business

Japan nudges wary firms to invest in Russia to help resolve islands dispute

14 Comments
By Takashi Umekawa and Linda Sieg

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14 Comments
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The Japanese government can have no rational expectation of effecting any change in the islands status. This Island rubbish is for the Japanese domestic market only. As the US retreat from the world gathers pace it will become ever more important for Japan to have any friend of China that is willing and able to put in the occasional good word on Japan's behalf..

0 ( +4 / -4 )

The Russians will never peacefully return the Northern Islands back to Japan, just as the Russians will never return Crimea back to Ukraine. Unless Japan were to take them back militarily, otherwise, it just ain't gonna happen.

Forget about it.

0 ( +5 / -5 )

Abe is betting it "...could set the stage for progress in the dispute..." So what exactly does he get back in return for risking other people's money? Sounds like a fool's bet to me.

1 ( +3 / -2 )

Rule number 1...don't invest in a mafia infested country. Rule number 2...it ain't gonna happen.

2 ( +5 / -3 )

@stormcrow. 100 percent correct! Russia is playing Japan.

1 ( +4 / -3 )

samwatters: "@stormcrow. 100 percent correct! Russia is playing Japan."

EVERYONE is playing Japan -- just look at the line up to come here and collect hundreds of billions. With Russia, though, they are laughing pretty hard. Now Abe is pushing companies to risk losing investment over islands that they will NEVER get back! The guy is a mad man!

1 ( +4 / -3 )

@Smith and Pukey2. Well put!

-1 ( +1 / -2 )

Russia and Japan should return the Islands to the indigenous family people. These islands should not be in the hands of either country. Yet, protection rights can be applied. Outsider intervention has always been the issue of conflict as the local population has been forced to contend with all nations with interest. If the indigenous areas remain so, and out of the hands of other nations;- peaceable trade can still be maintained.

-1 ( +1 / -2 )

i now pronounce a prediction: japan will invest money, loose it all to the russian mafia gov, and be denied the islands forever and ever. because russia knows it has you by the bolls

0 ( +2 / -2 )

But Japanese corporate concerns about an unpredictable investment environment in Russia

Very strange. A year or two ago on a business event here in Tokyo I met a guy from MItsubishi motors, who said me that Mitsubishi had a plant in Russia, in Kaluga region, producing Pajeros if I remember correctly, and that they had exellent relations with local authorities and never experienced any trouble, legal or whatsoever. My close friend works at Sojitz, they finished a fertilizer plant in Russia a year ago, the project was very successful and from the next year they are going to build a second plant.

If Japanese companies can work in China (I've heard that at least half of Japanese companies there run into serious trouble) they can work in Russia.

0 ( +3 / -3 )

Habomai islests and Shikotan would be back to Japan. Those are nfortunately not to be returned but purchased back.

Diplomatic haggling going on over Kunashiri and Etorofu between them. I am just thinking.

-4 ( +0 / -4 )

Invest in Russia? Start doing it in the Kuirls, which will always be Russian.

-1 ( +1 / -2 )

Asakaze

Trade has been going on between Japan and Russia for a long time. Even before the 1990s, when the Cold War officially ended. it has expanded, but not by much really, all things considered. And in the middle of various disputes and even sanctions, a lot of Japanese companies operate there. Think of NASA and the Russian space establishment. Life goes on at ground level.

Here is the problem. At the highest levels, Japan has been burned any which way by investment in Russia. Sometimes the Japanese party has been flat out ripped off. Sometimes, sanctions and corruption have come along and wrecked large projects and plans. Sometimes markets (raw materials prices fluctuate a lot) have gone the wrong way and ruined deals. Throw in the very strong diplomatic power of the US on Japan, the inability of Japanese companies to insure themselves against risk, and the very poor markets and market growth in Russia and WOW WHO NEEDS THE HEADACHE?

Clearly some people can handle it. But most people just shrug and deal with Mexico or Australia instead. I sure would. I would sooner do business in Birmingham AL or UK. Or St. Petersburg Florida or Moscow Idaho.

More than anything, people make the mistake of thinking that Russia is some big deal. Its population is only a bit larger than Japan's, its non-fossil fuel economy is about the size of Tohoku's, and its Asian resources are only a fraction of its economic output. If you were an investor, couldn't you think of 10 countries you would rather do business with? I could. Just for grins, consider that even Donald Trump, with all his bluster about companies leaving the US, would have to acknowledge that they don't go to Russia. Why is that? And why would Japanese companies go there if US companies won't?

Despite all that, hope springs eternal, and one would like to live in a world where Putin and Abe will bury the hatchet and usher in a new era of mutual prosperity and friendship full of opportunities for all! What do you think? Do we live in that world? How much of YOUR company would you bet on that? And that is where we are. People will post here on JapanToday about "how much Japan needs Russia" or some such nonsense, but business owners know better. They are being begged to deal with Russians, and they are taking a pass.

I give Abe snaps for putting a brave face on and doing his duty. I believe strongly that Putin and Russia will "never" get a better deal, so they ought to give way beyond what Japan asks and make a grand gesture. But that would require that Putin and Russia act outside their historical centuries-old box. So it won't happen. Japan is far-sighted and Russia is near-sighted. They need to switch glasses. But Putin would sooner grab both pairs and run away.

1 ( +1 / -0 )

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