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Japanese Business, Soviet Development, and Territorial Conflict, 1975-1985

Published online by Cambridge University Press:  07 May 2025

Sergey Radchenko
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Abstract

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The article takes a close look at the claim that the Japanese Foreign Ministry's policy of “inseparability of politics and economics” (seikei fukabun) hampered Soviet-Japanese economic relations in the 1980s. Taking three case-studies (South Yakut coal, Sakhalin oil and gas, and the Siberian pipeline), the author shows that the loss of interest on the part of Japanese business circles in investing in the Soviet economy had little to do with the political priorities of the Japanese Foreign Ministry, and much to do with the changing energy needs and structure of the Japanese economy and its shift towards greater resource-efficiency. The article concludes, therefore, that the solution of the “territorial problem” would have hardly contributed to increasing Japanese investment in the Soviet Union; hence seikei fukabun was based on a false premise. The findings may be relevant to the ongoing territorial dispute between Japan and Russia and, in a broader sense, between Japan and its other neighbors, notably China.

Type
Research Article
Information
Asia-Pacific Journal , Volume 9 , Issue 35 , August 2011 , e1
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Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
Copyright © The Authors 2011

References

Notes

1 For an overview of the 1973 Brezhnev-Tanaka summit see Tsuyoshi Hasegawa, Northern Territories Dispute and Russo-Japanese Relations, Vol. 1 (Berkeley, CA : University of California, International and Area Studies, 1998), pp. 151-157.

2 See, for example, “Ob uskorennom razvitii proizvodstvennykh sil i zaselenii Dal'nego Vostoka” (letter by Party secretaries of certain regions of Siberia and the Far East to the Council of Ministers, no earlier than 1965), Sakhalin Center for Documentation on Current History, Yuzhno-Sakhalinsk, Russia (STsDNI): fond 4, opis' 83, delo 30, listy 148-155. The letter contains important statistics about chronic under-development of the Far North and the Far East.

3 Cited in Paul R. Josephson, “‘Projects of the Century’ in Soviet history: Large-Scale Technologies from Lenin to Gorbachev,” Technology and Culture, Vol. 36, No. 3 (July 1995), p. 555.

4 Record of the Politburo meeting, January 10, 1974. The Library of Congress. Volkogonov collection. Reel 16, containers 23-24. See also CIA, “Intelligence Report: Prospects for Continued Soviet Exports of Petroleum,” September 1970. Declassified in accordance with the Freedom of Information Act and available through the CIA FOIA online documents archive.

5 For a very useful overview of Soviet-Japanese economic ties, see David I. Hitchcock Jr., “Joint development of Siberia: decision-making in Japanese-Soviet relations,” Asian Survey, Vol. 11, No. 3 (March 1971), pp. 279-300.

6 CIA, “Soviet foreign trade: policy, performance, and prospects,” May 1969. Declassified in accordance with the Freedom of Information Act and available through the CIA FOIA online documents archive.

7 CIA, “Japanese-Soviet negotiation on Siberian economic development,” March 27, 1975. Declassified in accordance with the Freedom of Information Act and available through the CIA FOIA online documents archive.

8 Serge Schmemann, “Challenge of Siberia: conquering riches and cold,” The New York Times, January 26, 1982, p. A2; Kevin Close, “Battling permafrost for Siberian coal,” The Washington Post, April 9, 1979, p. A21; “Siberian project delayed again,” Coal Week International, Vol. 4, No. 9 (March 2, 1983), p. 2; also, Telegram from the US Embassy in Moscow to the Secretary of State, November 25, 1981, Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 00923. Here, and elsewhere, I relied on the LexisNexis database for all cited newspaper sources.

9 Kevin Klose, “Battling permafrost for Siberian coal,” The Washington Post, April 9, 1979, p. A21.

10 CIA, “Japan's changing relations with China and the USSR,” February 1, 1981. Declassified in accordance with the Freedom of Information Act and available through the CIA FOIA online documents archive.

11 William Chapman, “Japanese stop Soviet credits; joint development projects affected,” The Washington Post, February 8, 1980, p. A1; William Chapman, “Japanese relaxing economic sanctions against Soviet Union,” The Washington Post, September 10, 1980, p. A26. “After four years of talks…,” Coal Week International, Vol. 2, No. 3 (January 21, 1981), p. 3.

