Country Report: Russia (November 2016)

Noteworthy in the fall of 2016 has been the increase in articles about the Russo-Japanese relationship. They accompanied the Eastern Economic Forum meeting of Putin and Abe and anticipated the planned visit of Putin to Yamaguchi in December. Further attention was also given to Sino-Russian relations, especially as questions kept being raised about how linking the Eurasian Economic Union and the Silk Road Economic Belt is proceeding. Coverage of North Korea and diplomacy regarding the Korean Peninsula was scant during this period, as UN Security Council deliberations have dragged on in secret. Southeast Asia drew more attention earlier in 2016, but it has not been conspicuous of late. The main story has been Japan, but China looms large in the background, as it does on all matters related to the “pivot to the East.”

The context for international relations is clarified in various writings that serve as background for those specifically on Asian themes. One theme is “universalism.”
The overall perspective in Russian publications is supportive of an interpretation of “universalism” in international relations much at odds with thinking elsewhere. The key word is “inclusive,” joining all internationally conscious states regardless of their ideology, social system, and regime type. Writing in Mezhdunarodnaya Zhizn’, Aleksandr Orlov argues that this has been the ongoing process since WWII, centered in the United Nations with other organizations built around this core, and the WTO follows this path. Yet, he argues that the United States, as it is losing its domination and faces coalitions for reform of international institutions is going in the opposite direction with pursuit of TPP, emphasis on democratic states together rather than the UN, spreading NATO, and working to exclude Russian athletes from the 2016 Olympics and, possibly, raising objections to the 2018 World Cup in Russia. This stems from belief in civilizational superiority, which has led at various times to Russophobia, Orlov explains. While not directly linking this argument to Russia’s policy toward Japan, which many place on the US side, or China, which is invariably viewed as sharing the same polarized worldview, Orlov presents what could be interpreted as a prism for views of Asia.

Japan-Russia Relations

Aleksandr Ilyshev-Vvedenskii wrote in Mezhdunarodnaya  Zhizn’ on the history of Japan-Russia relations, specifying various good moments of the past, such as 1702, 1855, and October 12-20, 1956 when diplomatic normalization was achieved despite the villainous US role in interfering with a peace treaty after pressuring Yoshida Shigeru to long oppose ties to the Soviet Union. The heroes in this story are the progressive forces in Japanese society, who resisted US pressure, and particular leaders such as Hatoyama and Mori, the fathers of prime ministers who were in charge of Japan in this century. In October 1956, Hatoyama’s talks in Moscow enabled Japan fully to return to the international family, and the Hatoyama dynasty is continuing now to support close bilateral ties and oppose Japan’s presence in the sanctions regime, says the author. The problem of US interference in Japan’s internal affairs lingers. The author explains that the transfer of two islands was always conditioned on the completion of a peace treaty, leaving unclear that for Moscow this meant no Japan-US alliance and neutrality in the Cold War and the development of all-around cooperation, which did not happen. The year 2016 could be auspicious, however, because it is at the end of a 60-year cycle—salient for Japanese—and could fit in a sequence begun in 1916, when the bilateral relationship saw marked improvement. Talks now rest on the 1956 base, explains the author, seeing an opening ahead.

Kirill Barskii in the same issue proceeds to lionize Evgenii Primakov for his efforts to improve relations with Japan, forging academic exchanges from the 1970s, influencing Nakasone by the mid-80s, leading Russian policy to pay more attention to Japan, working to ensure that Russia’s weakest link in G7 ties would be improved, visiting Japan as foreign minister in November 1996 and playing a big role in activating diplomatic ties, pressing for compromises on joint development that led to new approaches to territorial demarcation, and paving the way for intensive, productive talks to 2001. Such recollections build a foundation for diplomatic compromise under Putin and for making the historical case that Japan deserves to be seen as important to Russia.

On November 14 in Kommersant, Mikhail Korostikov asked how far Japan is ready to go for the sake of the return of its islands, commenting that Abe is doing everything to become a better friend of Russia in the East. He formed working groups weighing investment projects worth billions of dollars, as he attempts to get Putin to agree on December 15 to transfer four islands. (In this assertion, Korostikov is ignoring the compromises already on the table, leaving his readers more skeptical about Abe.)

