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Japan’s embrace of Russia under threat with Ukraine crisis

by Aaron Sheldrick

Reuters

Russia’s incursion into Ukraine is setting off alarm bells in Tokyo, where officials worry that any push by the nation’s Western allies to impose economic penalties will undermine its drive to improve relations with Moscow.

While U.S. President Barack Obama and other Group of Seven leaders of advanced economies talk of sanctions or other punitive responses, Japanese officials say ties with Moscow remain on track.

There has been no change in the direction of economic and resource diplomacy between Japan and Russia, trade minister Toshimitsu Motegi said Tuesday.

In reality, “they are in a state of shock”, one diplomatic source close to the situation said, referring to Japanese officials. “It is a big pain in the back for the Japanese government.”

Closer ties are being driven by mutual energy interests, as Russia plans to at least double oil and gas flows to Asia in the next 20 years and Japan is forced to import huge volumes of fossil fuel to replace lost energy from its nuclear power industry, shut down after the March 2011 Fukushima disaster.

“If Western countries come together and agree to take action such as imposing economic sanctions, we may be affected,” said a senior executive at a Japanese company involved in the energy sector in Russia.

“We don’t know what will happen at the moment, but I am afraid the energy sector usually gets a lot of attention.”

Prime Minister Shinzo Abe has made better ties with Moscow a priority since returning to power 15 months ago and has met President Vladimir Putin five times despite the territorial dispute dating from World War II.

By contrast, Abe has not met either of the leaders of neighboring South Korea or China. Tokyo is embroiled in disputes over uninhabited islands and wartime history with both countries.

Russian forces seized Crimea, an isolated Black Sea peninsula with an ethnic Russian majority, without firing a shot following the ousting of the pro-Moscow Viktor Yanukovich as Ukrainian president last month.

All eyes are now on whether Russia makes a military move in predominantly Russian-speaking eastern Ukraine, where pro-Moscow demonstrators have marched and raised Russian flags over public buildings in several cities in the last three days.

Following his return to power in December 2012, Abe has traveled extensively, pushing for expanded trade ties and investment for Japan as he attempts to jolt the country’s economy out of more than a decade of stagnant growth.

Russian ties have been a major focus of that diplomatic effort and Abe’s visit to Moscow in April last year was the first by a Japanese prime minister in a decade. He has met Putin more than any other leader, the Foreign Ministry confirmed.

Abe attended the opening ceremony of the Sochi Winter Olympics last month, while Obama, French President Francois Hollande and British Prime Minister David Cameron stayed away. While there, he announced a visit to Japan by Putin in the autumn.

Foreign Minister Fumio Kishida still plans to visit Russia this spring, the government said Monday.

Official comments by Japanese officials have stressed the need to respect territorial integrity, softer language than Tokyo signed up to in a G-7 statement on the Crimean situation Monday. G-7 leaders pulled out of talks on a G-8 summit in Sochi, according to the statement.

“As a G-7 member, we agreed on the statement. Japan is hoping that the situation will improve following the statement,” Chief Cabinet Secretary Yoshihide Suga said Tuesday, when asked about differences in the statement and Kishida’s comments on the crisis.

Japan has a lot at stake. An agreement on the islands northeast of Hokkaido seized by Russia with the eviction of 17,000 Japanese would involve a peace treaty, after the two sides failed to formally close the war in 1945, and pave the way for closer energy ties.

A dramatic transformation is underway in Russia’s energy sector, with oil flows being redirected to Asia via the East Siberia-Pacific Ocean pipeline and Putin pushing for more gas sales to reduce Moscow’s reliance on Europe.

Japan now consumes a third of global liquefied natural gas (LNG) shipments, and purchased 10 percent of its supplies from Russia’s east, which lies on Japan’s doorstep.

Oil imports from Russia rose almost 45 percent in 2013 and accounted for about 7 percent of supplies to the world’s fourth-biggest crude importer.

With all the country’s nuclear reactors shut down and no timetable for restarts, Tokyo is desperate to diversify and slash costs of energy imports and Japanese companies are involved in Russian projects to export more gas in liquid form.

“A worsening relationship between the U.S. and EU with Russia may damage Japan’s ongoing improved dialogue with its closest neighbor if economic, trade, or banking sanctions follow,” said Tom O’Sullivan, founder of Independent energy consultancy Mathyos Japan.

“This could impact Japan’s gas and oil imports from Russia as well as investments in upstream energy assets at a time when Japan’s energy security is still threatened due to the continued closure of all of its nuclear power plants.”

  • Frank Schirmer

    The LDP and Russia’s Putin are a very good fit. It’s a shame they are always troubled by those Western countries…