12 Victor L. Mote, “The South Yakutian territorial production complex” in Allan Rodgers (ed.), The Soviet Far East: geographical perspective on development (London: Routledge, 1990), p. 174.

13 “USSR notifies Japan of inability to supply Siberian coal,” BBC Summary of World Broadcasts, February 19, 1981.

14 “The Japanese steel industry has made representations…,” Japanese Economic Newswire, June 1, 1981.

15 “Soviet port project faulted,” Engineering News-record, January 21, 1982, p. 61.

16 “The Japanese steel industry has made representations…,” Japanese Economic Newswire, June 1, 1981.

17 Hui-Shung Chang, “Coking coal procurement policies of the Japanese steel mills: changes and implications,” Resources Policy, Vol. 23, Issue 3 (September 1997), pp. 125-135.

18 For more on Sino-Japanese cooperation in coal see Elspeth Thomson, The Chinese coal industry: an economic history (London: Routledge Curzon, 2003), pp. 128-129.

19 “Japan and USSR sign $100-million credit agreement…,” The New York Times, January 30, 1975, p. 55. For a concise review of Sodeco's activities in the 1970s and the 1980s see Michael J. Bradshaw, “Going global: The political economy of oil and gas development offshore of Sakhalin,” Cambridge Review of International Affairs, Vol. 12, No. 1 (1998), pp. 151-153.

20 “Sakhalin oil project: present status,” (undated, spring of 1982). Ronald Reagan Presidential Library, Simi Valley, CA (RRPL): NSC Executive Secretariat, Japan 4/10/82-4/27/82.

21 “A Japanese-Soviet joint oil company…,” The Associated Press, October 12, 1977.

22 “Japan's Sakhalin Oil Development Co. Ltd. signed an agreement…,” The Associated Press, June 6, 1979.

23 Three US firms were involved. “Japan renewing Siberian project,” The Washington Post, May 15, 1980, p. A27.

24 Meeting between Secretary Vance and Foreign Minister Okita, March 20, 1980. Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 00655.

25 “Okita, Vance differ over Moscow Olympics,” Jiji Press Ticker Service, March 21, 1980.

26 Meeting between Secretary Vance and Foreign Minister Okita, March 20, 1980. Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 00655.

27 Naoaki Usui, “USSR, Japan reach accord on Sakhalin LNG master plan,” Platt's Oilgram News, Vol. 59, No. 125, p. 1.

28 “US bars exports for Sakhalin project,” Platt's Oilgram News, Vol. 60, No. 32, p. 2; “USSR, Japan slate further drilling off Sakhalin,” Platt's Oilgram News, Vol. 59, No. 244, p. 3.

29 Letter from Kobayashi Sadao to Donald Gregg, March 30, 1982. Ronald Reagan Presidential Library, Simi Valley, CA (RRPL): NSC Executive Secretariat, Japan 4/10/82-4/27/82.

30 Richard Childress was perhaps the only advocate of giving a positive reply.

31 Memorandum from Norman A. Bailey to William P. Clark, April 28, 1982. RRPL: NSC Executive Secretariat, Japan 4/10/82-4/27/82.

32 Memorandum from Roger W. Robinson to Norman A. Bailey, May 5, 1982. RRPL: NSC Executive Secretariat, Japan 5/5/82-5/19/82.

33 Memorandum for Paul Bremer III, May 19, 1982. RRPL: NSC Executive Secretariat, Japan 5/5/82-5/19/82.

34 On the misuse of Sodeco funds to purchase surveillance ships for the Soviets, see the following documents: “Intelligence Information Report,” March 31, 1982. RRPL: NSC Executive Secretariat, Japan 5/5/82-5/19/82; Memorandum from Roger W. Robinson to William P. Clark, July 1, 1982. RRPL: NSC Executive Secretariat, Japan 6/11/82-9/3/82

35 Memorandum from Norman A. Bailey to William P. Clark, May 20, 1982. RRPL: NSC Executive Secretariat, Japan 5/20/82-6/5/82.

36 Cable from Mike Mansfield to the State Department, May 6, 1982. RRPL: NSC Executive Secretariat, Japan 5/5/82-5/19/82.

