Breakthrough in Japan, Russia islands row eludes Shinzo Abe, Vladimir Putin

Japanese Prime Minister Shinzo Abe and Russian President Vladimir Putin wrapped up two days of talks on Friday, with numerous economic deals but no big breakthrough on a territorial row that has over-shadowed ties since World War Two.

Abe and Putin agreed to launch talks on joint economic activities on disputed islands at the centre of the territorial row as a step toward concluding a peace treaty formally ending World War Two, the two sides said in a joint statement.

The islands in the Western Pacific, called the Northern Territories in Japan and the Southern Kuriles in Russia, were seized by Soviet forces at the end of World War II and 17,000 Japanese residents were forced to flee.

The dispute over their sovereignty has prevented the two countries signing a peace treaty.

Abe said he and Putin had taken “an important step” toward a peace treaty but concluding one would not be easy.

“The issue won’t be solved if each of us just make their own case,” Abe said at a news conference with Putin.

“We need to make efforts toward a breakthrough so that we don’t disappoint the next generation. We need to set aside the past and create a win-win solution for both of us.”

Putin dismissed the notion that he was only interested in getting economic benefits from Japan.

“If anyone thinks we’re interested only in developing economic links and a peace deal is of secondary importance, that’s not the case,” he told the same news conference.

“For me, the most important thing is to sign a peace agreement because that would create the conditions for long-term co-operation.”

As the two leaders held their second round of talks on Friday, right-wing activists in trucks mounted with loudspeakers circled the streets not far from the prime ministers’ office, blaring “Return the islands” and “Putin Go Home”.

Abe has pledged to resolve the territorial dispute in the hope of leaving a significant diplomatic legacy and building better ties with Russia to counter a rising China.

He had hoped the lure of economic cooperation for Russia’s economy, hit by low oil prices and Western sanctions, would pave the path for significant progress on the dispute.

Putin, however, would risk tarnishing his domestic image as a staunch defender of Russian sovereignty by compromising.

Japanese opposition politicians were quick to criticise the talks.

“How is this economic cooperation and these joint economic activities going to lead to a settlement of the islands issue?” said Ren Ho, head of the main opposition Democratic Party.

“Concerns that economic cooperation will bilk Japan remain, and that no concrete way to make progress on the islands issue was found is really too bad,” she added in a statement. Russian officials said the two sides had signed a total of 80 documents, including 68 on commercial matters, during Putin’s visit, including private-sector deals.

The Japan Bank for International Cooperation and the Russian Direct Investment Fund signed an agreement to set up a $1 billion investment fund to promote economic cooperation between the two countries.