Russia investment decision on Kuril Islands angers Japan

By Elizabeth Shim  |  Aug. 24, 2017 at 3:55 PM
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Aug. 24 (UPI) -- A Russian decision to pursue unilateral economic development of the disputed Kuril Islands is creating a stir in Japan.

Russian Prime Minister Dmitry Medvedev signed an order on Wednesday that would create the Kurils advanced development territory on the island of Shikotan, according to Russian news agency Tass.

Shikotan is to be designated a special fish-processing zone and is to receive tax benefits to incentivize investment, multiple Japanese news services reported.

Russia's ownership and administration of Shikotan and surrounding islands is disputed by Japan.

The two sides called for a truce on the disputes in March with the announcement of joint economic projects that included plans for building seafood-processing and geothermal power plants.

The announcement came only a few months after Vladimir Putin and Japanese Prime Minister Shinzo Abe agreed to work more closely together in December.

But friction returned to the Kuril Islands after Putin said the return of the islands to Japan could increase U.S. military presence along Russia's eastern border.

Since then Russia reached a decision to invest about $125 million and employ at least 700 citizens in developing the islands without Japanese cooperation.

There is speculation Russia created the special economic zones in order to attract foreign investment.

The Yomiuri Shimbun reported Thursday that China and South Korea have signaled an interest in investing in the Russian-controlled Kuril Islands.

Japanese diplomatic sources voiced concern Russia is pursuing an inconsistent policy on the islands, and likened Russian actions to throwing out a base runner in baseball with a "pickoff" move, according to the Yomiuri.

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