November 11, 2016 By Joseph P. Farrell

This very important article was shared by Ms. A.S., and it's a jaw dropper. It consists of an interview conducted by RT's Sophia Shervanadze, a relation of the former Soviet Foreign Minister under Mikhail Gorbachev, Eduard Shervanadze, with Japanese foreign policy mandarin and former Prime Minister Yukio Hatoyama. While there's much food for thought here, a couple of things leaped out at me. Here's the RT article and transcript of the interview:

Stationing American troops in Japan will lead to bloody tragedy – ex-PM of Japan

At the center of the speculations being advanced by Mr. Hatoyama are, of course, the long-standing issue of the Russian occupation of the Kurile islands at the end of the Second World War, and Japan's consistent - until now, at least - position that it did not recognize the occupation. It should be stressed, of course, that Mr. Hatoyama does not speak for the Abe Government, but nonetheless, it is difficult to ignore the possibility that Mr. Hatoyama may be sending informal messages in his "unofficial capacity":

Sophie Shevardnadze: 60 years ago Moscow has offered to give two of the four Kuril islands to Tokyo - Shikotan and Habomai. But Japan demanded all four islands, and its position hasn’t changed since. For Japanese politicians to give up the claims on all four islands - will that be political suicide?

Yukio Hatoyama: Now, looking at the situation 60 years later we have to admit that we need to give up claims on all four islands. We need to resume talks about the two islands – Habomai and Shikotan – if we want to have any chance of coming to an agreement.

If the Japanese government keeps insisting on discussing all four islands this will not result in any positive outcome whatsoever. So it would make sense to start with talking about Habomai and Shikotan and leave the other two islands up for further discussions.

Further down, Mr. Hatoyama suggests one way of resolving the issue: create an economic free zone, with Russia retaining sovereignty but in such a way that both Russian and Japanese populations are allowed to coexist in essentially a free market zone:

SS: The Yomiuri newspaper reports that Japan is ready to create a special economic zone under the Russian administration on Iturup and Kunashir - it’ll be a visa-free, common economic space. Is that the breakthrough that the Japanese Prime Minister is talking about?

YH: I can’t speak for Prime Minister Abe because I am not a member of his government at this point. But I would welcome this step – creating common economic space on the islands as a way of settling the issue, which is what Yomiuri was talking about. But I don’t know for sure what Prime Minister Abe brings to the negotiations table.

Now, before we continue with this interview, let's pause to take stock of the potential "high octane speculative" implications here: such a zone we've seen before; indeed the BRICSA bloc countries, and in particular Russia, China, and India, have negotiated similar bi-lateral arrangements before: India recently negotiated with Iran to settle all payments in Indian rupees, by-passing the US dollar entirely.  China and Russia have similar arrangements for the yuan and the ruble, again, by-passing the US dollar completely. It therefore would not surprise me that if Mr Hatoyama is, as the article suggests, still "in the know," then the Japanese and Russians might be considering a similar measure for the Kuriles: with bilateral payments in yen and rubles. This makes sense from both the Japanese and Russian points of view, particularly if Japan accepts Moscow's 1960s offer of the return of two of the islands, in return for such a zone on the other two. Such an agreement would be a "camel's nose in the tent," for as I've argued in previous blogs, a Russo-Japanese accord benefits both countries: Japan's energy needs can be supplied by the development of Siberian energy fields, and results in a much shorter supply line than its current ones through - let it be noted - the South China Sea. Russia in turn can tap into the enormous pool of Japanese technology and infrastructure development capability, and into Japanese money. A bi-lateral free-trade and currency zone could be a first step to a much wider such arrangement between the yen and the ruble for all of Siberia.

With that in mind, consider this bombshell:

SS: Well, I’m interested in your personal opinion. I understand that you do not represent the government at this point, but you’re someone who’s in the know about this. What do you think, can the prime minister achieve a breakthrough in negotiations with this position?

YH: I think that the prime minister should strive to achieve this breakthrough. But the Russian public would not support the idea of returning even some of the Kuril Islands, because the patriotic spirit is on the rise in Russia after bringing Crimea back.

But I sense that despite this situation President Putin still wants to settle the Kuril issue and I think his decisions will be supported by the people.

In my opinion, we need to create a situation that would allow us to move forward – we need to be walking towards each other. It is possible to reach a compromise on the Kunashir and Iturup issue. Common economic space and joint Russia-Japan governance come to mind as possible solutions. That is my personal opinion. I would really like to see this breakthrough.

SS: As one of the options, is it possible that Japan recognises Russia’s acquisition of Crimea - in exchange to the transfer of Kuril islands to Japan? Can Japan go against the G7’s stance on Crimea for the sake of the return of the Kuril islands?

YH: I doubt that the Abe administration would be brave enough to take that step at this point. If you ask me I think that historically Crimea has been Russian territory. Under Khrushchev it was given to Ukraine – with total disregard of international law. That’s how the Crimea issue began. Now the international community should recognize the peninsula as part of Russia. If Japan did that and recognized Crimea as Russian territory it could encourage European countries to follow suit.

And that in turn could make President Putin more inclined to meet some of Tokyo’s demands and move forward on the Kuril Islands issue. Russia might even satisfy Japan’s claims on all four islands. Of course this is just conjecture, and unfortunately at this point the Abe government is not ready to recognize Crimea as part of Russia. However such step would boost the Russia-Japan relations tremendously.

SS: You went to Crimea last year. You said then that Crimea becoming part of Russia is the expression of the actual will of the Crimean people. You’ve been eaten alive by the Japanese press for that - why was your point of view met with such hostility, is it only because it’s different from the G7’s point of view?

YH: The Japanese media and government cannot navigate away from the Cold War attitudes, and whenever there is a disagreement between Russia and the US they always take America’ side. Tokyo remains dependent on the US’s views. This means that when it comes to Crimea Japan will continue to side with America and the G7 countries and claim that it was Russian annexation of the peninsula in violation of international law.

While Mr. Hatoyama makes it expressly clear in his responses to Ms. Shervanadze's questions about the Crimea, that Japan will "always" take the USA's position in the matter, one wonders if by merely mentioning the possibility in response to Ms. Shervanadze's questions, he might be indicating that quietly, behind closed doors, the issue has already been raised between Moscow and Tokyo. Hotyama's response is curiously ambiguous: on the one hand, he indicates Mr. Abe's government would have to be "brave enough" to take the step, and that he doubts it will do so. Yet, on the other hand, he does indicate that "historically (the) Crimea has been Russian territory," and points out Krushchev's actions that made it a part of The Ukraine. This, in my opinion, could be a way for Tokyo to signal to Moscow that, unofficially, it recognizes the Russian position.

While this means we're still a long way off from seeing a formal end to World War Two between the two powers, it does mean that we can expect some progress to be announced at the upcoming summit between Mr. Abe and Mr. Putin when the latter visits Tokyo in a few weeks. This is a development to watch closely.

See you on the flip side...