“The Northern territory”: expectations and doubts

After President Putin’s visit to Japan in December last year, which did not differ significant results, most were surprised to begin discussion of joint economic activities on the “Northern territories”. In mid-March Deputy foreign Minister of Japan Takeo Akiba (Akiba Takeo) and Deputy foreign Minister of Russia Igor Morgulov will meet in Tokyo consultations on the “special system”.

It was expected that the negotiations will not be simple, because the Russian side insisted on the implementation of business activity according to Russian law, however, now the obstacles getting smaller. One gets the impression that she seeks to come to an agreement as quickly as possible. These are the financial difficulties of Russia, as well as a high degree of complexity of the development of the “Northern territories”.

The Japanese brothers and sisters

As for President Putin’s visit to Japan, then in Moscow was dominated by a cynical evaluation: “a great victory of diplomacy Putin” (the newspaper “Izvestia”), “Breakthrough of the economic blockade G7” (the newspaper “Kommersant”), “attracting Japanese capital to the far East and curb the influence of Chinese capital” (Professor, Russian University of Economics named after G. V. Plekhanov), but in the far East, many welcomed the development of Russian-Japanese relations.

The Deputy of the State Duma of the Russian Federation of the Sakhalin oblast George Charles expressed his optimistic view: “Relations between Russia and Japan have reached a new level of development. Attracting Japanese capital and technologies in Sakhalin will enhance development.” Far Eastern governors also praised the meeting: “Of the 82 economic papers, six relate to Yakutia, so the Sakha Republic will take an active role in improving Russian-Japanese relations” (the head of the Republic of Sakha Egor Borisov).

According to local media, in the Sakhalin region held a round table dedicated to the meeting of heads of Russia and Japan. During the discussion, expressed the following view: “Japan was warmly received by President Putin”, “Sakhalin need Japanese technology in the field of seafood processing, fish farming, forestry and energy.”

“I want to speak on behalf of the residents of the South Kuril Islands. The inhabitants of the Kuril Islands are now ready to accept the presence of Japan. They treat the Japanese as brothers and sisters”, — said the Deputy Chairman of the city Council of Yuzhno-Sakhalinsk Evgeny Plotnikov, who has long lived on the “Northern territories”. He expressed his expectations related to the joint activity.

Trojan horse

The administration of Sakhalin oblast is preparing to welcome the Japanese in anticipation of the beginning of joint economic activities on the four Islands.

On 17 December, after the visit to Japan of President Putin in Tokyo hosted a meeting between Sakhalin region Governor Oleg Kozhemyako and the Governor of Hokkaido Harumi Takahashi (Harumi Takahashi). “We are ready to give a chance to Japanese companies for projects in the Southern Kuriles. We started to prepare for the reception of the Japanese. I would like to first Governor Takahashi arrived in the Southern Kuril Islands with businessmen”, — said Mr. Kozhemyako.

Ms. Takahashi said that the joint activity is administered by the government, but Sakhalin oblast has been presented to the Ministry of foreign Affairs of the Russian Federation proposals for joint business and held a number of consultations.

Two years ago because of bribery, the ball arrested the ex-Governor of Sakhalin region Alexander Khoroshavin. Was also dismissed numerous officials, has long occupied their posts. For the Governor Kozhemyako, who has two dogs Akita inu Japanese nicknames typical of Pro-Japanese statements.

“The joint business activities of Japanese companies will be provided with different privileges. Work under Russian law is the public position. In fact, Japan will be given special conditions, so the Islands would japaneseamerica”, — told local media the head of the Vladivostok center for innovative technology Yakobchuk. Thereby he expressed the opinion that Russia will make concessions during a discussion of “special systems”.

Meanwhile, among the conservative common anxiety. Information Agency Regnum published an article of Professor of Institute of the countries of East Anatoly Koshkin, in which he said: “a few years later Japan is superior to Russia in economic terms, will get their hands on the economies of all Islands. For the Japanese, will be created residential area and Japan will take away the sovereignty of Russia. This will speed up the process of transfer of the Kuril Islands of Japan”. He warned that japanesece can become a Trojan horse in the Tokyo performance.

Corruption eats up the budget for development

Sakhalin oblast is experiencing enthusiasm for the joint business, as the Federal government has expressed its intention to suspend for three years the financing of projects for socio-economic development of the Kuril Islands due to the financial crisis.

In July 2015 the Russian government has extended this project, which started in 2007, by 2025, as its validity was due to expire in 2015. The budget of the new project amounted to 70 billion rubles, 28 billion more than the previous project. The government had intended to allocate 40% of this amount from the Federal budget, however, it was decided to suspend funding for three years due to economic difficulties.

When on 20 December the Commission of the Sakhalin regional Duma announced the freezing of the Federal budget, the deputies were shocked: “This is the first time in 20 years. Japan will help.” After that, the Federal government announced that this year will be allocated 800 million rubles, but it is obvious that their interest in the development of the Northern territories decreased.

In addition, in 2016, the Russian high-ranking officials never visited the “Northern territories”, though in years past that occurred repeatedly.

Commenting on the infrastructure construction of the “Northern territories”, the authorities of the Sakhalin region reported that some of the projects already lack funding, therefore they will have to reconsider.

Perhaps the reason for the reduced funding from the Federal budget also is that corruption eats up funds for development. This can be seen as retaliation by the Federal government. In November last year on suspicion of abuse of power were arrested the mayor of the South Kuril district Vasily Solomko.

According to the information portal sakhalin.info from November 30, 2016, in the period from 2014 to 2016 the Sakhalin region Prosecutor’s office initiated 17 criminal cases in relation to misuse of funds allocated for the development of the Kuril Islands.

Was sentenced 20 people. 16 of them were fined in excess of 500 thousand rubles.

It is assumed that this is just the tip of the iceberg. The probability, which is characteristic of Russia, corruption absorbs huge funds allocated for the development. We cannot deny the possibility that the Japanese, who will start work on the Islands, are involved in such violations.

Unknown test

In accordance with the press release issued during the visit of President Putin to Japan, the leaders of Russia and Japan have instructed relevant ministries and agencies to start discussing the form and terms of the joint business activity in such fields as fishing industry, tourism, medicine, ecology and so on. It was reported that the joint activity could be an important step towards signing of a peace Treaty.

From Russia training are such agencies as the Ministry of foreign Affairs, Ministry of development of the Far East, customs service of the Sakhalin region and so on. On 7 February in Japan held the first meeting of the Council for joint business activity, during which were discussed specific steps. Foreign Minister Fumio Kishida ordered to speed up the preparatory process. March Council meeting will be held on a regular basis.

A Russian source in Tokyo said: “the purpose of the joint business is to create on the Islands the climate of peace and cooperation. We will start with small projects and then move on to large. First you need to determine what to do, and then create a system.” Thus, he stressed the need to start with a discussion of the projects. Meanwhile, the Japanese side requires first to prepare the legal framework that will not hurt legal position of Japan, therefore the possible differences.

The Russian side expressed its desire to develop a framework of cooperation in the sphere of fishing industry close to four Islands, on which agreement was reached in 1998. Nevertheless, regarding joint business activity on land, that seems like a lot of different challenges will grow. It is expected that the Russian customs and border guards, professing conservative views may become an obstacle.

It is also unknown whether the development of a joint business solution to the problem of ownership of the Islands. Joint activity, in which the Japanese and the Japanese company will be the first after the war to work on the four Islands will become a novel challenge for Japan.