If the end of the Cold War has changed the context of Russo-Japanese relations, why do Japan and Russia remain prisoners of the Cold War? In the post-Cold War environment in particular, numerous reasons for bringing the Kurile Island dispute to an end exist, including (1) pressure from the international system, (2) the decreased military importance of the territories, (3) economic and political incentives for policymakers, (4) economic incentives for business, and (5) good-will incentives.

The post-Cold War environment has revived old pro-settlement factions and created new ones. Visa-free exchanges and educational exchanges, forbidden during the Cold War, have now begun to create personal friendships which make the conflict seem obsolete. Business groups that had no chance for investment and therefore might have been more silent during the Cold War are growing more vociferous in their desires to remove political obstacles to trade.

However, one of the strongest pressures to resolve the conflict comes from the international system. With the end of the Cold War, many long-standing, heated disputes are finally being pushed, however haltingly, towards a resolution. East and West Germans demolished the Berlin Wall together, Ireland and Britain are inching towards the peace table, and even in the Middle East, peace negotiations are finally underway for the Israelis and Palestinians. In Confronting the Costs of War, Michael Barnett illustrated the way in which the international system can exert tremendous pressure on nations to seek peace. Strikingly, however, Japan and Russia do not seem to be making any significant strides towards peace and territorial resolution of the Kurile Islands dispute. Why does the Northern Territories problem seem to remain a virtually intractable issue in the post-Cold War era?

Related to this change in the international system is another pressure that would seem to indicate that the conflict should be moving towards resolution: the decrease in the military value of the islands for both Japan and Russia. For Japan, compromise and settlement on the islands would seem logical as it would secure peaceful relations with an unstable neighbor state which possesses one of the most powerful nuclear arsenals in the world. For Russia, now that it is joining the Start III Treaty and disbanding much of its military in search of a peace dividend, maintaining an out of the way listening post in the Northeast Pacific seems less important to many factions than such a strategy did in the Cold War.

Empirical data supports both claims, particularly reports of stronger Japanese military maneuvers and Russian military withdrawals. Japan has shown its disregard for the military value of the Kuriles by increasing its own forces in the region, an action Japan would never take if the Kuriles military salience was not in decline. With the United States, Japan has initiated a ballistic missile defense and theatre missile defense program that is symbolic of Prime Minister Keizo Obuchi’s hawkish stance on building Japan’s military into a more active force.

Russia, on the other hand, has not only ignored Japanese military build-ups, but has significantly reduced its forces in the Kuriles, corroborating the decreasing significance of the Kuriles which makes a resolution more likely. Shortly after taking office, Yeltsin committed to a troop withdrawal from the Northern Territories, a 30% reduction bringing the total military forces down to only 7,000, from a Cold War high of nearly 15,000 troops. Both scholars and local officials support this evidence of the decline of the territories military importance. Japanese Maritime Self-Defense Forces (JMSDF) Chief of the Sakhalin region, Mr. Karashima, indicated that the most significant problem the patrols encounter in their jurisdiction is now drunken crab-sailors ramming other boats, whereas in the past there used to be submarine encounters. Similarly, in Nemuro City, located directly across from the Kuriles Islands and even more a focal point of Russian military monitoring during the Cold War, incidents have plummeted. The JMSDF Chief in Nemuro also indicated that submarine incidents were now virtually non-existent, in contrast with the situation during the Cold War. Moreover, whereas during the Cold War there had been significant problems with Russian patrol boats ramming and apprehending Japanese fishing vessels (often engaged in poaching and sometimes in spying), Russian patrols now apprehended more Russian boats for poaching in their own waters. Corresponding to this evidence of a decrease in military significance of the Kurile Islands to Russia is the dramatic drop in the number of deaths, incarcerations and property seizures by the Russian patrols since the end of the Cold War. From 1946 until 1998, a total of 1,311 boats and 9,301 people had been captured in the waters between Nemuro and the Kuriles. (Of the people, only thirty were never returned, mostly because of drownings when their boats were caught by the patrols or in injuries sustained in the pursuits.) In 1993, one person was injured in the leg, in 1994, one person was injured, another was killed and one boat was captured, in 1996, one boat was taken and two were slightly injured, in 1997 two people were injured, in 1998 five boats were captured and in 1999, already three boats had been captured. The dramatic decrease in clashes between Japanese vessels and Russian patrols clearly indicates that the Kuriles are less militarily significant. Such a decline in strategic importance makes the refusal of either side to compromise on the Kurile settlement all the more puzzling.

