Japan and Russia will create a $1 billion fund to invest in joint energy and infrastructure projects over the next five years, the leaders of the two countries said in Tokyo Friday at the end of meetings that looked cozy but fell well short of Japanese expectations.
Prime Minister Shinzo Abe had been hoping for progress on a territorial dispute that prevented them from signing a peace treaty at the end of World War II, but instead had to settle for giving money to Russia for economic projects.
“It would be naive to think we can solve this problem in an hour, but there is no doubt that we need to look for a solution,” Russian President Vladimir Putin said during a news conference with Abe at the end of two relatively short meetings Thursday night and Friday.
The Japanese prime minister said both sides needed to be flexible. “We need to work towards a breakthrough so that we don’t disappoint the next generation,” said Abe, who addressed his counterpart by his first name, a surprisingly informal gesture in Japan.
It was the two leaders’ 16th meeting since both returned to office in 2012, and there was a clear camaraderie between them. Putin praised the sake and hot springs in Abe’s hometown of Nagato, where the two leaders met Thursday, while Abe said the meeting in Japan was worth the three-year wait.
Relations between the two leaders had been somewhat constrained by the deterioration in ties between the United States — Japan’s key ally — and Russia in recent years. Putin arrived in Japan just as President Obama said the United States would retaliate against Russia over its cyberactivity during this year’s election.
However, the election of Donald Trump, who has openly praised Putin and promised much warmer U.S.-Russian ties, has given Abe a green light to pursue closer links with Moscow.
But for all the conciliatory words in Tokyo, the trip was a clear win for Putin, who was making his first visit to a G-7 country since Russia annexed Crimea in 2014 and was keen for investment to counteract low oil prices and international isolation over Ukraine and Syria.
Russia’s Direct Investment Fund and the Japan Bank for International Cooperation will each invest $500 million in a new fund that will make investments in sectors including energy, urban planning and medical services, the two sides said. The fund will back Japanese companies operating in Russia, local media reported.
Putin has been particularly interested in Japanese investment in the relatively undeveloped Russian Far East, the part of the country closest to Japan.
Abe said agreements on more than 60 other projects the two discussed in Sochi six months ago were near completion, but the details remained vague. Neither the Japanese prime minister’s office or the foreign ministry would provide details on any of the projects.
Japan also relaxed visa requirements for Russian tourists and for business visitors.
But the encounter was not so successful for Abe, who had been hoping to pave the way for the return of at least two of four disputed islands northeast of Hokkaido, known as the Northern Territories to Japan and the southern Kurils to Russia.
During World War II, the Soviet Union seized the islands just days before Japan surrendered in 1945 — causing almost 20,000 Japanese residents to hurriedly flee — and the dispute over the islands’ ownership has hamstrung the countries’ relations ever since.
Abe and Putin agreed to begin discussions on joint economic activities on the islands, which remain under Russian administration.
“Joint economic activities on the southern Kuril islands will foster trust towards concluding a peace treaty,” Putin said.
But working out the details of any joint economic activities will likely prove challenging, analysts say, as Japanese companies will balk at the suggestion of operating under Russian law while the government would see this as a recognition of Russian sovereignty.
Abe said he wanted to allow the elderly Japanese residents who lived on the disputed islands to make a final visit to their former home while they are still alive.
From: https://www.washingtonpost.com/world/russia-and-japan-agree-to-set-up-1-billion-investment-fund/2016/12/16/552b7af8-c374-11e6-aa03-f2e1260448ff_story.html?tid=pm_world_pop&utm_term=.f4270c093629
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