Korostikov asks what will happen when this does not occur and whether Russia is still needed by Japan beyond the confines of the territorial question. The December visit acquires added importance, he adds, because it will be the first by a Russian president to Japan in 11 years, and Abe has long wanted to make this happen, even visiting Russia five straight times in defiance of the standard diplomatic etiquette of reciprocal visits. Abe has announced economic cooperation plans and, also in an unprecedented manner, appointed a minister just to develop economic relations with Russia, who on November 3-4 in Moscow advanced ideas said to be worth USD 15.9 billion. There has already been agreement on some 30 projects, two of which (improving the urban environment with a trial program for the city of Voronezh and increasing the productivity of Russian industry with 10-12 factories in line for application of Japanese management methods) have now been vetted with the rest awaiting finality at the summit. A new working group with nine vice-ministers has been established for economic cooperation. All of this, readers are told, is to end what Abe calls an “abnormal situation,” amid tight secrecy to prevent “unhealthy expectations.” These details indicate that much is happening, but not real optimism.

The article warns against views in the Russian media, which argue that Japan has changed its “national interests,” suggesting, instead, that Japan has not and may not be ready to sign a peace treaty without the return of all four islands. Korostikov even is suspicious about Japan’s silence about the notion it is buying the islands. It contrasts Abe’s declaration before the Diet that Japan-Russia relations are second only to Japan-US relations and are now the “axis of diplomacy and the guarantee of security,” with public opinion data that Japanese are alone in the Western bloc in feeling more negative to Russia than to Putin. Given the orientation of Japanese political circles to the United States, they are uneasy with the prospect of breaking the sanctions, Korostikov adds, citing an Asahi Shimbun editorial, that international law is not a subject for barter. Whereas some voices in Russia insist that Japan only imposed sanctions due to US pressure, the article cites Japanese Foreign Ministry officials as saying that Japan imposed sanctions over Crimea as a matter of principle. After all, Russia violated international law in 2014 just as it had in 1945 in seizing the islands from Japan, they assert. The article finds a Japan-US compromise in how the sanctions are handled, which means that Japan’s stance is not substantive in favor of Russia, as both allies saved face in managing their differences. This, clearly, does not bode well for Russia’s objectives in the ongoing negotiations with Japan.

Korostikov explains that ordinary Japanese do not understand why Japan is making “one-sided concessions” when Putin has not promised any improvement in relations or the return of islands in exchange for Japan’s investments. This is Abe’s personal project, and he will pay the price in his reputation if it should fail, some are saying. Already on October 3 former foreign minister Maehara asked if Abe was preparing to cut a deal for only two islands, and Abe responded that he intended to secure sovereignty over all four. This query is seen as a response to Suzuki Muneo’s media blitz to make the case for a “realistic position” of a two-stage approach with the claim that Abe shares his position. Korostikov says that this variant is close to but not identical to the 1956 Moscow position, leaving vague whether Moscow would accept continuing negotiations over to whom the other two islands belong. Finally the article mentions that Akitaka Saiko, former vice foreign minister, in an interview with Asahi Shimbun in early October said that he could not reveal the contents of Abe’s new approach to Russia presented in May, but he added that repeating the old way is not a path for moving forward. This may modify the piece’s pessimistic tone.

On November 2, Valentina Matvienko insisted that there is no basis for any negotiations over two or four islands and talks are not proceeding, denying various speculation to the contrary. The most that Japan could expect is a new variant of joint development of the islands and eased visa requirements, which Japan had rejected in the past. Yet, the Japanese public demands concrete results despite Abe underscoring that his policy is premised on 20-30 years of hard work. She notes that most Japanese regard Abe’s policy as one-sided concessions. If substantial progress is not seen on December 15, there will be talk that Russia has run away with Japan’s money, even if no money is actually committed. Still, she expects Abe to be saved since Japan’s opposition is unpopular. The article cites sources in Moscow familiar with the talks insistent that there are no reasons at this stage to transfer any islands. For there to be reasons, first, there must be real steps to normalize relations. (So far, almost all of the Japanese projects are just on paper. In earlier cases, projects failed due to change of administration in Japan or outcries from the United States). Second, for Russia it is important that there not only be economic cooperation but understanding that Japan will not coordinate each step with Washington, she remarks, suggesting that a geopolitical precondition exists. Abe is an anomaly, she says. The extreme pro-Americanism of Koizumi led to a shake-up in Japan’s foreign ministry and to the American school occupying all of the leading posts, while the Russian school was ousted. In mid-2015, the article adds, Abe similarly rotated personnel to put in charge of Russian relations persons neutral or friendly to Moscow, weakening the Foreign Ministry, which is more negatively inclined. Matvienko seems to doubt this will be lasting. This is another article in the recent backlash against optimism.

