Prime Minister Shinzo Abe and his Russian counterpart, Vladimir Putin, praised the launch of several new economic projects on Saturday in Osaka, but failed to reach any major breakthrough in a long-standing territorial dispute — a huge setback for Abe, who has invested a significant amount of political capital in the issue.

In a news conference after the meeting, conducted on the sidelines of the G20 summit, Abe said the two agreed to “continue negotiations” over the dispute of the Russian-held islands off Hokkaido, called the Northern Territories in Japan and Southern Kurils in Russia.

Abe, however, didn’t mention any specific progress in the territorial talks, merely saying “the outline of the issues we should overcome are now becoming clear” — almost the same phrase used by Foreign Minister Taro Kono after he met his Russian counterpart, Sergey Lavrov, on May 31 in Tokyo.

Putin hailed some of the ongoing joint economic cooperation projects of the two countries. But on the territorial row, the Russian leader only said those projects will build up mutual trust and help prepare a good environment for the negotiations.

The prime minister, who had been trying to reach an agreement with Putin in time for the Group of 20 Osaka summit, has met with the Russian leader as many as 26 times so far, an unusually high number.

Ahead of the meeting, Japanese officials were already striking a pessimistic tone, saying the two sides have yet to agree on the most fundamental issues.

Russia has insisted Moscow legitimately won the four islands off Hokkaido as a consequence of World War II. Tokyo, meanwhile, has argued the islands have been “illegally” seized and occupied by the Soviet Union and Russia.

Why has Abe’s plan fallen through so far? Observers point to two likely reasons. For one, Putin’s approval ratings have fallen rapidly in the past year as a result of hugely unpopular pension reforms, which has made it almost impossible for the Russian leader to make any major concessions to Japan. Any territorial issue could easily fan nationalistic sentiment in Russia.

In addition, Putin may not have intended to return any of the four islands — the Habomai group of islets, Shikotan, Etorofu and Kunashiri — in the first place.

Putin instead just tried to take advantage of Abe’s long-held wish to sign a peace treaty in order to win economic cooperation from Japan, some observers say.

“It seems Putin doesn’t have any intention to return even one of the islands,” wrote Hiroshi Kimura, professor emeritus of Hokkaido University, in a Sankei Shimbun column on June 21.

“But Putin hasn’t refused to have contacts with Japan. Why? Putin is trying to use an improved relationship with Japan as diplomatic leverage against the U.S. and China,” he wrote in the paper.

The prime minister’s eagerness to win some of the islands back goes a generation to his father.

His wish originated from the late Shintaro Abe, who served as foreign minister. When the elder Abe was a reporter at the Mainichi Shimbun, he wrote a scoop on the 1956 Tokyo-Moscow joint statement, under which the then-Soviet Union pledged to hand over two of the islands if a postwar peace treaty were ever to be concluded between the two countries.

“Ever since then, the conclusion of a Japan-Soviet peace treaty was the lifework of my father,” Abe said in a 2016 interview with the Tass news agency.Shintaro, who died of pancreatic cancer in 1991, had tried to resolve the territorial despite his illness. After witnessing his father’s determination, Abe decided to become a politician, he said in the interview.

But with no prospect of a peace treaty, Russia has been beefing up its military presence on the disputed islands.

In an interview aired on June 22 by Russian state-run television, Putin emphasized that Moscow would continue promoting the development of the islands.

Asked if some day Russian children on those islands would need to pull down the Russian national flag, Putin flatly answered, “No, we don’t have any plan like that.”

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