Vladivostock harbor. Photo: Wikimedia Commons

Japan has prepared an urban redevelopment plan for traffic and sewage systems in Russia’s key Far Eastern port of Vladivostok as it looks for ways to warm political ties between the two nations to help ease a long-running dispute over ownership of the Kuril Islands, an archipelago in the Western Pacific.

The Japanese government has collated proposals ahead of Prime Minister Shinzo Abe’s scheduled visit to Russia in May, Japan’s Nikkei daily reported earlier this month, without citing sources. Abe’s government has been urging the nation’s corporates to join forces in a plan for economic cooperation with Russia, partly in the hope of easing negotiations over the Kuril Islands, a chain that stretches from the Japanese island of Hokkaido to the southern tip of Russia’s Kamchatka Peninsula.

Known as the Southern Kurils in Russia, and in Japan as the Northern Territories, the islands are all administered by Moscow. Citing a bilateral treaty from 1855, however, Japan claims ownership of four of the islands – Iturup, Kunashir, Shikotan and Habomai.

Vladivostok is one of the largest cities in Russia’s Far East region, an area that is twice the size of India. It is also the most prominent commercial port on Russia’s eastern coastline and in 2015 was designated a free port, meaning it now operates under a special customs and taxation system.

The Japanese offer in Vladivostock involves implementing an intelligent traffic system that adjusts signal timing in line with vehicle volume to avoid congestion. There are also proposals to renovate the city’s aging sewer system without resorting to excavation, and plans for eco-friendly garbage incineration facilities, according to the Nikkei. Financing may be provided in part by the Japan Bank for International Cooperation (JBIC), the newspaper suggested.

Owing to the dispute over the Kuril Islands, Japan and Russia never signed a peace treaty following World War II, and discussions to resolve the issue now stretch to several decades.

Japan has already put forward several economic revitalization initiatives to smooth relations with the Kremlin, including leading delegations of Japanese companies to the islands to consider joint business opportunities.

In December, Japan’s biggest architectural firm, Nikken Sekkei, submitted a so-called master-plan for Vladivostok, with modernization of infrastructure at its heart. Proposals include the creation of a ring-road to relieve the city center of traffic and connect it directly with the airport, modernization of central streets and embankments, and the creation of new business and education centers.

According to Artyom Lukin, who is associate professor of International Relations at the Far Eastern Federal University, the funding of these projects remains unclear. If they are limited to the transfer of smart technologies such as those involved in the traffic system, and to the system’s introduction at a few locations in Vladivostock, then the overall impact will be largely symbolic, he said; on the other hand, full-scale modernization of the city would require billions of dollars’ worth of investment from Japan, which seems an unlikely commitment.
The ring-road project alone would require an estimated US$1.2 billion, he said.

“Is Japan ready to invest in Vladivostok not just a symbolic sum of several million dollars, but an impressive amount in the order of a billion dollars or more? I really doubt it”

“Is Japan ready to invest in Vladivostok not just a symbolic sum of several million dollars, but an impressive amount in the order of a billion dollars or more? I really doubt it,” Lukin said. “It is unlikely that the Japanese are ready to spend such funds on projects in Vladivostok and other Russian regions given Japan’s finances, the impending aging
population and other socio-economic problems.”

He added: “The Russian leadership maybe expects such large investments into energy, transport and industrial mega-projects by the Japanese. However, Japanese corporations are not in a hurry to invest money in the Russian economy, even in the Far East region, which is in their neighborhood.”

Lukin doubts that the territorial dispute can be resolved only through economic levers. “A stable Japanese investment in the Russian economy will improve the atmosphere between the two countries and, possibly, increase the chances of a compromise solution to the problem, but no more. Even if we imagine that Japan will start investing billions of dollars in Russia, this in itself will not solve the problem of the South Kurils. It’s naive to think that such a great power as Russia will exchange disputable territories for money, even if it’s very big money.”

Russia and Japan are in active dialogue over the island issue. In December 2016, Putin and Abe agreed on a document to initiate consultations on strengthening bilateral ties in energy, business, and industrialization of the Far East. Last month, the Japanese government announced it was preparing for a new round of consultations focused on joint economic activities on disputed islands.

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