Two big problems have not been resolved, her article adds: 1) the possibility of stationing on the islands, should they be transferred, US military bases; and 2) what is the benefit to Russia of transferring the islands, when Russians are not moved by Japan’s arguments about 1945 and 1956 and consider the islands no different than Kaliningrad as fruits of victory in WWII. According to Vasilii Kashin, she asserts, the creative transfer of sovereignty can be accompanied by a variety of restrictions—demilitarization, autonomous government, and language policy. Even for that sort of transfer, political will is needed for which neither Russia nor Japan is now prepared. Russia would have to transfer the islands as a voluntary gesture of friendship, but that requires a different mindset by the Japanese people and elite, and the majority of experts in Russia do not see that radical shift happening. The article rejects the Sino-Russian 2004 agreement as a precedent, as many Japanese suggest, since Sino-Russian relations had reached a much higher level. Thus, a quick outcome is out of the question. Not Abe but Japanese society would—over an entire generation—have to adopt a pro-Russian outlook, and Russian officials would have to change the rules of the game for Japanese investors, who now complain of undefended property rights. A peace treaty without any territorial resolution would be the right sort of force for drawing the two countries closer, but Matvienko does not see that happening now.

In Kommersant on September 19, Aleksandr Panov argues that Japan’s “window of opportunity” has opened for Russia for a maximum of 2.5 years and wonders whether Russia will hurry to seize it. He describes cynical surprise at Abe’s Vladivostok performance, as many look for hidden motives without crediting Abe’s initiative properly. Panov links this to a contradictory image of Japan that has long prevailed. On the one hand, there has been admiration for Japanese culture, to which can be added satisfaction that as NATO moves troops to Russia’s border, Japan is withdrawing its forces from Hokkaido. On the other, there is a view of genetically hostile people from the time of the samurai. The war of 1904-1905 lingers in Russian minds as an example of Japanese treachery, starting it without any declaration of war. The battle of 1939 only reinforced this, and Japan’s adherence to the neutrality pact in WWII does not give them any credit because they really wanted to violate it. Andrei Gromyko’s memoires are in a similar vein. Japan was a partner of American imperialism and demanded territory from Russia. Panov repeats the story that Japan would have cut a deal for two islands in 1956, but US threats to refuse to return Okinawa dissuaded it. In essence, the ratified declaration of 1956 served as a peace treaty, he adds. Panov is clear about Moscow’s willingness to transfer two islands in 1992 and to recognize the 1956 declaration in 2001. He also notes Putin’s statement that the outcome should be a win-win result and that tete-a-tete talks are especially needed since China and the United States also are involved.

Readers not only learn that the territorial problem is the fault of the United States, but that Abe’s political worldview was formed under the influence of his grandfather, Prime Minister Kishi Nobusuke, nationalist and dreaming of freeing Japan from its defeat complex, while establishing a fully autonomous nation oriented to the realization of its national interests. Abe’s father’s legacy was to improve relations with Japan’s neighbor in Japan’s national interest. Moreover, already in 2006 this was Abe’s aim. Thus, one should not be surprised by Abe now. Economic cooperation is depicted as part of his political philosophy with trusted exchanges in the military sphere and a wider range of cultural ties. Panov makes the case that it is geopolitics as well as this legacy that is driving Abe: he favors a strong position for Japan in the Asia-Pacific region, allowing for a balance of forces in a quadrangle that includes Russia and relieves Japan of Chinese pressure and of the nightmare of an anti-Japan Sino-Russian alignment. Thus, Russia serves as the gateway to raise the status of Japan in the region.

Panov explains that Abe accepts the existence of two separate processes: talks on a peace treaty and economic cooperation, mutually connected. Abe has accepted the formula for resolving the territorial problem long advanced by Russia, he adds. First there must be all-sided development of relations to a new level, with an atmosphere of high trust, and then a way found for leaders to deal with the complex problem.

He rejects Russians who suggest that Abe is being duplicitous, insisting that the economic cooperation plans are of a maximally concrete character with a team to realize them.  Taking a cue from Russia’s stated desires, Abe is ready to assist in the industrial development of the Russian Far East, to help it to export manufactured goods to the region, and to modernize of its infrastructure. Further Panov reminds readers that almost all the big projects in the Russian Far East were realized with the help of Japan, i.e. Sakhalin oil and gas, the port of Vostochnyi, and Yakutsk coal.

Abe is also credited with declining the advice of the White House not to break “Western solidarity” toward  Russia as it  prepares to leave the Western sanctions regime. Although Panov is uncertain what will happen on December 15, he praises the two leaders as eager for a deal and he stresses the value of Russia gaining a partner that is third in the world economically and able to strengthen Russia’s position in the Asia-Pacific region. Such optimism contrasts with Panov’s pessimism on November 17, writing in Mainichi Shimbun. Lowering expectations was the priority by then.

