Russian relations with Japan are frozen because of the Kurile Islands (the Northern Territories) problem. The USSR occupied the four islands in 1945, when, at President Roosevelt’s request, Stalin broke a nonaggression treaty with Tokyo at the tail end of World War II and occupied the southern part of Sakhalin as well as the islands. Today, Russia benefits from rich fisheries in the Kurile Islands’ waters, but Japanese investment is frozen.
Foreign investment and economic development need three preconditions: a positive security climate; the rule of law; and basic infrastructure. Russia has a long way to go on all three. It needs to have good relations with the major pacific powers—the United States, China and Japan—while further developing ties with Canada, Korea, Australia and others.
It needs to overhaul its courts and eradicate corruption. Most importantly, it needs to continue developing modern infrastructure and attract high-quality personnel to the Far East. The potential is tremendous. Can Russia rise to the challenge?
Ariel Cohen, Ph.D., is senior research fellow in Russian and Eurasian Studies and International Energy Policy at The Heritage Foundation (www.heritage.org).