Russia, Japan and Economic Cooperation in Asia

Future economic relations with Asia are extremely important for Russia. Political relations with Europe have deteriorated due to the excessive advance of NATO to the East, and this deterioration impedes the development of cooperation. Until now, economic ties with Europe have accounted for 50% of Russia’s economic ties. However, for the future development of Russia, it will become a natural necessity to strengthen ties with Asia, which until now have not been sufficiently developed. Particularly important for Russia are relations with countries in East Asia which are closest to Russia’s borders. 

Without a doubt, the strengthening of economic ties with Russia will also increase the development of Asian countries. China has already built full-fledged ties with Russia, which it will undoubtedly develop in the future. The volume of deals between Russia and South Korea is growing. In 2017, the amount of trade between Russia and South Korea exceeded the volume of trade between Russia and Japan. 

Problems of economic ties between Russia and Japan 

Russia has only realised approximately 30% of its potential with respect to its economic ties with Japan. If Japanese economic circles are determined to work with Russia, the countries can realise their full potential for trade. So, for example, if the amount of trade between the two countries in 2018 totalled some $20 billion, then this figure could easily be increased to $60-70 billion. 

For Japan, Russia is an undeveloped market and the only remaining major economic partner with which it can develop trade ties. At the same time, if Russia can establish economic ties with Japan, this will immediately improve the situation with bilateral cooperation. So far, this is impossible because of the fact that Japanese economic circles cannot strengthen ties with Russia due to the lack of progress in political relations.

In politics everything is not smooth because of the Kuril Islands territorial dispute. These four small islands are like a bone in the throat that will forever impede the development of our relationship. Any solution should be considered. It is very important to come to an agreement as soon as possible. Neither party will gain anything from leaving a solution to future generations.

Improving political ties is necessary to contribute to a breakthrough in economic cooperation. Politics and economics are like two wheels on one cart. Unfortunately, with the economy alone, you will not go far. 

I believe that Japan harms itself by locking itself into the Kuril Islands dispute and not building economic ties; the potential for these being lucrative is very high, given the size of the Russian market and prospects for the development of Siberia’s natural resources. We aren’t seeing the forest for the trees. The territorial problem should be solved immediately, in any form, and we must move to engage in serious economic cooperation. And this is achievable only through political consensus. 

A decision must be made while president Putin is in power in Russia, and Shinzo Abe in Japan. If the territorial issue is resolved, a peace treaty will be concluded. If a peace treaty is concluded, the visa regime will be simplified. Businessmen from both countries will be able to move freely between them without having to go through time-consuming visa procedures. And, probably, all this will lead to an explosive growth in bilateral ties. Japan will be able to obtain much greater benefits from economic cooperation with Russia than from the disputed territories.
Teruo Asada on Russian-Japanese Cooperation in the Far East
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.