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. Last Updated: 07/27/2016

Japan Sees Hope in Island Dispute

NOVO-OGARYOVO, Moscow Region — Japanese Prime Minister Yasuo Fukuda and President Vladimir Putin agreed on Saturday to expedite talks to resolve a decades-old territorial dispute by issuing "fresh directives" to their respective governments, Japan's Foreign Ministry said.

Fukuda is the first Japanese prime minister to visit Putin's official residence outside Moscow, a venue seen by some as more prestigious than the Kremlin and a gesture that the Foreign Ministry said Fukuda appreciated.

Following the talks, the two governments agreed to jointly explore oil and gas in Siberia in a five-year, $96 million project.

Making his first visit to Russia since his election last fall, Fukuda sought to establish a good rapport with Putin and his successor, Dmitry Medvedev, and to secure their support for the upcoming Group of Eight summit on Hokkaido in July.

Moscow's refusal to return a chain of islands seized during the last days of World War II has prevented the two countries from reaching a peace treaty. The islands are known as the Southern Kurils in Russia and the Northern Territories in Japan.

"We are continuing our dialog on a peace treaty and creating the necessary conditions to advance in this direction," Putin told Fukuda at the start of the talks Saturday.

Putin did not elaborate in front of reporters, but he added that "a lot of unresolved problems" remained between the two countries despite an improvement in ties in recent years.

Fukuda, who nodded frequently as Putin spoke, thanked the president for his personal role in promoting ties and said he wanted to deepen cooperation in the Pacific region.

It was unclear to what extent the dispute over the islands was discussed.

Putin's spokesman Alexei Gromov told reporters that the territorial issue was not discussed in detail. But Japanese officials appeared to have interpreted the talks in a more positive way. 

"With respect to the territorial issue, I believe we will be able to secure a positive direction," Fukuda said after separate talks with President-elect Dmitry Medvedev at his official residence outside Moscow, Maiendorf Castle, Reuters reported.

Kazuo Kodama, a Japanese Foreign Ministry spokesman, told reporters late Saturday that Fukuda and Putin had agreed to "issue fresh directives" to their governments to expedite talks on the islands to elevate bilateral ties to a new dimension. Kodama did not elaborate, and it was unclear whether the agreement between the outgoing Russian leader and the Japanese prime minister, whose support at home is faltering, would bear any fruit.

Japan has said it wants back all four islands — Kunashir, Iturup, Shikotan and Habomai — but Moscow is not ready to give them up. Tokyo maintains that a peace treaty should be in place for ties to be taken to a new level.

But some Russian observers believe no peace treaty is needed because economic ties are booming anyway.

"In the great scheme of things, Russia doesn't need the peace treaty," said Valery Vinogradov, the point man on Japan within the Russian Union of Industrialists and Entrepreneurs, the big business lobby group. "It wouldn't change anything in the current state of affairs," he said.

In the most recent example of increased cooperation, the governments agreed Saturday to cooperate on oil and gas exploration in eastern Siberia in the first project of its kind, said Kodama, the Japanese Foreign Ministry spokesman.

Japan Oil, Gas and Metals National Corp. and Russia's Irkutsk Oil will jointly explore oil and gas deposits 1,000 kilometers north of Irkutsk and 150 kilometers from the East Siberia-Pacific Ocean oil pipeline, which is under construction, the Japanese company said in a statement. The two companies have set up a joint venture in which the Russians have a 51 percent stake. They will jointly invest 10 billion yen ($96 million) in the project, which will initially span five years, Kodama said.

Trade between the two countries grew about 65 percent to $20.1 billion last year, and Japanese total investment totaled $3.1 billion as of late 2007, according to Kremlin figures.

In March, state-owned nuclear energy company Atomenergoprom and Toshiba agreed to build power plants and produce atomic-reactor fuel.

Several Japanese carmakers, including Toyota, Suzuki and Nissan, have built or are building plants here. Oil deliveries from Sakhalin to Japan totaled 6.8 million tons last year, and deliveries of liquefied natural gas to Japan will start no later than 2009, the Kremlin said.

Kodama said the conclusion of the peace treaty was needed, and its absence was a reason why an agreement to develop the Far East and Siberia had not gotten very far.

The Japanese government appeared to interpret the choice of the Novo-Ogaryovo residence for the meeting as a positive sign. "It's indeed the first time that the Japanese prime minister was invited to the official residence of a Russian president, " Kodama said. "The prime minister appreciated such a gesture."

Putin and Fukuda were initially scheduled to meet at the Kremlin.

Putin has held numerous meetings at Novo-Ogaryovo, and he presided over a Security Council meeting here immediately before his talks with Fukuda on Saturday.

In other issues, Russia and Japan agreed to "drastically" expand youth exchanges to 500 people a year and cooperate on climate change after the Kyoto Protocol ends in 2012. Fukuda also "requested to exercise Russia's influence over North Korea on all issues, including the issue of abduction" of Japanese citizens, Kodama said.

Fukuda's meeting and a subsequent lunch with Putin lasted for two hours, and the talks with Medvedev went for about an hour. Before his meetings with the Russian leaders, Fukuda visited a Japanese festival at a Moscow school where the students showed off their knowledge of Japanese and sang songs for him, Kodama said.