December 17, 2016 By Joseph P. Farrell

Last Thursday in my News and Views from the Nefarium I talked about the Onsen summit in Japan between Prime Minister Shinzo Abe and Russian Federation President Vladimir Putin. As I put it then, one should not expect many breakthroughs from the summit on the issue of the Kuril islands, those northern islands seized from Japan by the Soviet Union at the end of World War Two. Neither nation has, since then, been willing to renounce those claims. Instead, I suggested that one has to look forward to a long process of negotiations on a whole host of issues. But the central geopolitical issue is, Russia needs Japanese financing and expertise to develop Siberian infrastructure, and as a counter-balance to growing Chinese influence in the region, and Japan needs a close, and secure, supply of energy that cannot be interdicted by China.

This geopolitical convergence, I've been arguing, is a much stronger gravitational pull than anything else keeping the two Asia powerhouses apart, including American pressure on Japan, and including the stormy relationships between the two countries that began in the Russo-Japanese war, when Japanese land and naval forces easily and handily defeated the Tsar, and seized several key Russian outposts in the far East, including Port Arthur. Back then, both powers sought a "neutral negotiating power" to conclude a peace, which was Teddy Roosevelt's USA. Notably, neither power is now paying all that much attention to the USA, although Mr. Abe's government carefully avoided giving the impression that Mr. Putin's visit was a state visit, for he did not meet with Emperor Akihito.

However, I think we can safely chalk up my prediction of "no breakthroughs" at the summit in the "big miss" column. Here's why:

Putin, Abe agree on joint Russia-Japan activities on Kuril Islands

Putin: Kuril Islands may become unifying element, help Moscow & Tokyo finally sign peace treaty

There's much to ponder in these articles, and I think it is safe to say that the two nations may have found not only a way around the Kurils issue, but also, in arriving at a unique solution, perhaps have established a template for further long-term action. In short, I think it's safe to say that what we may have just witnessed is a quiet breakthrough, but one whose implications will continue to affect regional geopolitics for years if not decades to come.

First, note what the first article states about the Kurils issue:

Putin and Abe had to discuss the issue one-on-one after Russian and Japanese experts failed to agree on the wording of the statement, he added.

According to Ushakov, the statement on joint Russian-Japanese economic activities in the South Kuril Islands, which may concern fisheries, tourism, culture and medicine, will be published tomorrow.

Abe told reporters the leaders “thoroughly and frankly discussed the issues of free access to their homeland by former residents of the islands, joint economic activities between the two countries with a special economic zone on the islands, as well as the issue of a peace treaty."

Russian presidential spokesman Dmitry Peskov later stressed that the Japanese side had no objections to working in the framework of Russian law in the Kurils.

In other words, the rumors that we've heard about precisely such a solution to the problem, first aired by Russian and Japanese diplomats some months ago, appears to have been given some sort of formal consent by the two leaders. Note that under the terms of this putative agreement, Russia retains sovereignty, and hence, Japanese living, or doing business there, will operate under Russian, rather than Japanese law. In return, a "special economic zone" will be created, including free access of Japanese to the islands. What this means, I suspect, is that the Kurils are being viewed by both powers as the base of operations for future Japanese participation in Siberian infrastructure development. As such, we may expect that this "special economic zone" may include a lessening or complete lifting of tariffs between the two countries in the Kurils itself, for the flow of goods, services, and finance. Watch for future agreements working out the details of this arrangement. What intrigues here is that neither leader, apparently, ever raised the issue of sovereignty over the Kurils, but rather, cut right to the chase about the potentials for long term Russo-Japanese cooperation.  And lest the obvious be missed, this is also an indicator of increasing American weakness, or at least, of the perception of increasing American weakness, particularly by The Empire of Japan.

Mr. Putin seems to reinforce these speculations with his own statements, as recorded in the second article:

Russia's Kuril Islands, long disputed by Japan, may become a unifying element, Russian President Vladimir Putin said during his visit to Japan, noting that joint economic activities there could help the two countries finally agree on a peace treaty.