37 Cable from Mike Mansfield to the State Department, May 20, 1982. RRPL: NSC Executive Secretariat, Japan 5/20/82-6/5/82.

38 Cable from the US Embassy in Tokyo to the State Department, June 4, 1982. Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 00994.

39 Ibid.

40 Japan: Continuing Sakhalin Project, Internal Paper, July 28, 1982. Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 01005.

41 Memorandum from Roger W. Robinson to Robert C. McFarlane, June 11, 1982. RRPL: NSC Executive Secretariat, Japan 6/11/82-9/3/82.

42 Cable from Mike Mansfield to the State Department, June 18, 1982. RRPL: NSC Executive Secretariat, Japan 6/11/82-9/3/82.

43 Douglas Brinkley (ed.), The Reagan Diaries (New York: HarperCollins, 2007), p. 89.

44 Cable from the State Department to the US Embassy in Tokyo, June 19, 1982. RRPL: NSC Executive Secretariat, Japan 6/11/82-9/3/82.

45 “Sakhalin project; Japan protests against US over Soviet sanctions,” The Japan Economic Journal, June 29, 1982.

46 Memorandum from Roger W. Robinson to William P. Clark, July 1, 1982. RRPL: NSC Executive Secretariat, Japan 6/11/82-9/3/82.

47 Yukiko Fukasaku, “Energy and environment policy integration: the case of energy conservation policies and technologies in Japan,” Energy Policy, Vol. 23, No. 12 (1995), pp. 1063-76. “Japanese energy; Never a guzzler be,” The Economist, February 7, 1987.

48 These numbers are based on: “Japan to develop atomic energy,” Xinhua General News Service, December 27, 1979 and “Japan's nuclear policies to be reviewed,” The Japan Economic Journal, November 11, 1989.

49 Yukiko Fukasaku, “Energy and environment policy integration: the case of energy conservation policies and technologies in Japan,” Energy Policy, Vol. 23, No. 12 (1995), p. 1067.

50 “For structural improvement of depressed industries; 14-38% capacity cut eyed for nine chemical products,” The Japan Economic Journal, June 7, 1983; “Keidanren favors restructuring of ailing industries,” Jiji Press Ticker Service, June 4, 1982. John Wall, “Aluminum,” Mining Annual Review, June 1984, p. 47.

51 Yukiko Fukasaku, “Energy and environment policy integration: the case of energy conservation policies and technologies in Japan,” Energy Policy, Vol. 23, No. 12 (1995), p. 1064.

52 Todd R. Eastham, “Tokyo and Moscow teaming up on huge oil and gas project,” United Press International, February 3, 1985.

53 Vladimir Sushkov, Zakliuchennyi po klichke ‘ministr' (Moscow: Sovershenno Sekretno, 1995), p. 186. The actual list of bribes for which Sushkov was indicted, remains secret, and there is some uncertainty as to which Japanese companies were involved. However, Anatolii Pristavkin, who had access to this list, clearly points to Sodeco (Anatolii Pristavkin, Dolina Smertnoi Teni: roman-issledovanie (Moscow: Tekst, 2002), p. 110) while Sushkov acknowledges Mitsubishi and Keidanren itself (Vladimir Sushkov, Zakliuchennyi po klichke ‘ministr,' pp. 184-188). See also Andrei Baranovsky, “Sakhalin: gas production to begin in 1994,” Moscow News, September 24, 1993. The balance of evidence suggests Sodeco's involvement.

54 Report on a meeting with Mikhail Kapitsa, September 14, 1985. Hungarian National Archive, Budapest, Hungary (MOL): XIX-J-1-j-Japan-004420/1-1985.

55 For a good review of the crisis in West-West relations see Richard C. Thornton, The Reagan Revolution, Vol. 2: Rebuilding the Western Alliance (Victoria, BC: Trafford Publishing, 2005), pp. 160-215; a useful introduction from a European perspective is Julie E. Katzman, “The Euro-Siberian Gas Pipeline Row: A Study in Community Development,” Millennium: Journal of International Studies, Vol. 17, NO. 1 (1988), pp. 25-41.

