Russia: Government Plans Major Investment In Disputed Kurile Islands

by Robert Parsons

Iturun Island, the largest of the many Kuriles (ITAR-TASS)

The Russian government has announced plans to make the Kurile Islands in the Pacific Ocean the best-funded region in Russia. The 2007-15 program will boost federal funding to more than $600 million -- the equivalent of $1,000 per person per month - on the sparsely populated islands. The announcement is likely to anger Japan.

PRAGUE, August 9, 2006 (RFE/RL) -- Which part of the Russian Federation -- a country deep in demographic crisis -- has suffered the worst population decline of the last decade?

Chechnya, you might suppose, after years of bloodshed and population flight, or the rapidly emptying spaces of northern Siberia.

But you would be wrong -- at least in percentage terms. The record is held by the Kurile Islands, a string of rocky outcrops stretching south from the Kamchatka Peninsula to the Japanese island of Hokkaido.

Lonely Existence

Sixty-one years after the Kuriles were seized from Japan by the Soviet Union at the end of World War II, scarcely 6,000 civilians still make a living on the islands. They are outnumbered by soldiers almost two to one.

But, says Russian Economic Development and Trade Minister German Gref, enough is enough. His 17 billion-ruble program to develop the islands promises a transformation.

And not just in the economy. According to Dmitry Trenin, deputy director of the Moscow Carnegie Center, Russia is sending an unequivocal message to Japan that the Kuriles are no longer up for negotiation.

"The message is unambiguous: The limit of Russian potential concessions to Japan, which was made clear by both President [Vladimir] Putin and Foreign Minister Lavrov, would have Russia, in case of a peace treaty being signed with Japan, transferring the island of Shikotan and the Habomai group of islands to Japan," Trenin said. "That limit is now being confirmed by the development project."

Shikotan and the Habomai group, which form part of the southern Kuriles and are of little economic or strategic interest to Russia, were first offered to Japan in 1956 by the Soviet Union in an effort to reach agreement on a formal peace treaty pertaining to World War II. Tokyo didn't agree then and is unlikely to do so now. It insists on the return of all the Kurile Islands.

Japan refers to the islands as the Northern Territories. Even before Moscow's investment program was unveiled, Prime Minister Junichiro Koizumi, speaking ahead of July's G8 summit in St. Petersburg, complained that the impasse over the islands was having a damaging effect on Japanese investment in Russia.

Why though has Moscow decided to act now?

Trenin sees the plan as part of a wider attempt to address weaknesses along Russia's vast border.

"It also sends I think a very clear signal that the exposed territories of the Russian state are now being taken care of and you look at Kaliningrad, which now has received much more attention than it was getting for many years; you look at the North Caucasus; and you look at the money which the government is about to spend on reconstructing Chechnya, and to me this is all part of the pattern," Trenin said.

Leadership Considerations

The Kremlin must have considered, too, how the program will be received by Japan. John Swenson-Wright is an expert on Japan and North-East Asian security issues at Chatham House, a London-based international affairs think tank.

"I suspect that this may in part be an effort to anticipate the change of leadership in Japan," Swenson-Wright said. "The prime minister [Koizumi] steps down in September. Some people have argued that there is growing nationalism in Japan and the Russians may be attempting to reassert their position in the face of what they anticipate may be a more hard-line position by whoever takes over as prime minister."

The strategy appears to be to present Japan with a fait accompli.

Until now, the future of the islands was kept in doubt by Moscow's apparent lack of interest and their isolation from the mainland. The only airport is too short for most aircraft. It was built by the Japanese for kamikaze pilots who showed little concern for the length of the landing strip.

That is about to change. By 2017 the Kuriles will have a new all-weather airport linking them with the mainland, a port, new roads, 20 fish-processing factories in place of the ramshackle pair that exist today, and, it is hoped, a precious-metals mining industry.

But, as Trenin argues, Moscow cannot afford to alienate the Japanese.

A fishing trawler unloads in the southern Kuriles (TASS file photo)

"Japan is a significant player and the potential for Russian-Japanese collaboration is not to be ignored," Trenin said. "The development of the Far East and Siberia is one of the most important, if not the most important geopolitical problem that Russia is facing in the 21st century and in order to have Japan as a bona fide partner you would have to give Japan something from the territories that they are claiming."

Much-Needed Injection

By putting facts on the ground -- like the airport and new infrastructure -- Russia may calculate that Japan will ultimately have little choice but to accept the reality of Russian sovereignty. But, says Swenson-Wright, Moscow may be misjudging the Japanese mood.

"The Russia-Japan relationship has always been one in which the economic incentives have been relatively limited in terms of swaying political and diplomatic opinion within the Japanese political establishment," Swenson-Wright said. "This is one bilateral relationship where economics have taken a back seat to these larger territorial and political issues. There is a great deal of emotional sensitivity on the part of the Japanese. The legacy of the war is still in many ways a live issue in the minds of Japanese negotiators and their political leaders."

Which, if he is right, may yet undermine the scheme for the regeneration of the islands. Federal investment is undoubtedly needed, but without private investment from Japan -- the Kuriles nearest neighbor - the long-term future of the islands may be little brighter than it is today.