The diplomatic crisis between Moscow and Tokyo over the Southern Kuril Islands confirms the old truth that Russian-Japanese political relations remain stuck at a dead end. But a new element has also emerged: while once only Japanese politicians used the island issue to pursue their domestic political objectives, now President Dmitry Medvedev is doing the same as he eyes the 2012 election.

The current crisis is unlikely to have any serious economic consequences. Of course, Japan could decide to stop importing energy resources from Russia, but this would go against Tokyo’s general line of diversifying its energy sources. Theoretically, the Japanese government could also advise Japanese companies to end their business in Russia, but this would do little to help pull Japanese business out of the recession. Japan isn’t providing Russia with state development aid and, as for Japanese humanitarian aid for the Kuril Islands’ residents, Moscow politely turned down the offer last year.

If Japanese companies pulled out of the projects underway to prepare for the Asia-Pacific Economic Cooperation (APEC) summit in Vladivostok in 2012, the contracts would simply go to other countries’ companies instead.  

Both capitals were quick to declare that the latest crisis would not affect Medvedev’s participation in the November APEC summit in Yokohama, where he may even meet with Japanese Prime Minister Naoto Kan. The only “victims” of the crisis so far have been Japanese Ambassador to Moscow Masaharu Kono, who was recalled “for consultations,” and Russian First Deputy Prime Minister Igor Shuvalov, whose visit to Japan was called off.  

Relations will probably return to their previous state soon, at least until Medvedev’s next visit to the Kurils or until the next sharply worded declaration or abrupt movement on the Japanese side. The only conclusion now is that the “islands of contention” have become a political card actively played by both sides in their efforts to win over domestic voters.

But what looks like “good politics” is not necessarily good strategy. Russia’s main strategic goal is economic modernization, and its main geopolitical task is to develop Siberia and the Russian Far East and integrate them more closely into the country as a whole. Japan could play a key part in these objectives. The best course in terms of Russian interests would be to turn Japan into a sort of “Germany in the East”—a stable economic, technological, and political partner.

Japan’s main geopolitical objective seems to be attaining a new strategic balance in a situation where China is a rapidly rising power, and it is not entirely clear what role the United States will be ready to play in Asia and the Pacific in the future. Russia’s position in this respect has considerable importance. Japanese observers were hasty to call Medvedev’s visit to the islands the first step in implementing a joint Russian-Chinese strategy against Japan. But if such a strategy were real it would indeed put Japan in a worse position. Responsible politicians in Tokyo should seek to prevent such an alliance.

Now that Russia has resolved its territorial disputes with China, and recently with Norway, the Kurils remain the only unresolved question. Even during the current crisis, the Kremlin confirmed that the position formulated by Putin back in 2000—to hand over Khabomai and Shikotan after signing a peace treaty—remains in force. 

Japan is in the opposite situation. It has a harder time taking what Russia is ready to give. Tokyo has territorial disputes with Seoul and Beijing. The prospect of a unified Korea with greater geopolitical clout still looks distant, but the dispute with Beijing over the Senkaku Islands could be the cause of an armed conflict as soon as tomorrow. The issue is not only the islands, which are currently under Japanese control, but also the borders of the oil-rich exclusive economic zones in the East China Sea. Beijing, incidentally, is ready to recognize the Southern Kurils as Russian territory in exchange for Moscow’s recognition of China’s claims to the Senkaku Islands. There is a clear strategy visible behind this idea.

Tokyo and Moscow, as well, both need a strategy to guide their relations with one another. Without such a strategy, foreign policy will remain hostage to their domestic situations. As academic Georgy Arbatov said, elections are a bad time for good policy and a good time for bad policy.