Offering Economic Cooperation

Shinzo Abe administration considers offering broadened economic cooperation with Russia in the summit meeting between Abe and President Vladimir Putin in Yamaguchi later this year. The pledge mainly includes developing infrastructure in the region of Far East or Siberia, which cost amounts to ¥1 trillion. While Abe looks for drawing compromise on territory issue over Northern Territory based on economic cooperation, Putin does not show any attitude to make a major deal on it.

In the meeting of both leaders in Sochi last May, Abe offered 41 projects for economic cooperation in Far East or Siberia. They were categorized into eight kinds such as medicine, energy development, industrial improvement or exchange of the people. The projects included improvement of ports of Vladivostok, Zarubino and Vostochny, or building a petrochemical plant in the suburb of Vladivostok.

In the field of medical treatment, Japan is ready to transfer cutting edge technology of endoscope or catheter, if Russia could introduce deregulation on medical treatment by Japanese doctors. For energy development, the focuses include joint project for searching mineral by Irkutsk Petroleum and Itochu Co., and increasing bases in Sakhalin 2 natural gas project joined by Mitsubishi Co. Improvement of Khabarovsk International Airport and development of farming in Far East including building in-door agricultural facility for vegetables are also considered.

The projects can be increased in the discussion between the two governments. Minister of Economy, Trade and Industry, also in charge of Economic Cooperation with Russia, revealed that numbers of possible project was reaching 100 in the official sessions between the both sides. The result will be reported in the bilateral summit meeting, taking opportunity of Asia-Pacific Economy Cooperation meeting in Peru next month.

Abe recognizes the offer of economic cooperation as measures for confidence building that may positively affect negotiation over Northern Territory and peace treaty. Although Ministry on Foreign Affairs were negative on economic cooperation with fundamental concern of “running away without payment,” the staffs in Prime Minister’s Official Residence and METI pushed the agenda with hope of developing new economic market.

It is still hard for Japan to persuade Russian people for returning the islands to Japan, which they believe were gained as a result of World War II, even with positive impression over economic cooperation. The prior investment may achieve no outcome in the negotiation over the territory.