by Nina Achmatova

The diplomatic tension over Medvedev's visit to disputed islands shakes Japanese business world, calls on the government for increased guarantees on the protection of good bilateral relations with the neighbouring power.

Moscow (AsiaNews) - The Kuril islands continue to fuel tension between Japan and Russia. After Russian President Dmitri Medvedev’s visit, November 1, to Kunashir, one of four disputed islands between Moscow and Tokyo, there are those who forecast a temporary stagnation of business between the two neighbouring powers.

Immediately after the official visit that angered the Japanese government, Japan’s Minister of Economy Banro Kaieda, expressed "concern about the economic consequences between the two countries, which" have deep ties in the development of natural and energy resources. It is still unclear if they are just words or if the threatened Japanese retaliation will be translated into action. Especially since the Kremlin has thrown oil on the fire by announcing that still has not ruled out another visit to the Kuril.

Analysts say an escalation of tension is not in either nation’s interest, which could make peace on the sidelines of the forthcoming G20 in Seoul. The interests at stake are indeed high. They were illustrated yesterday by the Japanese newspaper Yomiuri Shimbun, which gives voice to the concerns of Japanese businessmen. The chairman of the Japan Association of Corporate Executives, Masamitsu Sakurai, says the government lacks a diplomatic strategy and calls on Tokyo to ensure that trade relations are not damaged.

Many fear that the diplomatic crisis could slow down if not stop the large-scale projects already signed between Russia and Japan. Tokyo backed the Petroleum Exploration Co and Itochu Corp in proposing to Moscow to build a liquid natural gas plant in Vladivostok, while Toshiba Corp has entered into joint venture with a Russian state company for a store of enriched uranium. In October, the Oil, Gas and Metals National Corporation (Jogmec), an independent administrative agency, has discovered an oil field estimated at 100 million barrels of reserves in Siberia. Automakers such as Toyota Motor Corp., Nissan Motor Co. and Mitsubishi Motors Corp have started to produce cars in Russia, expecting a recovery in domestic demand.

Bilateral relations were strengthened in the economic field when Japan began to import crude oil from Siberia last year. Many Japanese businessmen are now considering whether to invest in Russia, in a context of intermittent diplomatic tensions, thinking it could still be a risk worth taking.

• Japan
• Russia
• kuril
• islands
• diplomatic
• tension
• business
• relations