Sino-Russian Relations

A. S. Skriba examined ties between the EEU and SREB, starting with recognition that in May 2015 Putin and Xi had agreed to avoid unnecessary competition by linking these regional groups, but adding that the process has slowed and how dialogue should proceed between the EEU and China remains unclear. Time is being lost, and others may use this situation for their own interests, readers are told. The article proceeds to discuss the challenges being faced. Despite great promise, there is no model for how to proceed. Since there are no deep or antagonistic contradictions between Russia, China, and the Central Asian states, linkages appear to be within reach; so the above pessimism is tempered.

Skriba suggests that Moscow gained from the agreement in May because China pledged to include it in discussions about Sino-Central Asia plans. Most important, by agreeing, Russia will avoid problems with China’s regional group—the Silk Road Economic Belt—such as the ones it has with the European Union. Russia also had its status as an influential player in Central Asia confirmed while keeping its authority in the EEU. Working together, Russia and its partners would increase their voice in dialogue with China. Yet, Skriba acknowledges a contradiction, since Russia was proceeding through bilateral talks with China, not with coordination inside the EEU.  This was to be corrected with the involvement of the Eurasian Economic Commission, but the initial plan for a roadmap did not materialize, Skriba notes, and the EEU still has not held political dialogue on these matters. Meanwhile, trade with China was declining not just in money but in material terms. Thus, the article suggests that China is not the answer to Russia’s economic needs and its Eurasian integration aspirations.

In Vestnik Mezhdunarodnykh Organizatsii, no. 3, 2016, the EEU-SREB linkage is further explored with words of caution. It reports that the Chinese themselves stress that SREB is not intended to create a sphere of influence, i.e., SREB is basically an economic project aimed at accelerating the development of the western provinces of China and forming close economic, political, and humanitarian relations between regions (the EEU and China). Some Russian specialists agree that, if the political situation in SREB persists, then it will not be aimed directly against Russia.  However, the author observes, the absence of political intentions does not mean that economic expansion is not followed by the expansion of China’s influence in the region. Conducting a peace-loving foreign policy, China already has reached the point where its interests have begun to intersect with Russian ones in the “zone of privileged interests.” So far, China does not want to replace the EEU; however, new economic possibilities will oblige the central elite to reconsider. China is already aware of alternatives. The EEU is an artificial formation, and many in China already regard it as a sign of Moscow’s desire to monopolize the integration of Eurasia. In Chinese understanding, integration demands a serious economic foundation, while the EEU relies mainly on historical and cultural cooperation. Russia is, thus, unable to make this into a region. At the same time, Russians are asking about the unspecific nature of the concept of SREB and wonder if it will lead to new institutions or a unified free trade zone with China having the leading role, putting Russia’s political position in Central Asia in doubt. The article views China’s approach as a main challenge in converting economic power to political power.

While 2014 was a disastrous year for Russia, the idea that either China or the EEU is the answer is downplayed. Rather than salvation, what is achieved is stabilization of Russia’s flank, some economic compensation, and bright prospects for geo-economic changes to match geo-political ones, including through new routes to Iran and India as well as China. Russia has counted on the EEU to balance China, but it lacks credits, investments, and markets to integrate the EEU. Even so, it can still lead Central Asia in joint negotiations with China, and it has leverage with China, which needs Russia as well as political and military stability to its west against the United States and its allies and partners in East Asia. Thus, the case is made that the relationship with China is not one-sided and the EEU-SREB linkage is only part of Greater Eurasia. The expanded range of imagery puts less emphasis on Sino-Russian relations as the key.

Another type of reassurance is that even if SREB has a clear political significance, it is versus the West, not versus Russia, and is different from the EU regional policies. It is not a geopolitical instrument. China’s inclination to two-sided dialogue can interfere with Eurasian integration. Devaluation of the ruble has made Russian goods more competitive on the Chinese market and in Southeast Asia. The value of SREB is that it can provide much-needed financial investments in local production in both central and eastern Russia, while also boosting Russian transit and infrastructure.