56 The original conception was to export 40 BCM annually, but these plans were scaled down.

57 On the last point Reagan was quite right, although it was not until 20 years later that the Russians succeeded in terrorizing the Europeans by switching off the gas tab. Earnings estimates were, however, soon lowered. See Jonathan P. Stern, “Specters and pipe dreams,” Foreign Policy, No. 48 (Autumn 1982), p. 23.

58 Edward Cowan, “US to let Soviet buy ‘pipelayers’,” The New York Times, November 19, 1980, p. D3.

59 Telegram from US Embassy in Moscow to the State Department. November 25, 1981. Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 00923.

60 Shiro Yoneyama, “Increased country risk…,” Japan Economic Newswire, June 4, 1982.

61 “Soviets want to buy gas boosters,” The Japan Economic Journal, April 21, 1981, p. 1.

62 “GE's tech. will be used for USSR gas pipeline,” The Japan Economic Journal, September 22, 1981, p. 1.

63 “Japanese may lose in selling gas boosters to the Soviet Union,” The Japan Economic Journal, October 27, 1981.

64 Hiroaki Kakizawa, “Market potential for Russian forest products in Japan,” Working paper (Laxenburg, Austria: International Institute for Applied Systems Analysis, December 1994), p. 4.

65 Stephen Webbe, “Reagan may block US firms from aiding on key Soviet pipeline project,” Christian Science Monitor, January 15, 1981, p. 11.

66 National Security Council meeting, July 6, 1981: 11:09am-12:22pm. Source: Margaret Thatcher Foundation website.

67 Memorandum from the Secretary of Defense for the assistant to the President for national security affairs. July 8, 1981. Source: Margaret Thatcher Foundation website:

68 National Security Council meeting, October 16, 1981: 2:00-3:00pm. Source: Margaret Thatcher Foundation website.

69 Christopher Madison, “Trading credibility,” The National Journal, Vol. 13, No. 39 (September 26, 1981), p. 1736.

70 National Security Council meeting, October 16, 1981: 2:00-3:00pm. Source: Margaret Thatcher Foundation website.

71 “Komatsu gets $160 million pipelayer order from USSR,” The Japan Economic Journal, July 14, 1981, p. 3.

72 Clyde H. Farnsworth, “Washington Watch; Antitrust Sign is Glimpsed,” The New York Times, August 3, 1981, p. D2.

73 “Caterpillar gets export license,” The New York Times, December 10, 1981, p. D4.

74 National Security Council meeting, October 16, 1981: 2:00-3:00pm. Source: Margaret Thatcher Foundation website.

75 Tracy Dahlby, “Japan imposes sanctions on Soviets, Poles; Officials also confirm large sale of pipeline equipment to Moscow,” The Washington Post, February 23, 1982, p. A13.

76 Conversation between Alexander Haig and Abe Shintaro. January 18, 1982 (Document date: January 21, 1982). Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 00947.

77 Japan-US relations: frameworks for the future. June 17, 1982. Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 00997.

78 Conversation between Francis Pym and Sakurauchi Yoshio. September 3, 1982. Obtained by the author from the UK Foreign and Commonwealth Office in accordance with the Freedom of Information Act (request ref. 0001-10).

79 As the CIA perceptively observed at the time, the Soviets had long “dangled the lure of trade before Japanese businessmen in order to weaken US-Japanese ties, sidetrack Japanese demands for the return of the disputed Northern Territories, and undercut strategic cooperation between Tokyo and Washington.” See CIA, “Soviet use of economic relations for political purposes,” May 9, 1983. Declassified in accordance with the Freedom of Information Act and available through the CIA FOIA online documents archive.

80 Politburo meeting. September 9, 1982. The Library of Congress. Volkogonov collection.

81 Soviet strategy toward Japan: the economic-political connection. Secret. Intelligence appraisal. c. March 1983. Digital National Security Archive, US-Japan relations, 1977-1992. Document No. 01138.

82 Ibid.

83 Fumitsune Nagaoka, “How Komatsu made it,” The Japan Economic Journal, March 15, 1983, p. 6.

84 Ibid., p. 5.

85 See, for example, Togo Kazuhiko, “Medvedev signals intention to increase Russian presence,” Asahi Shimbun, December 14, 2010.