putin visited Tokyo
in late 2005.
As widely expected, there was no progress on the long-standing territorial row
over small islands off the northernmost main Japanese island of Hokkaido that
were seized by Soviet troops in the closing days of World War II but are still
claimed by Japan. The islands - Etorofu, Kunashiri and Shikotan islands plus
the Habomai islet group - are called the southern Kurils by Russia and the
Northern Territories by Japan.
Moscow has taken a harder line recently and showed much less enthusiasm about
breaking the stalemate over the issue, the biggest stumbling block to
concluding a peace treaty formally ending wartime hostilities.
To be sure, the territorial dispute, along with energy, was high on the agenda
for talks between Abe and Fradkov on Wednesday. But the two leaders just agreed
to continue to talk. Instead, what Fradkov apparently wanted to do most in
Tokyo was to expand economic exchanges between the two countries, especially
investment. The Russian premier seems to have gotten his way in this respect.
In addition to Industry and Energy Minister Viktor Khristenko, the Russian
delegation accompanying Fradkov on his Tokyo visit included most of the key
Russian figures involved in economic ties with Japan, including ministers in
charge of transport and information and telecommunication, the president of the
external economic bank, and the chairman of the association of industrialists
and entrepreneurs.
Abe and Fradkov agreed to promote trade and investment between the two
countries. After the summit, the two governments inked four documents to
promote economic ties by boosting Japanese investment in Russia as well as
other bilateral cooperation, including customs cooperation to fight drug and
gun trafficking. After his talks with Abe, Fradkov said, "I believe the time is
ripe for us to seriously broaden and deepen our cooperation.''
On energy, a major topic in his discussions with Fradkov, Abe called for
stepping up mutually beneficial cooperation at both the governmental and
private levels. The two leaders also agreed to start negotiations on a nuclear
cooperation agreement that, if concluded, will enable Tokyo to outsource to
Moscow uranium enrichment for recycling nuclear fuel.
Earlier the same day, Fradkov met with Canon Inc chairman Fujio Mitarai, who
concurrently serves as chairman of the Japan Business Federation (Nippon
Keidanren), Japan's biggest business lobby, and other federation officials.
Mitarai told Fradkov that Japan-Russia economic relations will further expand
once Russia is admitted to the World Trade Organization (WTO). The Japanese
business leaders asked Russia to improve its investment climate.
On Monday, 13 Japanese firms related to the energy industry, including Mitsui
& Co Ltd and Tokyo Electric Power Co, met with Khristenko - who arrived in
Tokyo a day earlier than Fradkov - and other Russian officials and confirmed
that Japan-Russia ties in the energy industry should be strengthened.
Japan, which imports almost all of its oil and natural gas, has been scrambling
to secure access to Russia's reserves to reduce its dependence on oil from the
volatile Middle East so as to ensure stable supplies, while bolstering its
nuclear-energy program.
Meanwhile, some high-profile business tie-ups were signed this week, as many
Russian business executives accompanied Fradkov. Isuzu Motors Ltd agreed with a
Russian auto maker to consider in earnest a joint-venture truck-assembly plant
in Russia and NTT Communications Corp agreed with a Russian communications firm
jointly to lay a fiber-optic network between Hokkaido and Sakhalin.
In the early 1990s, after the demise of the Soviet Union, Russia desperately
needed help from Japan - and Western industrialized nations - in turning around
the ailing economy. But now the situation has changed dramatically. The Russian
economy has been barreling ahead in recent years thanks to high prices of crude
oil, the country's main export item. Russia, which competes with Saudi Arabia
for the status of the world's biggest oil producer, is also the world's largest
natural-gas producer.
Flush with oil money, Russia now apparently does not feel any need to budge on
the territorial tussle with Japan in return for increased economic cooperation
with the world's second-largest
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