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Sanctions of Japan will remain "decorative"

Sanctions of Japan will remain "decorative"

Daria Senina

Research Fellow, Center for Japanese Studies, Far East Institute, FAO

Soviet-Japanese and Russian-Japanese relations have always been difficult. They were complicated by the problem of the Kuril Islands, the presence of Japan in the camp of the opponents of the USSR and other factors. Now Japan reluctantly introduced the second package of sanctions against Russia. Despite all the problems, trade and economic cooperation between the neighbors never fell below a certain level. The situation for EastRussia.ru was commented on by Daria Senina, a researcher at the Center for Japanese Studies at IFES FANO:

- As of December 2013, the balance of trade operations between Russia and Japan showed their relative bias in favor of imports from the Russian Federation (-12 thousand dollars). The volume of Japanese exports to Russia in value terms for the same period amounted to 710566 thousand dollars on an annualized basis, while imports from Russia - 11 thousand dollars. In May 067, almost the same trend continued. Exports from Russia exceeded Japanese exports by 039 thousand dollars on an annualized basis.

Japan exports mineral fuel, oil and products of its distillation from Russia, wood and wood products, charcoal, natural or cultured pearls, precious and semiprecious stones, precious metals, metals clad with precious metals and articles made from them, jewelry, coins, Aluminum and articles thereof. Japanese imports consist of nuclear reactors, boilers, equipment and mechanical devices, parts thereof, electric machines and equipment and parts thereof, sound recording and reproducing equipment, equipment for recording and reproducing television images and sound, land transport vehicles other than railway or tramway rolling stock , and their parts and accessories.

This confirms the fact that Russia remains for Japan a supplier of raw materials for industrial needs, and Japanese goods are not competitive in the Russian market because of their high cost. Affected by these data and internal economic problems of Japan itself.

Japan's economic sanctions against Russia are unlikely, despite official statements from Tokyo. Most likely, they will remain “decorative” in their essence, since Japan is interested in Russian gas supplies. Realizing this, the Japanese leadership seeks to play a "double game" and declares the sanctions with an eye to the United States.

As for direct investment, their inflow from Japan to Russia has significantly increased and reached in recent years a volume of 3 billion. Japanese businessmen themselves admit that the investment potential of Japanese companies conducting operations in Russia is much larger, but bureaucratic red tape and various interpretations of legislation depending on the performer still remain an obstacle.

A possible deterioration in the state of the Russian economy may also lead to a reduction in the volume of Japanese direct investments, since the construction of new enterprises in Russia is dictated to the Japanese by the desire to reduce transport and labor costs and to receive certain benefits. But the products of new Japanese enterprises in the territory of the Russian Federation are mainly intended for consumption in the domestic market. Under the conditions of a possible economic crisis, the demand for it inside Russia will be extremely low. Probably, the majority of Japanese corporations in such conditions would prefer to refrain from large investments in the Russian economy. 
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