Lopsided Expectations over Islands

Japanese and Russian representatives will meet this weekend to discuss joint economic activities on 4 Russian-controlled islands claimed by Japan, following talks between the countries' leaders last year.Japan hopes the economic projects could help resolve the longstanding territorial dispute, but there are concerns Russia just sees it as a way to shore up its economy.

Etorofu is the largest of the 4 disputed Russian-controlled islands. The local people have been looking forward to seeing the economic cooperation discussed at last year's summit meeting between Japan and Russia.

One company has 9 fish hatcheries on the island, and is now farming salmon and trout. It is hoping to increase its output by incorporating cutting-edge Japanese fish-farming technologies.

"Next year we are planning to build another hatchery," says Ivan Varaksin, fish-breeding manager at Gidrostroy. "And in the future, we are hoping to add even more facilities."

The company has also entered the tourism industry by building a hotel. It is keen to develop tourism, which was one area outlined in the planned economic cooperation.

"I think we can work together with Japan on tourism. Many Japanese are already visiting the region without visas, through exchange programs," says Youriy Svetlicov, director general at Gidrostroy.

The Putin administration has been promoting its plans to develop Russia's Far East. Development has been lagging in the region. The government earlier announced a 10-year plan through 2025. It promised to invest around 468 million dollars in what they call the Kuril Islands, some of which are claimed by Japan.

But official documents released in December indicate that no spending was planned for the islands until 2019. Russia released this information immediately after the bilateral talks on economic cooperation.

The underlying reason is the drop in Russia's economic output. Russia has cut spending on its Far East region because the falling price of crude oil has reduced its foreign currency inflow.

This has alarmed the Sakhalin Oblast, which has jurisdiction over the islands claimed by Japan. Some local lawmakers say that Japanese investment will be essential now for boosting the economy.

"I'm concerned about the future. Investment has been dropping, and the effect is soon likely to become apparent," says Galina Podoynikova, an official with the Sakhalin Regional Council.

Russia says it intends to keep developing the disputed Islands, but now it looks as though Japan's support will be essential to achieve that.