By Uchihata Tsugumasa
There is no doubt that the biggest blow to Russia’s invasion of Ukraine will be sanctions on the energy sector, which supports the Russian economy. But Europe is heavily dependent on Russia for natural gas and oil supplies. Japan also relies on Russia’s energy to a certain extent and has a history of actively promoting economic cooperation, including in Russia’s energy sector, with a view to territorial negotiations. Japan, however, must thoroughly review its strategy toward Russia.
The economic cooperation with Russia promoted by the Abe Shinzo administration was met with skepticism, as no progress was made in territorial negotiations. Following the start of Russia’s invasion of Ukraine, the Sankei Shimbun called for an immediate halt to such cooperation (Feb. 26). The paper demanded that the “eight-point plan of economic cooperation between Japan and Russia” including cooperation in oil and gas development be frozen. The eight-point plan began as a proposal of Japan in 2016 after the annexation of Crimea. The daily also called for the removal of the title “Minister for Economic Cooperation with Russia” from the duties of Trade minister Hagiuda Koichi because the Sankei considers such a title unserviceable.
The Asahi Shimbun (Feb. 26 issue) reported, “When Crimea was occupied eight years ago, the Abe administration imposed sanctions, but they were limited compared with those in Europe and the United States.” The paper continued, “With a view to the Northern Territories negotiations, the Abe administration held a series of meetings with President Vladimir Putin and strongly promoted economic cooperation, but his feeble measures set a poor precedent for the Group of Seven (G7).” The paper expressed concern that Prime Minister Kishida Fumio is poised to follow Abe’s policy line, calling for the prime minister to change course.
Japan, the U.S., the European Union, and other countries have decided to exclude major Russian banks from the international payments network known as the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Both the U.S. and the U.K. have stepped in to embargo Russian oil. However, major newspapers generally share the view that to get Russian President Vladimir Putin to stop his aggression, further intensified pressure, mainly in the form of financial and economic sanctions, is necessary.
The target is Russia’s energy industry, and one of the focal points is the “Sakhalin 1” and “Sakhalin 2” resource development projects on the island, in which U.S., European, and Japanese companies are participating. The U.S. and European companies have decided to withdraw as part of the sanctions, and Japanese companies are being pressed to make a decision.
Sankei (March 3 issue) argued, “It is certain that (the withdrawal) will be a major blow to Japan’s energy procurement, but even so, if the Japanese companies continue their business in Russia on the grounds that to do otherwise would be disadvantageous in securing resources, it could undermine the unity of global sanctions on Russia.” Then the paper harshly pointed out, “Because the matter involves Japan’s determination to keep in step with the West, it would be unacceptable for Japanese companies to continue self-servingly to procure resources from Russia behind the scenes while the Japanese government in no uncertain terms has condemned Russia.”
The Nikkei, on the other hand, stated: “It is not a matter of just withdrawing” (March 2 issue), and urged a cautious stance toward strengthening sanctions on Russia’s energy sector, including an oil embargo. The paper argued, “The energy industry is a source of power for President Putin, and imposing sanctions on the energy industry is unavoidable to stop the ongoing atrocities in Ukraine.” “However,” the Nikkei continued: “Given the heavy dependence on Russia’s energy, many countries cannot simply keep in step with the sanctions, and Japan is one of them” (March 11 issue). As a prerequisite for strengthening sanctions against Russia, the daily stressed the necessity to take all possible measures to ensure energy stability, citing cooperation between Japan, the U.S., and Europe in securing alternative supplies and outreach to oil-producing countries in the Middle East.
The Sankei and the Yomiuri Shimbun argued that Japan, rather than the U.S. and Europe, should take the lead in strengthening sanctions against Russia, but that is because they bear in mind the presence of China, a powerful nation like Russia. The Sankei pointed out, “Japan should realize once again that it is an ally of the U.S. and a major player in the democratic camp and align itself with the G7 industrialized nations.” Then the daily argued, “Japan should recognize that opportunism leading to a failure to act adequately during a crisis in Europe and asking for support from European countries in the event of a crisis in the Indo-Pacific would not be acceptable in the international community” (Feb. 23 issue). The Yomiuri pointed that “whether the international community can make Russia cease its aggression against Ukraine will influence China’s future behavior” (March 7 issue).
Sanctions are a double-edged sword. The soaring energy prices associated with sanctions against Russia will have a ripple effect on utility and logistics costs, inevitably affecting the lives of the Japanese people. The government and businesses must do their utmost to protect people’s livelihoods while supporting the sanctions against Russia.