Not only has the post-Cold War economic environment changed, both policymakers and local business owners have significant reason to push for a settlement on the Kuriles. As Mr. Suzuki, owner of a prosperous watch shop in the small town of Nemuro confessed confidingly, it would be much easier to do tremendous business with Russia, if only the territorial matter were solved. But, as a citizen of the town closest to the disputed territories, in which over five thousand former residents live, it would be insensitive as well as politically suicidal to argue with the position of no economic investment until the territories are returned. The Mayor of Nemuro and the Chairman of the Chamber of Commerce echoed the same sentiments. They were paying scrupulous attention to the lucratively profitable opportunities in the development of Sakhalin oil and seemed to wish that it were possible to become involved, but until the territorial dispute is solved, investment in Russia by Nemuro city is out of the question. Indeed, it is the Nemuro City International Section that is still sponsoring nationwide marathons to publicize the territories, while also lining the popular tourist route to Japan’s easternmost cape with signs proclaiming "Return Japan’s Northern Territories." During the City festival, volunteers stage massive political demonstrations as well.

Other regions of Japan, having less political motivation to resist the temptations to invest, have undermined the central Japanese policy of using economic aid as incentive to return the islands and are proceeding full bore with trade. In Wakkanai, 90% of the local economy revolves around the crab trade. The investment in Sakhalin oil is only likely to increase dependence on trade with Russia in this northernmost region of Hokkaido. In this small town of roughly 50,000, many jobs depend on Russo-Japanese trade. Up to 400 Russians a day stop at Magasin 928, a store which caters to Russian sailors, who sell their crabs and then use the same money to purchase a variety of items. One leather coated Russian customer casually opened a wallet with a one-inch stack of the equivalent of $100 dollar bills. The wealthy buy television sets and video-cameras, other more moderate customers buy generators, toasters, cassette tapes and gasoline. For the middle-aged female Japanese clerk and the store manager, clearly even the territorial dispute could not induce them to forego such profitable trading opportunities.

The President of Shyogen International is actively targeting the new and growing market. In the euphoric period of improved Russo-Japanese relations immediately following the Cold War, this company operated a successful wholesaling operation in the Russian Far East. The collapse of the ruble destroyed this fledgling enterprise, but their Wakkanai store normally serves up to 100 Russian customers a day during the peak season. As the President indicated, when the Sakhalin gas poject begins to make money, Shyogen International intends to be present, regardless of the status of the Northern Territories. As with the rest of the business commuity in Wakkanai, naturally, this means that the central government is under increasing pressure to solve the Kurile problem.

The same initiative to shatter the stasis also comes from local government and private business. The largest and most powerful Japanese companies are entering the race to develop Sakhalin, with Itochu, Mitsubishi and Mitsui investing billions of dollars in the new oil fields. Wakkanai City itself also owns a 20% share of a company created to support oil production, which began only as recently as July 1999. Both the Mayor of Wakkanai and Mr. Kobayashi, Wakkanai City Office of Sakhalin Project Promotion indicated that the city of Wakkanai hopes to be Japan’s northern gateway, and even the center of a dynamic new Northeast Asian trade circle at the confluence of Japanese, Russian, Chinese and Korean circles of influence. If pipelines are indeed constructed from Sakhalin to Tokyo and China’s industrial heartland of the northeast, this rosy picture of the future is not unrealistic. As a result, the Mayor and other Wakkanai City officials are exerting tremendous influence on policymaking to conclude the conflict. Some of this influence is direct, both officials indicated that trade agreements could be much easier to implement if the dispute were finally resolved. However, by actively pursuing significant investment already, the indirect pressure from business interests to compromise on the territorial issue in favor of joining the rapid investment in Russia is growing as well. Yet, even with a dramatic increase in business with Russia since the Cold War’s end, the Kurile Islands continue to divide Japan and Russia. Why, in regards to the Kurile conflict, are Japan and Russia still prisoners of the Cold War?