Dr. Joseph P. Farrell
December 28, 2016
After the Onsen summit between Japanese Prime Minister Shinzo Abe and Russian Federation President Vladimir Putin, I made a basic prediction that the issue of the Kuril islands would not be a stumbling block for Russia and Japan moving forward with lucrative trade deals. There is a simple geopolitical reality driving these events: as US power declines, Japan needs other strong allies, and a secure supply of energy, and Russia is ready to hand with energy resources in Siberia that are close to hand. Russia, in turn, needs Japan as a counter-balance to growing Chinese influence, and also as a financial and technological ally in its long term plans to develop the region. For the foreseeable future, Japan’s and Russia’s geopolitical and financial interests coincide to an amazing degree, and to a degree completely unimaginable just a half a century ago.
What I did not expect were for so many details and deals to be worked out so quickly; I was thinking in terms of a few weeks or perhaps months, but Moscow and Tokyo are apparently on a much faster clock than I am, according to this story from Russia Insider shared by Ms. B. and Mr. V.K.:
There’s two basic points in this article that I want to bring to your attention.
Firstly, note the size and extent of the recently inked deals, and note the contextual template in which they are made:
Vladimir Putin’s recent visit to Japan has proven quite lucrative. The two countries have closed 23 deals on offshore oil and LNG that are worth billions of dollars.
The deals included Russian state-owned oil giant Rosneft and a consortium of Japanese companies comprising Marubeni Corporation, Japan Oil, Gas and Metals National Corporation (JOGMEC) and INPEX Corp. signing a Heads of Agreement for joint exploration, development and production offshore Russia, according to Rosneft.
Russia has gradually been shifting its focus east following the implementation of sanctions against the country by the West over its annexation of Crimea. Prior to this weekend’s deals, the focus had been on China and India, with ties between Russia and Japan complicated by the territorial dispute over the islands, which Russia refers to as the Kuril Islands, and Japan calls the Northern Territories.
While not much is being said here about the possible role the Kuril islands have played in these negotiations, I strong suspect that they played some, for recall that in my News and Views from the Nefarium that discussed the Onsen summit, and in subsequent blogs, it appears that Japan and Russia are pursuing a different way of resolving the territorial dispute by making the disputed islands the centerpiece of a kind of “free trade zone”, operating under Russian law but with full Japanese access. While time will tell if this speculation proves to be true, as I suspect it is, it is a natural solution to the needs of both countries and geopolitically, the islands are situated to be the physical “port of entry” for the flow of goods, capital, services, technology and human exchange for the long-term plans of both countries represented by these deals. The fact that Russia Insider (which, in case you didn’t know, is a Russian government site) would mention the Kuril islands in the context of these deals is a subtle way of admitting that they were indeed the context in which these deals were made. Russia is, in short, sending messages, though…
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