The economic partnership between Russia and Japan remains problematic as well.  There have been some high-profile joint-venture failures.  There are serious concerns in Japan about the Russian tax and legal systems, lack of transparency in contracts, and most importantly the continuing risk of falling afoul of Russian organized crime.  Throughout the 1990s, bilateral trade hovered at an annual average of $5 billion.  The volume of Japanese direct investment into the Russian economy has been quite low, including in the Far East.  Indeed, after a long period of neglect, the Federal and local governments of Russia have accelerated investment into the local economy of the southern Kurils.  As the islanders' standard of living gradually improves, there is less motivation to transfer the territory to Japan.  Konstantin Pulikovsky, Putin's special representative to the Far Eastern Federal District, has suggested that Moscow set up a free economic zone in the Sakhalin and Kuril Islands before the end of the year. Implicitly, this statement indicated that Russia has opted to develop the Kurils unilaterally, effectively dismissing previous talk of "joint development" in partnership with Japan.  Those developments coincide with Tokyo's own decision to downsize its involvement in the economy of the disputed islands, especially until the "Suzuki" scandal is resolved.

The China factor, which has been viewed as a serious motive for rapprochement between Russia and Japan, is not sufficiently strong.  Japan is undoubtedly concerned about the rising economic and military power of China.  Moscow and particularly the Russian Far East are worried about Chinese migration in the context of the continuing decline of Eastern Russia's population. However, for obvious reasons both Moscow and Tokyo are reluctant to publicize their worries about China and create any impression of ganging up against Beijing. Besides, Moscow continues to see the U.S.-Japan alliance with more suspicion than Beijing's intentions, while Russia¹s close military ties with China alarm Tokyo. In a recent interview, the Head of the Japanese National Defense Agency General Nakatani complained that Russia's arms exports to China affected the regional balance of forces.(1)

The Korean problem seems to be the most pressing regional issue that could warrant increased security cooperation between Moscow and Tokyo, and this, in turn, could lead to tangible improvements within the entire framework of Russian-Japanese relations.  Although Russia and Japan publicly support the existing formats of talks with North Korea, their pessimism over their efficacy has been growing. In the "Moscow Declaration" (December 1, 1998) Russia and Japan agreed on the  "the importance of creating in future a negotiating mechanism with the participation of all interested parties, including Russia and Japan, on maintaining security and confidence building in Northeast Asia."  For a long time, Russian diplomacy has viewed the Korean process as a prelude to the establishment of a permanent security dialogue in Northeast Asia. Not surprisingly, Moscow reacted positively to the recent proposal by Japan's Defense Agency Chief regarding the creation in Asia of a security structure with the participation of Japan, Russia, the United States, China, the Republic of Korea and the Democratic People's Republic of Korea.

The advancement of security cooperation between Russia and Japan on Korea and other regional issues depends to a great degree on the U.S. attitude to multilateral regional cooperation and its stance on the Russo-Japanese territorial dispute. During the Cold War era, the United States consistently opposed the settlement of the territorial dispute through partial return of the disputed islands, but the Clinton Administration started drifting toward a resolution based on compromise.  Some media reports indicate that President George W. Bush backed Japan's claim on the disputed islands during his trip to Japan in February 2002, but the fact that it was not publicized testifies to the administration's reluctance to openly take sides in the territorial dispute. Washington's direct involvement in the bilateral dispute is unnecessary and could only complicate the matter. A more promising United States contribution to the normalization of Russo-Japanese relations would be through the advancement of multilateral regional security consultations. According to Tsuyoshi Hasegawa, a leading researcher of Russo-Japanese relations, the choice for the United States is either to remain passive concerning the Russian role in Asia or to adopt a more proactive policy by engaging Moscow in a regular and comprehensive dialogue concerning Asia-Pacific developments and issues. Such a comprehensive, consistent United States policy toward Russia in Asia will help Russia and Japan continue to ameliorate mutual hostility and engage in a constructive dialogue.  (2)

It is obvious that the Bush Administration would prefer not to confront both Iraq and North Korea simultaneously. The North Korean challenge presents therefore a historic opportunity to rethink the earlier approaches to security in Northeast Asia. While Washington is likely to be preoccupied with Iraq in the next few months it could share the responsibility of dealing with North Korea with regional powers by blessing the formation of a Northeast Asian multilateral security forum initially convened in the context of the Korean settlement. This would undermine Pyongyang's ability to play its neighbors against each other and at the same time be perceived by North Korea as willingness to engage, rather than corner, it. Such a subregional mechanism could also mitigate other security issues in Northeast Asia and promote better relations between its nations, such as Russia and Japan, without undermining America's regional pre-eminence.

Rouben Azizian is Associate Professor at the Asia-Pacific Center for Security Studies in Honolulu. Between 1972 and1994 he was a member of the Soviet and Russian diplomatic service. The views expressed in this essay are his personal opinions.