The “turn to the East” rarely figures into the work and even the planning of Russian ministries, suggesting that the main problem is the lack of preparedness of Russia’s elite, who have the psychological discomfort of seeing their country included in a Chinese megaproject. To the extent that relations are normalized with the European Union, the turn to the East could begin to lose its priority and then the EEU and SREB would fall into disorganization. The article adds that even if the EEU is more popular in Central Asia than in Eastern Europe, Russia’s economic setbacks have reduced its appeal. The privileges that interested Russian partners are less visible. They already have full access to the Russian market. They see more integration as a threat to their own sovereignty. They are less dependent on Russia given the role of China’s capital and their direct talks with China on the SREB. Yet, Chinese firms hire few local workers and cause environmental damage, causing Central Asians to hesitate about leaning to China. They also seek to keep their options open with the United States and the EU. The article concludes that joining the EEU and SREB only has a narrow economic focus, but talks are irregular and not broadly oriented, posing many challenges.

Vitalii Vorob’ev writing on September 8 in Rossiya v Global’noi Politike looked back at two decades of Sino-Russian cooperation, which keeps broadening and constantly is advancing. He predicts strengthened ties ahead, especially in trade as big projects go forward, which have been stalled due to international payment issues. These problems should not be blamed on either side, while the two states can move on to other arenas, such as agricultural and linking the EED and SREB. After all, US insistence on being a superpower, containing both Russia and China and dominating the world, drives Russia and China closer. They seek to reform the existing world order, which Washington opposes. Yet, Vorob’ev recognizes that the economic crisis has hit Central Asia hard, and Moscow and Beijing must not let the countries of Central Asia feel marginalized as the SCO expands and they work together. Otherwise, their desire for multi-vector relations could open the door for US interference, just as control of North Korea could serve as a US pretext for trying to undermine North Korea. He adds that the United States benefits from alienating Japan from China and Russia over territorial issues.

On October 24 in, Ambassador Andrei Denisov discussed Sino-Russian relations, calling them better than ever before. There is a high level of trust and common interests, but Denisov notes that it is not a romantic union of one heart but a calculated marriage, strong on that basis. The Chinese do not practice charity. About a year ago, Russian businessmen had the impression that they could go with open pockets, and the Chinese would fill them with money. Now there is a more sober approach, cognizant of the fact that the Chinese are not inclined to take risks. When asked to invest in Russia’s new special zones, they respond with the query, “Have Russian companies already invested there?” They add that they will watch to see whether the Japanese and South Koreans do so. Denisov was also asked about the sharp rise in hackers’ attacks on Russian targets, responding that Russia also is accused of this and answers that they do not come from the government. How can Russia now blame the Chinese government? He adds that he is convinced it is not the government.

In Kommersant on October 7, Alexander Gabuev focused on the talks regarding the economic partnership of the EEU and China with the objective in November of having a basis of agreement for establishing an FTA. He cited Igor Shuvalov, first vice-premier, as saying this could lead to a bilateral agreement of only Russia and China enshrined in a document within two years—a big change from expectations over the summer that as many as 10-12 years would be needed, as is customary in such complex agreements. Signals from above have accelerated the pace, Gabuev observes. Given the rush, it is simpler to push for a bilateral deal. Discussing ongoing efforts to establish an FTA between the two, he reported that leaders have pressed for accelerating the timetable to get a deal before the Russian presidential elections and the Chinese party congress. Given the rush, bilateral talks are expedient (not EEU coordination), which may mean a deal only on trade in services since the Eurasian Economic Commission now has authority over trade in goods. Yet, the money involved is only USD 3.5 billion. Gabuev expressed concern, however, that the Russian negotiators lack experience and that China has curiously asked Russia to prepare the first draft. He is clearly doubtful that this will go well.

Ivan Safranchuk in Rossiya v Global’noi Politike on September 25 poses three choices for Central Asia: Russia, China, or the United States. Following the Ukraine crisis, these states have shifted to seeking geopolitical balance, suspicious of all these choices. Kazakhstan and Kyrgyzstan now refuse to make a choice, he adds. Fearing that the US notion of a “new silk road” targeted against Russia would find common ground with SREB, Russia joined its plan with China’s. Still, Safranchuk is uncertain where China will go, even if Sino-Russian talks are further ahead. Given US soft infrastructure assets and China’s physical assets, China may find complementarity a plus. He sees Central Asian states as needing an outside center. If the greater West is chosen—including South Korea and Japan—, technology would be advanced, but the US priority for the region is low and the states would not get much and also pay a big geopolitical price. If China is chosen, it would prefer to invest in its own west and also would not offer what the region needs. Yet, Russia does not have time on its side. It can help protect the old economy at home and in the area for a generation, the new reality is reduced demand for oil and gas, less labor-intensive production, and a declining market for unskilled labor. As manufacturing increasingly returns to developed countries, the choices for Central Asia will not be easy.