If we take the right steps in the direction of the plan proposed by the Prime Minister [Abe], and he proposed creating a separate structure regulating economic activities on the islands, striking a legal intergovernmental agreement [and] working out a mechanism for interaction, [we can], on this basis, generate the conditions that would allow us to finally solve the problem of the peace treaty,” Putin told the news conference following talks with Japan’s prime minister on Friday.

These islands, instead of a bone of contention between Russia and Japan, can, on the contrary, become something uniting [the two countries],” the Russian leader said.

The "long term template" idea appears to be in the thinking both of Mr. Abe, and Mr. Putin. The Kurils, in short, and far from being a stumbling block, are being made a test bed for wider and longer term arrangements. And geopolitically, it is difficult to conceive how China or the USA will be able to inject themselves into the process. It is under these conditions and considerations that I suspect we've witness a breakthrough.

But there is much more than economic cooperation going on here. There are also now on the table bi-lateral defense talks under way on mutual security concerns between the two countries (citing the first article again):

Putin and Abe also agreed to restore military cooperation between the two countries as well as ties in the spheres “frozen” in recent years, Russian Foreign Minister Sergey Lavrov said Thursday.

It was agreed to resume “2+2” ministerial talks, which would involve meetings between foreign ministers and defense ministers of both nations, he explained.

According to Lavrov, the Japanese side has become more aware of Russia’s worries over US global missile defense system and its increased presence in the Asia-Pacific region, which Moscow views as “inadequate to the threat posed by North Korea’s nuclear and missile programs.”

We have an impression that our Japanese colleagues now understand better Russia's concerns in this matter,” Lavrov said, adding that Russia and Japan had confirmed mutual interest in cooperation on security issues, despite what he called “special relations” between Tokyo and Washington.

In other words, in spite of the "special relationship" between Japan and the USA, which Russia acknowledges, Japan and Russia are proceeding with bi-lateral talks between their respective foreign and defense ministers.  What these talks are about are easy to guess: China, and, as the article itself suggests, North Korea, which curiously, the article states that the American presence is "inadequate to the threat posed by North Korea's nuclear and missile programs." In other words, Moscow is blaming not Tokyo, or Beijing for the North Korea problem, but Washington, and apparently, the Japanese were able to see Russia's point. This, in itself, is another earthquake, for it is suggesting that North Korea is being propped up covertly by Washington as an agent provocateur to create instability in the region in order to justify the continue American military presence in the region. This is admittedly a wild speculation, but there have been stories and rumors to that effect over the years on the internet. In any case, that Russia would phrase things in this unusual manner, and that Japan would apparently be willing to listen and consider this strange viewpoint, speaks volumes.

In any case, Mr. Abe also seems to be viewing the Kuril "economic zone" issue as a stepping stone to an eventual formal peace treaty between the two nations according to the second article:

rime Minister Abe, who has repeatedly pledged to resolve the decades-old conflict, also expressed confidence that a special economic regime for the disputed Kuril Islands would help resolve the peace treaty problem.

We’ve agreed with the Russian president to create a special economic regime for conducting special business activities on [the disputed] islands,” he said at the joint press-conference on Friday, adding that “the special economic regime will be aimed at providing a background for resolving the [peace treaty] problem, [it] will be a very important step for solving the peace treaty issue in the future.”

Abe also noted that Moscow and Tokyo are set to begin immediate negotiations on granting Japanese citizens free access to the graves of their relatives on the islands.

We agreed that former residents could freely visit the places where they had previously lived and buried their ancestors. We agreed, on humanitarian grounds, to immediately begin negotiations on how to provide this access. This way, we can, at least in part, meet the wishes of the former inhabitants of the islands,” Abe said. Russian presidential spokesman Dmitry Peskov stressed earlier that the Japanese side had no objections to working on the Kurils within the framework of Russian law.

The bottom line here is that Japan and Russia just set off a geopolitical earthquake, in my opinion, one with long term implications for the region. As we watch the details of these agreements being worked out over the coming years, I suspect that we will see a fundamental realignment of power and particularly a wide-ranging sphere of cooperation between the two countries on economic and military affairs.

See you on the flip side...